| Mon 12 Mar 2012, 16:00 | | GEN - General - Mandatory offer extended by concert parties to the remaining |
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JSE
GEN
GEN - General - Mandatory offer extended by concert parties to the remaining
shareholders of ConvergeNet Holdings Limited: revised offer consideration
MANDATORY OFFER EXTENDED BY CONCERT PARTIES TO THE REMAINING SHAREHOLDERS OF
CONVERGENET HOLDINGS LIMITED, REGISTRATION NUMBER 1998/015580/06
("ConvergeNet" or the "Company"), IN ACCORDANCE WITH THE REQUIREMENTS OF
SECTION 123 OF THE COMPANIES ACT NO. 71 OF 2008 (the "Companies Act"):
REVISED OFFER CONSIDERATION
1. INTRODUCTION
Shareholders are referred to the announcement released on SENS and published
in the press on 22 February 2012 and 23 February 2012, respectively (the
"Announcement"), regarding the following:
1.1 Yellow Star Group (Proprietary) Limited, registration number
2005/004789/07 ("Yellow Star"), has a shareholding of 27.57% in the
ordinary issued share capital of the Company. On or about 16
February 2012, the following transactions were concluded:
1.1.1 Yellow Star entered into a subscription agreement with a
special purpose vehicle, namely Sheerprops 156 (Proprietary)
Limited (the "SPV") in terms of which the SPV subscribed for 97
ordinary shares in the issued share capital of Yellow Star,
representing 38.65% of the ordinary issued share capital of
Yellow Star, for a subscription price of R24 million (the
"Subscription"). The SPV is advised by AfrAsia Corporate
Finance (Proprietary) Limited ("ACF"). The proceeds from the
Subscription will be utilised to reduce the debts of Yellow
Star.
1.1.2 AfrAsia Special Opportunities Fund (Proprietary) Limited
("ASOF") entered into sale agreements with the following
parties:
1.1.2.1 the B. Kekana Family Trust (the "Kekana Trust"), in terms of
which the Kekana Trust disposed of 20 ordinary shares held by
it in the issued share capital of Yellow Star, together with
claims, being any amount owed on loan account to the Kekana
Trust, for a total consideration of R5 560 720; and
1.1.2.2 Mr TM Modise, in terms of which Mr Modise disposed of 11
ordinary shares held by him in the issued share capital of
Yellow Star for a total consideration of R3 058 396.
The share transactions detailed in paragraph 1.1.2.1 and
1.1.2.2 above are hereinafter collectively referred to as the
"Share Sale".
1.1.3 Titantrade 306 (Proprietary) Limited ("Titantrade") entered
into a sale agreement with Mr TM Modise in terms of which
Titantrade sold 11 ordinary shares held by it in the issued
share capital of Yellow Star to Mr Modise for a total
consideration of R3 058 396.
1.2 Trinity Asset Management (Proprietary) Limited and Titan Nominees
(Proprietary) Limited (collectively the "Controlling Parties")
currently collectively hold 14.89% in the ordinary issued share
capital of ConvergeNet. The Controlling Parties are seeking to make
this additional investment into Yellow Star in order to gain greater
exposure to ConvergeNet and to strengthen the financial profile of
Yellow Star.
1.3 The Subscription and the Share Sale are hereinafter collectively
referred to as "the Transactions".
1.4 The Transactions have resulted in an increase in the collective
shareholding controlled by the SPV, ASOF, Titantrade and the
Controlling Parties in ConvergeNet to approximately 42.71%, which
shareholding is held either beneficially or indirectly by virtue of
their respective shareholdings in Yellow Star. In terms of section
117(1)(b) of the Companies Act, the aforementioned parties are
deemed to be acting in concert, and are collectively hereinafter
referred to as the "Concert Parties" or the "Offeror".
1.5 It is recorded that, for purposes of voting on any resolutions to be
proposed in future at a general meeting of the Company, if one
combines the shares of M Cubed Holdings Limited and its subsidiaries
("M Cubed") to those held by the Concert Parties, they together
amount to approximately 53% of the ordinary shares in ConvergeNet.
Accordingly, M Cubed are deemed by the Takeover Regulation Panel
("TRP") to be a concert party based on their aforementioned voting
control only; however, M Cubed will not be taking up any shares in
terms of the offer as defined in paragraph 2.1 below, and do
therefore not form part of the Offeror. M Cubed have waived any
entitlement to the offer shares, as defined in paragraph 1.6 below,
to the Offeror,
1.6 In terms of section 123 of the Companies Act, read with the Takeover
Regulations promulgated in terms of sections 120 and 223 of the
Companies Act (the "Takeover Regulations"), the Transactions
represent a change in control of ConvergeNet and constitute an
affected transaction as defined in section 117(1)(c) of the
Companies Act. The Offeror is accordingly obligated to extend an
offer to the remaining ConvergeNet shareholders (excluding the
shareholders detailed in paragraph 4 below and shares held in
treasury) (the "Remaining Shareholders") to acquire all of the
ordinary shares held by them (the "Offer Shares") at the highest
price paid by the Offeror or any person acting in concert with the
Offeror within the six month period before the commencement of the
offer period (the "six month period") (the "highest price").
