| Tue 2 Mar 2010, 15:59 | | SPO - Proposed delisting of Set Point amendment to the articles of |
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SPO
SPO
SPO - Proposed delisting of Set Point, amendment to the articles of
association, provision of financial assistance, specific repurchase of
shares and withdrawal of cautionary
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")
Proposed delisting of Set Point from the JSE Limited, amendment to the
articles of association of the company, provision of financial assistance to
the company and/or its subsidiaries, specific repurchase of shares and
withdrawal of cautionary
1. Introduction
Set Point shareholders are referred to the detailed cautionary announcement
published on the Securities Exchange News Service ("SENS") of the JSE Limited
("JSE") on Tuesday, 19 January 2010 and the renewal thereof dated Friday, 12
February 2010, in which it was indicated that the board of directors of the
company ("the board"), on the recommendation of a committee of independent
directors constituted for this purpose, was considering the delisting of the
company ("the delisting") from the JSE together with a specific offer by the
company and/or its subsidiaries in terms of sections 85 and/or 89 of the
Companies Act, 1973, as amended, superseded or replaced ("Companies Act"), to
all the shareholders of the company to specifically repurchase all or some of
their shares at a price of 90 cents per Set Point share ("the specific
offer").
Shareholders are also specifically referred to the rationale for the delisting
contained in the announcement dated Tuesday, 19 January 2010.
Subsequent to the aforementioned announcements, the following changes, inter
alia, have occurred:
- The board will propose that the articles of association of the company be
amended to the effect that those shareholders who do not make a valid
election to either accept or decline the specific offer in respect of all
or some of their shares in the company, details of which are set out in
paragraph 2 below, will be deemed to have accepted the specific offer
("the amendment to the articles of association");
- Brubin Pumps (Proprietary) Limited, a wholly owned subsidiary of Set
Point ("Brubin Pumps"), will specifically offer to repurchase up to a
maximum of 10% of the total number of Set Point shares that will be in
issue following the specific offer;
- Shareholders will be asked to approve a special resolution in terms of
which Set Point and Set Point Industrial Technology (Proprietary)
Limited, a wholly owned subsidiary of Set Point, will be authorised
generally and to the extent necessary in terms of section 38(2A) of the
Companies Act, to repay inter-company loan accounts and/or to provide
financial assistance to the company and/or Brubin Pumps to facilitate the
specific offer up to a maximum of 126.4 million shares at a price of 90
cents per Set Point share ("provision of financial assistance");
- The delisting, specific offer, amendment to the articles of association
and the provision of financial assistance are collectively referred to as
the "proposals"; and
- Set Point shareholders holding 217 million shares, including those held
by Sabvest Investments (Proprietary) Limited ("Sabvest"), the initiator
of the proposals, and each of Mineworkers Investment Company
(Proprietary) Limited ("MIC") and The Haroon Habib Family Trust ("HHFT"),
Set Point`s current black economic empowerment shareholders, have
irrevocably undertaken that they will not be accepting the specific offer
in relation to the shares held by them.
Sabvest, as the initiator of the proposals, will not vote its 108.4 million
shares at the general meeting of shareholders of the company to approve the
implementation of the proposals (the "general meeting").
2. The specific offer
In order to facilitate the exit of those shareholders that do not wish to
remain invested in the company following it`s delisting, Set Point and/or
Brubin Pumps have resolved to specifically offer to repurchase from Set Point
shareholders all or some 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"). The specific offer will provide shareholders with the
opportunity to exit the company at a price that is a premium of 7.1 % to the
volume weighted average price ("VWAP") of 84 cents over the 30 traded days
preceding the date of the publication of the cautionary announcement on
Monday, 9 November 2009 and a premium of 8.4% to the closing price of 83 cents
on Monday, 18 January 2010, being the last trading day prior to the
publication of the detailed cautionary announcement on Tuesday, 19 January
2010.
The specific offer will be open for acceptances from 09h00 on Monday, 29 March
2010 and will close at 12h00 on Friday, 21 May 2010. The date used to
determine which shareholders are entitled to participate in the specific offer
("record date") is the close of business on Friday, 21 May 2010. Accordingly,
the last business day to trade in Set Point securities in order to settle the
trade by the record date and qualify to participate in the specific offer
("last date to trade") will be Friday, 14 May 2010. Any acceptances of the
specific offer received prior to the fulfilment of the conditions precedent
set out in paragraph 4 below, shall be subject to such conditions precedent
being timeously fulfilled.
In terms of the specific offer shareholders may, up to 12h00 on Friday, 21 May
2010, elect either to:
- sell all or some of their shares to Set Point and/or Brubin Pumps for the
specific offer consideration ("cash alternative"); or
- retain all or some of their shares in the unlisted Set Point ("retention
alternative").
