| Tue 27 Mar 2012, 9:00 | | GEN - General - Firm intention to make a mandatory offer to acquire ordinary |
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JSE
GEN
GEN - General - Firm intention to make a mandatory offer to acquire ordinary
shares in Optimum Coal Holdings Limited at a price of R38 per share
Piruto B.V. Lexshell 849 Investments
(Registration number: (Proprietary) Limited
B.V. 1610663) (Registration number:
2010/023373/07)
FIRM INTENTION TO MAKE A MANDATORY OFFER TO ACQUIRE ORDINARY SHARES IN OPTIMUM
COAL HOLDINGS LIMITED AT A PRICE OF R38 PER SHARE
1.INTRODUCTION
Shareholders of Optimum Coal Holdings Limited ("Optimum") are referred to the
joint cautionary announcement released by Optimum and a consortium
("Consortium") comprising Piruto B.V. ("Glencore"), a whollyowned subsidiary of
Glencore International AG, and Lexshell 849 Investments (Proprietary) Limited
("Lexshell"), a company whollyowned by Mr Cyril Ramaphosa, on 1 September 2011,
and the announcements released by each of Optimum and the Consortium on 16
November 2011 (all such announcements are collectively referred to as the
"Announcements").
Shareholders were informed in the Announcements that Glencore had acquired
28.58% of the issued share capital of Optimum and that the Consortium had
concluded various conditional agreements to acquire a further 36.56% of the
issued share capital of Optimum. Since the date of the last announcement,
Glencore has acquired a further 2.63% of the issued share capital of Optimum.
The various conditions precedent to the conditional agreements have now been
fulfilled and the transactions have been implemented with the result that
Glencore and Lexshell, who are acting in concert, have acquired, directly and
indirectly, 67.77% of the issued share capital of Optimum (such transaction, the
"Transaction").
As the Consortium is now in a position to exercise at least 35% of the voting
rights attached to the ordinary shares of Optimum, it is required, in terms of
section 123(3) of the Companies Act 71 of 2008 ("Companies Act"), to make a
mandatory offer to acquire the shares of all shareholders of Optimum not already
owned or controlled by the Consortium ("Offer").
The Offer will be made in compliance with the Consortium`s obligations in terms
of the Companies Act and the Takeover Regulations. The Consortium will offer
the remaining shareholders R38 per Optimum share in cash.
2. DESCRIPTION OF THE CONSORTIUM
The Glencore group is a leading integrated commodities producer and marketer.
It produces, sources, processes, refines, transports, stores, finances and
supplies commodities needed by industries around the world. The Glencore group
combines the strength of its unique marketing capability with the insight and
supply of its own diversified portfolio of production and logistics assets.
Glencore International plc is listed in London and Hong Kong, registered in
Jersey, and headquartered in Baar, Switzerland. Its relationships with
producers and consumers of commodities are supported by its global network of 50
offices in 40 countries throughout Europe, North, Central and South America, the
Commonwealth of Independent States, Asia, Australia, Africa and the Middle East.
Over 2 700 people work in Glencore`s marketing operations. Glencore`s
industrial operations directly or indirectly employ over 54 800 people in 30
countries.
Lexshell is a company that has been formed by Mr Cyril Ramaphosa and the issued
share capital of Lexshell is held 100% by Mr Cyril Ramaphosa. Mr Cyril
Ramaphosa is the Executive Chairman of Shanduka Group (Proprietary) Limited
("Shanduka Group") and holds a number of nonexecutive directorships, including
being the nonexecutive Chairman of MTN Group and Bidvest Group. Lexshell`s
participation in the Transaction will be partly funded by the Shanduka Group.
3. MATERIAL TERMS OF THE OFFER
3.1 Obligation to make the Offer
As noted above, the Consortium has become able to exercise at least 35% of the
voting rights attaching to the ordinary shares of Optimum. Accordingly, the
Consortium is required in terms of section 123 of the Companies Act to make an
offer to acquire all the remaining ordinary shares in the issued share capital
of Optimum held by Optimum shareholders. The shares in respect of which the
Offer is accepted will be purchased by one of the members of the Consortium or
an entity controlled by the Consortium.
