| Tue 19 Jan 2010, 7:05 | | SPO - Set Point Group - Detailed cautionary announcement relating to the |
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SPO
SPO
SPO - Set Point Group - Detailed cautionary announcement relating to the
proposed delisting of Set Point from the JSE Limited, proposed specific
repurchase of shares and further cautionary announcement
Set Point Group Limited
(formerly Set Point Technology Holdings Limited)
Incorporated in the Republic of South Africa
Registration number: 1996/014334/06
Share code: SPO
ISIN code: ZAE000132601
("Set Point" or "the company" or "the group")
Detailed cautionary announcement relating to the proposed delisting of Set Point
from the JSE Limited, proposed specific repurchase of shares and further
cautionary announcement
1. Introduction
Further to the cautionary announcements published on SENS on 9 November
2009 and 14 December 2009, respectively, ("cautionary announcements"), the
board of directors of Set Point ("the board"), on the recommendation of a
committee of independent directors constituted for this purpose, has
resolved, subject to the conditions precedent detailed in paragraph 7
below, to propose that:
- the company be delisted ("the delisting") from the Main Board of the
JSE Limited ("JSE"); and
- the company and/or its subsidiaries make a specific offer to all the
shareholders of the company, excluding Sabvest Investments
(Proprietary) Limited ("Sabvest") which is the initiator of the
proposals, to specifically repurchase all or any of their shares at a
price of 90 cents per Set Point share ("the specific offer"). No
shareholder will be obliged to sell its shares provided that it
specifically elects to remain a shareholder in the company after its
listing is terminated.
The proposed delisting and specific offer are collectively referred to as
the proposals. A general meeting of shareholders will be convened ("general
meeting") to consider and, if deemed fit, approve the special and ordinary
resolutions necessary in order to implement the proposals. Sabvest, as the
initiator of the proposals, will not attend nor vote its 108 million shares
at the general meeting and will not accept the specific offer.
2. Rationale for the delisting
The rationale for the proposals are as, inter alia, follows:
- the market sentiment towards small capitalisation companies listed on
the JSE is unfavourable and is not expected to improve;
- the board has considered the rationale for the continued listing of
the company and believes that there are no material benefits for
retaining the listing;
- the costs associated with a continued listing will be saved;
- more than 85% of the shares are held by only ten shareholders and less
than 5% are held by institutional investors with the effect that trade
in the shares is very illiquid. Trade in the shares has been mainly
between the few larger shareholders and volumes have otherwise been
minimal;
- the specific offer represents a unique liquidity event for
shareholders to realise in cash their entire shareholding, with the
volume of shares under offer being materially higher than normal
trades in the past two financial years (other than between the larger
shareholders); and
- the specific offer will provide the minorities with the opportunity to
exit the company at a price that is a premium of 7.1 % to the volume
weighted average share price ("VWAP") of 84 cents over the 30 traded
days preceding the date of the publication of the cautionary
announcement on 9 November 2009 and a premium of 8.4% to the closing
price of 83 cents on 15 January 2010, being the last trading day prior
to the publication of this announcement.
3. The specific offer
In order to facilitate the exit of those shareholders that do not wish to
remain invested in the company following its delisting, Set Point and/or
its subsidiaries, if applicable, propose to specifically repurchase all or
any of their shares in the issued share capital of the company for a cash
amount of 90 cents per Set Point share ("the specific offer
consideration").
Sabvest, as the initiator of the proposals, will not attend nor vote its
shares at the general meeting and will not accept the specific offer.
Sabvest will, however, sell up to 5 million shares before the specific
offer closes if this becomes necessary to avoid acquiring control of the
company as contemplated in paragraph 12 of the Competition Act No. 89 of
1998 (as amended) ("the Competition Act").
In addition, each of Mineworkers Investment Company (Proprietary) Limited
and The Haroon Habib Family Trust, Set Point`s current black economic
empowerment shareholders, has provided irrevocable undertakings that it
will not accept the specific offer in relation to the shares held by it.