Those shareholders who do not validly elect either the cash alternative or the
retention alternative, will be deemed to have elected the cash alternative and
to have agreed to sell their shares to Set Point and/or Brubin Pumps in terms
of the amendment to the articles of association. Valid elections must be
received by the transfer secretaries before 12h00 on Friday, 21 May 2010.
The documents of title of Set Point shareholders` who have elected or have
been deemed to have elected the cash alternative and whose shares are
evidenced by share certificates, ("certificated shareholders") will have no
value and no rights after Friday, 21 May 2010 other than to receive the
proceeds of the sale of such shares for the specific offer consideration and
other than as set out below. The issue of cheques or electronic transfers to
certificated shareholders who have elected or have been deemed to have elected
the cash alternative will take place on or about Monday, 24 May 2010. Set
Point shareholders whose shares have been incorporated into the system
operated by Strate Limited and which are no longer evidenced by share
certificates and who have elected or are deemed to have elected to sell their
shareholdings in terms of the specific offer, will have their accounts with
their Central Securities Depository Participants or brokers automatically
updated with the specific offer consideration on or about Monday, 24 May 2010.
Set Point shareholders are not obliged to accept the specific offer. Set Point
shareholders that wish to remain invested in the company following the
delisting, in respect of all or some of their shares, are entitled to do so
provided the appropriate election is made and received by the transfer
secretaries by not later than 12h00 on Friday, 21 May 2010. In this regard,
shareholders` attention is drawn to the pro forma financial effects set out in
paragraph 5 below and 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. Dematerialised shareholders who elect the retention
alternative will be issued a share certificate in due course.
For a period of ninety (90) days from Friday, 21 May 2010, any Set Point
shareholder who has failed to make a valid election to remain invested in the
company and who has, as a result, been deemed in terms of the amendment to the
articles of association to have elected to sell his/her entire shareholding to
Set Point and/or Brubin Pumps in terms of the specific offer, and who can
reasonably satisfy the board that he/she did not in good faith receive the
circular (which incorporates the notice of general meeting), will be entitled
to subscribe for and will be issued such number of shares as were repurchased
from him/her by default at the specific offer consideration. Such shares will
be issued in terms of a general authority to issue shares for cash which was
obtained at the annual general meeting of Set Point held on 2 February 2010.
In this regard, although the Listings Requirements of the JSE require the
circular to be posted to shareholders by ordinary mail, the company will
dispatch this circular by prepaid registered mail to all beneficial
shareholders. For clarity, this provision does not apply to shareholders who
received the circular and/or notice of general meeting but failed to make a
valid election to remain invested in Set Point.
In the event that the proposals are approved by shareholders at the general
meeting, the trustees of the Set Point Group Limited Share Trust have agreed
to immediately authorise the acceleration of the vesting periods of the 15.4
million share options granted to certain executive directors, management and
staff of Set Point ("share options"), 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 exercised prior to the record date of the
specific offer. The board anticipates that all of the share options will be
exercised and will participate in the specific offer. In terms of a Securities
Regulation Panel ("SRP") requirement, any option holder that chooses not to
exercise his/her/its share options will not be allowed to vote in respect of
such share options at the general meeting. Holders of share options who choose
not to accept the offer of accelerated vesting and early exercise will
continue to hold their share options in terms of the trust deed.
3. Cash confirmation
Agreements have been entered into between Standard Bank of South Africa
Limited ("Standard Bank") and Set Point and/or its subsidiaries in terms of
which Standard Bank has provided the SRP cash confirmation for Set Point
and/or Brubin Pumps to be able to satisfy full acceptance of the specific
offer, which is supported in part by guarantees from Sabvest and a pledge of
cash by Set Point.
4. Conditions precedent
The proposals are subject to, inter alia, 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 and where appropriate registration of such
resolutions by the Companies and Intellectual Property Registration
Office; and
- the unconditional approval by the JSE and the SRP of the documentation
relating to the proposals or, if conditions are stipulated, then on such
conditions as are acceptable to the parties affected thereby.
Any acceptances of the specific offer received prior to the fulfilment of the
conditions precedent set out above, shall be subject to such conditions
precedent being timeously fulfilled.
5. Pro forma financial effects
Set out below are the pro forma financial effects of the specific offer, based
on the published, audited financial information of Set Point for the year
ended 31 August 2009. The directors are responsible for the information
provided in respect of the unaudited pro forma financial effects.
The pro forma financial effects have been prepared for illustrative purposes
only to provide information about how the specific offer would have impacted
on the basic earnings, diluted earnings, headline earnings, diluted headline
earnings, net asset value, net tangible asset value and market value per share
of a Set Point shareholder had the specific offer been concluded for income
statement purposes on 1 September 2008 and for balance sheet purposes on 31
August 2009. Due to their nature the pro forma financial effects may not give
a fair reflection of a Set Point shareholder`s financial position or cash
flows after the specific offer.
