| Mon 1 Dec 2008, 14:50 | | ERM - Enterprise Risk Management - Proposed Offer To ERM Minorities Withdrawal |
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ERM
ERM
ERM - Enterprise Risk Management - Proposed Offer To ERM Minorities Withdrawal
Of Cautionary Announcement
Enterprise Risk Management Limited
Incorporated in the Republic of South Africa
(Registration number: 1995/001603/06)
Share code: ERM ISIN: ZAE000037701
("ERM" or "the company")
PROPOSED OFFER TO ERM MINORITIES WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Further to the cautionary announcement dated 12 September 2008 and the renewal
of that announcement dated 31 October 2008, shareholders are advised that
beneficial shareholders of approximately 63.93% of the issued share capital of
ERM (excluding shares held in treasury), represented by Mr Mark Stein ("the
proposer"), have delivered to the ERM board a letter confirming their intention
to make an offer to the minority shareholders of ERM ("the offer") to acquire
all of their ordinary shares in ERM (the "scheme shares") for a cash
consideration of 130 cents per scheme share. The cash consideration is equal to
the 30-day volume weighted average price ("VWAP") of ERM shares prior to the
date of the cautionary announcement.
The offer will be implemented, subject to the conditions set out in 2 below, by
way of a scheme of arrangement ("the scheme") in terms of section 311 of the
Companies Act, 61 of 1973, as amended ("the Act"), to be proposed by the
proposer between ERM and all of its shareholders.
2. TERMS AND CONDITIONS OF THE OFFER
The material terms and conditions of the offer will be as follows:
2.1 Scheme consideration
The consideration payable by the proposer to each scheme participant in terms of
the scheme will be 130 cents per share.
Following the implementation of the scheme, the listing of ERM on the JSE
Limited ("JSE") will be terminated.
2.2 Conditions precedent to the scheme
The scheme will be subject to the fulfillment of the following conditions
precedent:
2.2.1 all regulatory approvals and consents necessary to implement the
scheme being obtained;
2.2.2 approval of the scheme by a majority representing not less than three-
fourths of the votes exercisable by scheme members who are present and voting
(either in person or by proxy) at a general meeting of shareholders held for
such purpose;
2.2.3 the High Court of South Africa (Witwatersrand Local Division)
sanctioning the scheme; and
2.2.4 a notarially certified copy of the order of court sanctioning the
scheme being registered by the Registrar of Companies in terms of the Act.
3. FUNDING AND CASH CONFIRMATION
The proposer has provided the necessary cash confirmation letters to the
Securities Regulation Panel ("SRP") in terms of Rule 2.3.2(b) and Rule 21.7 of
the Securities Regulation Code on Takeovers and Mergers (the "Code").
4. IRREVOCABLE COMMITMENTS
Shareholders representing approximately 14.43% of the total issued shares in ERM
have provided irrevocable commitments to vote in favour of the proposed scheme,
alternatively to accept the mandatory offer described below.
5. MANDATORY OFFER
Mr Mark Stein, acting on behalf of various family interests, is deemed, in terms
of the Code to have acquired control of ERM by virtue of them having increased
their aggregate shareholding in ERM to approximately 36.2%.
Should the scheme fail for any reason, Mr Stein, is accordingly required to
extend an unconditional offer to other shareholders of ERM to acquire their
shares for the same consideration as applied in the transaction in which control
of ERM was deemed to have been acquired. The consideration in question is 126
cents per share.
Mr Stein has provided the necessary cash confirmation letters to the SRP in
terms of Rule 2.3.2(b) and Rule 21.7 of the Code.
Shareholders representing approximately 28% of the total issued shares in ERM
have provided irrevocable commitments not to accept the mandatory offer should
it be made.
6. APPOINTMENT OF INDEPENDENT ADVISOR
The Board has established an independent sub-committee consisting of the
following directors: Messrs J Kramer, E Gerber and B Gruzd, to manage and co-
ordinate the offer process on behalf of ERM and to formulate and make
recommendations to ERM minority shareholders as required in terms of the SRP
Code.
The abovementioned independent sub-committee has appointed Sasfin Capital, a
division of Sasfin Bank Limited ("Sasfin Capital") to advise the board on the
offer and its effect on all of ERM`s shareholders. The text of the letter from
Sasfin Capital will be included in the circular to be posted to ERM shareholders
with details of the terms of the scheme.
7. MARKET AND FINANCIAL INFORMATION
Information regarding the price at which ERM shares traded immediately prior to
the publication of its cautionary announcement and this announcement of the
proposed offer to minority shareholders, in relation to the offer consideration,
is set out in the table below:
Before the The offer Premium
scheme consideration (%)
(cents) (cents)
Market price on 11 September 2008 130 (1) 130 -
30-day VWAP to 11 September 2008 130 (2) 130 -
Market price on 28 November 2008 120 (3) 130 8%
30-day VWAP to 28 November 2008 129 (4) 130 1%
Notes:
(1) Closing price of ERM shares on the JSE on 11 September 2008, being the last
trading day prior to publication of the cautionary announcement.
(2) the VWAP at which ERM shares traded on the JSE for the 30 trading days up
to and including 11 September 2008, being the last trading day prior to
publication of the cautionary announcement.
(3) Closing price of ERM shares on the JSE on 28 November 2008, being the last
trading day before the detailed cautionary announcement relating to the offer.
(4) the VWAP at which ERM shares traded on the JSE for the 30 trading days up
to and including 28 November 2008.
8. FURTHER INFORMATION
ERM shareholders will be advised of important dates and times of the scheme in
due course. A circular containing the full terms and conditions of the offer is
being prepared and will be issued to shareholders in due course.
9. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
In the light of the above, shareholders are advised that the cautionary
announcement dated 31 October is withdrawn.
1 December 2008
Independent advisor and sponsor to ERM
Sasfin Capital
A division of Sasfin Bank Limited
Attorneys to ERM and attorneys to the scheme
Fluxmans Attorneys
Attorneys to the proposer
Smith Tabata Buchanan Boyes
Date: 01/12/2008 14:50:02 Produced by the JSE SENS Department.
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