1.7 Shareholders are advised that the highest price paid in respect of
certain internal trades between the clients of one of the Concert
Parties during the six month period was 26 cents per share.
Accordingly, the offer consideration has been increased from 23
cents per share, as stated in the Announcement, to 26 cents per
share (the "Revised Offer Consideration"), payable in cash on the
terms and conditions of the offer detailed in paragraph 2 below.
1.8 The Offeror has notified the board of directors of ConvergeNet of
its obligation to proceed with the proposed acquisition of the Offer
Shares and of the Revised Offer Consideration.
2. THE OFFER
2.1 Terms of the Offer
2.1.1 The Offeror shall offer to acquire all of the Offer Shares in
exchange for the Revised Offer Consideration of 26 cents per
Offer Share (the "Offer"), to be settled in cash. The
Remaining Shareholders may elect to accept the Offer in whole
or in part.
2.1.2 The Remaining Shareholders include key employees to whom shares
were awarded in terms of a forfeiture share plan which had been
approved by shareholders in general meeting on 18 January 2008.
2.1.3 It is the intention of the Offeror to retain the listing of
ConvergeNet on the main board of the JSE Limited for the time
being. Remaining Shareholders who elect not to accept the
Offer, or elect to accept the Offer in part, will remain
shareholders in ConvergeNet.
2.2 Mechanism for implementing the Offer
The Offer will be implemented by way of a cash offer of 26 cents per
Offer Share by the Offeror to the Remaining Shareholders in terms of
section 123 of the Companies Act as a mandatory offer and will be
proceeded with in accordance with the prescribed requirements of the
Companies Act and the Takeover Regulations.
2.3 Cash Confirmation
In accordance with Takeover Regulations 111(4) and 111(5), Nedbank
Limited has provided the TRP with a revised irrevocable
unconditional bank guarantee that sufficient cash is held in escrow
in favour of the Remaining Shareholders for the sole purpose of
fully satisfying the cash commitment, amounting to R48 233 368, in
respect of the Offer.
2.4 No set-off of Revised Offer Consideration
Settlement of the Revised Offer Consideration pursuant to the Offer
will be implemented in accordance with the terms of the Offer
without regard to any lien, right of set-off, counterclaim or other
analogous right to which the Offeror may otherwise be, or claim to
be, entitled against any Remaining Shareholder.
2.5 Offer not made where unlawful
The Offer shall not constitute an offer to purchase or the
solicitation of an offer to sell any ConvergeNet shares in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to the registration or qualification under the laws
of such jurisdiction.
3. CONDITIONS PRECEDENT
The Offer is not subject to any outstanding conditions precedent, other than
the receipt of the required approval of the TRP, including the issuance by the
TRP of the requisite compliance certificate.
4. IRREVOCABLE UNDERTAKINGS
The Offeror has obtained irrevocable undertakings from Greentree Investments
301 (Proprietary) Limited, M Cubed, Absa Bank Limited and the Lester Peteni
Family Trust, who hold 132 338 037 (14.36%), 94 833 926 (10.29%), 86 173 500
(9.35%) and 12 000 000 (1.30%) shares in ConvergeNet, respectively, not to
accept the Offer.
5. EXISTING SHAREHOLDING OF THE OFFEROR AND BENEFICIAL INTEREST IN
CONVERGENET
Save as detailed herein, there are no beneficial interests in ConvergeNet:
5.1 held or controlled directly or indirectly by
(i) the Offeror; or
(ii) by any person acting in concert with the Offeror; or
(iii)by any other person in respect of which the Offeror has
received an irrevocable commitment to accept or vote in favour
of the Offer;
5.2 in respect of which the Offeror holds an offer to purchase; or
5.3 in respect of which any person acting in concert with the Offeror
holds an option to purchase.
6. CIRCULAR
A circular containing full details of the Offer, including a form of
acceptance, surrender and transfer, will be, subject to the approval of the
TRP, posted to ConvergeNet shareholders within 20 business days from the date
of publication of this announcement. The salient dates and times in respect
of the Offer will also be published in due course.
7. RESPONSIBILITY STATEMENT
The Offeror accepts responsibility for the information contained in this
announcement. To the best of its knowledge and belief, the information
contained in this announcement is true and nothing has been omitted which is
likely to affect the import of the information.
Johannesburg
12 March 2012
Corporate Advisor to the Offeror: AfrAsia Corporate Finance (Proprietary)
Limited
Date: 12/03/2012 16:00:02 Produced by the JSE SENS Department.