The "Acceptance of the specific offer" column illustrates the pro forma
financial effects of the specific offer on a Set Point shareholder had such
Set Point shareholder accepted the offer on 1 September 2008.
The "Remaining as a holder of one (1) share in the unlisted Set Point" column
illustrates the pro forma financial effects of the specific offer on a Set
Point shareholder had such Set Point shareholder retained his shares in the
unlisted Set Point for the period 1 September 2008 to 31 August 2009.
The pro forma financial effects have been prepared on the following
assumptions:
- the vesting periods of the share options will be accelerated, resulting
in all of the share options being early vested and exercised, enabling
them to participate in the specific offer;
- Sabvest, as the initiator of the proposals, will not vote its 108.4
million shares at the general meeting and will not accept the specific
offer;
- In addition, Set Point shareholders holding 108.6 million shares,
including those held by each of MIC and HHFT, Set Point`s current black
economic empowerment shareholders, have irrevocably undertaken that they
will not be accepting the specific offer in relation to the shares held
by them; and
- all other shareholders will accept the specific offer.
Shareholders attention is drawn to the fact that the pro forma financial
effects of remaining as a holder of one (1) share in the unlisted Set Point
will change to the extent that additional shareholders decline the specific
offer.
Per Set Point Before Acceptance % change Remaining % change
share the of the as a
specific specific holder of
offer (1) offer one (1)
share in
the
unlisted
Set Point
Earnings per share 8.9 5.8 (2) (35) 5.9 (4) (34)
(cents)
Diluted earnings 8.8 5.8 (2) (34) 5.9 (4) (33)
per share (cents)
Headline earnings 12.6 5.8 (2) (54) 11.5 (4) (8)
per share (cents)
Diluted headline
earnings per share 12.4 5.8 (2) (53) 11.5 (4) (7)
(cents)
Dividends per 5.0 5.8 (2) 16 5.0 -
share (cents)
Net asset value 47.8 90.0 (3) 88 21.7 (5) (55)
(cents)
Net tangible asset 39.4 90.0 (3) 129 8.9 (5) (77)
value (cents)
Market value on 83.0 (6) 90.0 (3) 8 83.0 (6) -
Friday, 6 November
2009
30 day VWAP to 84.0 (7) 90.0 (3) 7 84.0 (7) -
Friday, 6 November
2009
Market price on 83.0 (8) 90.0 (3) 8 83.0 (8) -
Monday, 18 January
2010
Weighted average 336 243 - - 217 002 (36)
number of shares (9)
in issue (`000)
Weighted average
diluted number of
shares in issue 339 868 - - 217 002 (36)
(`000) (9)
Number of shares 327 438 - - 217 002 (34)
in issue (`000)
Notes:
1. The "Before the specific offer" basic earnings, diluted earnings,
headline earnings, diluted headline earnings and dividends per share
have been extracted without adjustment from the audited, published
results of Set Point for the year ended 31 August 2009. The "Before
the specific offer" net asset value and net tangible asset value per
share have been calculated from the financial information presented
in the audited, published results of Set Point for the year ended 31
August 2009.
2. The basic earnings, diluted earnings, headline earnings, diluted
headline earnings and dividends per share, based on the assumption
that the Set Point shareholder accepted the specific offer on 1
September 2008 and invested the cash of 90 cents received in a
twelve-month fixed deposit at an average, after taxation rate of
6.23% (assuming a taxation rate of 40% for individuals).
3. The cash received of 90 cents per share by the Set Point shareholder
in terms of the specific offer.
4. The basic earnings, diluted earnings, headline earnings and diluted
headline earnings per share included in the "Remaining as a holder
of one (1) share in the unlisted Set Point" column have been
adjusted for the following:
- to include the additional charge in terms of IFRS 2: Share
based payments amounting to R1.0 million, incurred as a result
of the acceleration of the vesting periods and early exercise
of the 15.4 million share options issued to group management
and staff;
- to exclude the before taxation interest received amounting to
R1.9 million (calculated using an average interest rate of 9.4%
for the period) which is forfeited by Set Point due to the
specific offer consideration being partly funded out of cash on
hand;
- to include the before taxation interest paid by Set Point
Industrial Technology (Proprietary) Limited, amounting to R13.0
million (calculated using interest rates of 14.5% and 14.2%
(three-month JIBAR at 28 February 2009 plus 4.4%), due to
increased interest-bearing debt needed for operations pursuant
to the repayment of inter-company loan accounts to Set Point;
- to include secondary taxation on companies amounting to R0.4
million (calculated at 10%) in respect of that portion of the
total specific offer consideration that exceeds Set Point`s
available share premium; and
- to include the transaction costs amounting to R5.1 million.