In terms of the specific offer, shareholders will be required to elect
either to:
- sell their shareholding to Set Point for the specific offer
consideration ("cash alternative"); or
- retain their shareholding in the unlisted Set Point ("retention
alternative").
Those shareholders who do not elect either the cash alternative or the
retention alternative will be deemed to have elected the cash alternative
and agreed to sell their shares to Set Point and/or its subsidiaries in
terms of the specific offer.
Set Point shareholders will not be obliged to accept the specific offer.
Set Point shareholders that wish to remain invested in the company
following the delisting will be entitled to do so. In this regard,
shareholders` attention is drawn to the fact that shareholders who elect to
remain invested after the delisting will no longer have a formal market on
which to trade their shares.
Any Set Point shareholder who has been deemed to have elected to sell his
shareholding to Set Point and/or its subsidiaries in terms of the specific
offer, and who can reasonably satisfy the board that he did not receive the
circular within 30 days of the record date, will be able to apply to the
company to have his shareholding reinstated at the specific offer
consideration.
Subject to the approval and restatement of The Amended and Restated Set
Point Group Limited Share Trust ("the Trust") by shareholders at the Annual
General Meeting to be held at 09h30 on Tuesday, 2 February 2010, it is
proposed that the trustees of the Trust authorise the acceleration of the
vesting periods of the 15.3 million share options granted to group
management and staff, in terms of the trust deed. The result of the
acceleration of the vesting periods of the share options is that the share
options will vest and can be taken up prior to the record date of the
specific offer.
4. Specific offer consideration
The specific offer consideration will be 90 cents per share which is a
premium of 7.1% to the VWAP over the 30 traded days preceding the date of
the publication of the cautionary announcement on 9 November 2009 of 84
cents and a premium of 8.4% to the closing price of 83 cents on
15 January 2010, being the last trading day prior to the publication of
this announcement.
5. Cash confirmation
Set Point`s bankers have conditionally agreed with Set Point that they will
provide the SRP cash confirmation for Set Point to be able to satisfy the
specific offer consideration, which will be supported in part by guarantees
from Sabvest and a pledge of cash by Set Point.
6. Source of funds to be utilised for the specific offer
The specific offer will be funded by Set Point withdrawing loan accounts
from its operating subsidiaries of up to R121 million, as required. In this
regard, Set Point`s bankers and Sabvest have conditionally agreed to
provide additional credit lines to the operating subsidiaries of the Set
Point Group. These arrangements are subject to the conclusion of written
funding agreements and securities which are currently being prepared.
7. Conditions precedent to the proposals
The proposals are subject, inter alia, to the fulfilment of the following
conditions precedent:
- the passing by the requisite majority of Set Point shareholders at the
general meeting of the ordinary and special resolutions required to
implement the proposals;
- the provision of a cash confirmation by Set Point`s bankers to the
satisfaction of the SRP; and
- the unconditional approval of the JSE and the SRP to the
implementation of the proposals, or if such approval is conditional,
then on such conditions as may be acceptable to the parties affected
thereby.
8. Fairness opinion
The board has appointed KPMG Services (Proprietary) Limited ("KPMG") as the
independent expert to consider whether the offer, if made, is fair to the
Set Point shareholders.
9. Further cautionary announcement
Nothing contained in this announcement constitutes an offer nor a firm
intention to make an offer by any party, as contemplated under the
Securities Regulation Code on takeovers and mergers, nor should it in any
circumstances be construed as such. A further announcement will be released
on SENS and in the press once the full terms and the salient dates of the
proposals have been finalised. Accordingly, shareholders are advised to
continue to exercise caution when dealing in the company`s securities until
such further announcement is published.
Isando
18 January 2010
Lead sponsor Company sponsor
BDO Corporate Finance Investec Bank Limited
Legal advisor Independent expert
Edward Nathan Sonnenbergs Inc. KPMG Services (Proprietary)
Limited
Reporting accountants and auditors
KPMG Inc.
Date: 19/01/2010 07:05:02 Produced by the JSE SENS Department.
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