5. The net asset and net tangible asset values per share included in
the "Remaining as a holder of one (1) share in the unlisted Set
Point" column have been adjusted for the following:
- the cash received as a result of the early vesting and exercise
of 15.4 million share options at their exercise prices;
- the reduction in equity as a result of the repurchase of 126.4
million shares (including the 15.4 million share options) at 90
cents per share which has been funded through cash on hand and
debt as detailed in note 4 above;
- to include the transaction costs amounting to R5.1 million;
and
- to include secondary taxation on companies at 10% in respect of
that portion of the total specific offer consideration that
exceeds Set Point`s available share premium.
6. Closing price of Set Point`s shares on the JSE on Friday, 6 November
2009, being the last trading day prior to the publication of the
first cautionary announcement in respect of the specific offer on
Monday, 9 November 2009.
7. VWAP at which Set Point`s shares traded on the JSE for the 30
trading days up to and including Friday, 6 November 2009, being the
last trading day prior to the publication of the first cautionary
announcement in respect of the specific offer on Monday, 9 November
2009.
8. Closing price of Set Point`s shares on the JSE on Monday, 18 January
2010, being the last trading day prior to the publication of the
detailed cautionary announcement in respect of the specific offer on
Tuesday, 19 January 2010.
9. The weighted average number of shares in issue during the year of
336 243 000, as reported in the annual financial statements for the
year ended 31 August 2009, was adjusted downwards by 8 805 000
shares to account for the elimination of the impact of the
acquisition of treasury shares during the year for the purposes of
satisfying the share options in issue. As the accelerated vesting of
the share options and early exercise is assumed, for the purposes of
the pro forma income statement, to have occurred on the first day of
the financial year, similarly the acquisition of shares to satisfy
these options must also be assumed to have occurred on the same
date. Consequently, after accounting for the impact of the specific
offer, the weighted average number of shares in issue for the year
has been calculated to be 217 002 000 shares.
6. Salient dates and times
2010
Circular posted by prepaid registered mail to
beneficial shareholders on Friday, 26 March
Specific offer opens at 09h00 on Monday, 29 March
Last day to lodge forms of proxy for the general
meeting by 11h00 on Thursday, 15 April
General meeting of shareholders to be held at
11h00 on Monday, 19 April
Results of general meeting published on SENS on Monday, 19 April
Results of general meeting published in the press
on Tuesday, 20 April
Finalisation announcement by no later than Friday, 7 May
Last day to trade in order to participate in the
specific offer Friday, 14 May
Suspension of listing from commencement of
business on Monday, 17 May
Election period for the specific offer closes at
12h00 on Friday, 21 May
Form headed "Form of election and surrender"
(blue) (to be completed by certificated
shareholders only) and share certificates (where
applicable) to be received by 12h00 on (See note
2 below) Friday, 21 May
Record date Friday, 21 May
Cheques posted or electronic transfers effected
to certificated shareholders who sell their
shareholdings in terms of the specific offer and
accounts of dematerialised shareholders who sell
their shareholdings in terms of the specific
offer credited on Monday, 24 May
Results of the specific offer published on SENS
on Monday, 24 May
Results of the specific offer published in the
press on Tuesday, 25 May
Delisting of Set Point with effect from the
commencement of business on Tuesday, 25 May
1. These dates and times are subject to amendment. Any such amendment
will be released on SENS and published in the press.
2. Those certificated shareholders who do not validly elect either the
cash alternative or the retention alternative before 12h00 on
Friday, 21 May 2010 will be deemed to have elected the cash
alternative and to have agreed to sell their entire shareholding to
Set Point and/or Brubin Pumps in terms of the specific offer. The
documents of title of certificated shareholders who have elected or
have been deemed to have elected the cash alternative will no longer
be valid after Friday, 21 May 2010 other than to receive the
proceeds of the sale of such shares for the specific offer
consideration on or about Monday, 24 May 2010.
3. Share certificates may not be dematerialised after Friday, 14 May
2010.
7. Documentation
A circular containing the information required in terms of the JSE Listing
Requirements and the Securities Regulation Code and Rules of the SRP and
incorporating a notice convening a Set Point general meeting to approve the
implementation of the proposals will be posted, by prepaid registered post, to
beneficial Set Point shareholders on or about Friday, 26 March 2010.
8. Withdrawal of cautionary
Shareholders are advised that caution is no longer required to be exercised
when dealing in their securities.
Isando
Tuesday, 2 March 2010
Lead joint sponsor Joint 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: 02/03/2010 15:59:44 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