3.2 Offer Consideration
The consideration for the Offer ("Offer Consideration") will be R38 per Optimum
share and will be paid in cash. The Offer Consideration is not less than the
highest cash consideration paid by the Consortium for any Optimum share,
excluding commission, tax and duty, within the sixmonth period before the date
of this announcement.
The Offer Consideration represents a premium of:
- 41.26% to the closing price of R26.90 of Optimum shares on 16 August 2011,
being the date before the date on which Optimum released its first cautionary
announcement;
- 51.88% to the 30day volume weighted average price of R25.02 of Optimum shares
on 16 August 2011, being the date before the date on which Optimum released its
first cautionary announcement;
- 14.80% to the closing price of R33.10 of Optimum shares on 31 August 2011,
being the date before the date of the joint cautionary announcement;
- 37.73% to the 30day volume weighted average price of R27.59 of Optimum shares
on 31 August 2011, being the date before the date of the joint cautionary
announcement;
- 2.73% to the closing price of R36.99 of Optimum shares on 26 March 2012, being
the date before the date of this announcement; and
- 5.91% to the 30day volume weighted average price of R35.88 of Optimum shares
on 26 March 2012, being the date before the date of this announcement.
The Consortium believes that the Offer consideration reflects fair value for the
ordinary shares of Optimum and will be attractive to Optimum shareholders.
3.3 Offer Unconditional
The Offer is not subject to any conditions precedent, other than the receipt of
the required approval of the Takeover Regulation Panel (the "TRP"), including
the issuance by the TRP of the requisite compliance certificate.
4. RATIONALE AND BENEFIT OF THE TRANSACTION
The Glencore group has a strong presence in South Africa through its joint
venture with Shanduka Resources, Shanduka Coal (Proprietary) Limited and through
its investment in Umcebo Mining (Proprietary) Limited, each of which owns
various coal mining operations in the country.
The Glencore group intends to build on its position as one of the world`s
largest physical commodity suppliers and track record of extending product and
geographical range by continuing to target market share increases in the
geographies and commodities in which it currently operates. The Transaction
fits this strategy and will provide a critical asset addition to its existing
South African operations. It will also contribute towards building on the
Glencore group`s position as a significant South African coal producer and
supplier, making the company a formidable player within the coal mining sector.
The Consortium has identified a number of key strategic objectives that will be
achieved through the Transaction, including:
- creating significant value through the application of Glencore`s market
knowledge and operational and technical knowhow;
- accessing the value of Optimum`s asset portfolio;
- capitalising on the operational synergies and cost savings to be realised from
the Consortium and Optimum`s contiguous assets; and
- enhancing the Glencore equity story and its investor appeal.
As advised in the joint cautionary announcement, the Consortium recognises
Optimum`s role as a leader in transformation in the mining industry and is of
the view that the Transaction will not adversely affect the Historically
Disadvantaged South African status of Optimum.
5. BENEFICIAL INTERESTS IN OPTIMUM
As at the date of this announcement, the Consortium, directly and indirectly,
has acquired the beneficial interests in Optimum set out in the table below.
The indirect interests are derived through the holding by the Consortium of
interests in various shareholders of Optimum ("BEE Shareholders"). None of
these interests were acquired at a price that values the shares in Optimum at a
price per share in excess of R38.
Source of Interest Percentage Percentage Effective
Interest in Interest in Interest in
Optimum BEE Optimum held
Shareholder by the
held by the Consortium
Consortium
Direct Interests
Glencore 35.46% n/a 35.46%1
Lexshell 0% n/a 0%
Indirect Interests
Kwini Mining 10.33% 100% 10.33%
Investments (Pty) Ltd
Micsan Investments 7.55% 49% 3.70%2
(Pty) Ltd ("Micsan")
Monkoe Coal 5.28% 45% 2.38%2
Investments (Pty) Ltd
("Monkoe")
Warrior Coal 15.90% 100% 15.90%1
Investments (Pty) Ltd
("Warrior")
Total 74.52% 67.77%
Notes
1. The current percentage interest in Optimum held by Warrior is 13.7%.
Glencore is, however, required to deliver 2.2% of the Optimum shares to
Warrior pursuant to its assumption of the obligations of one of the former
shareholders of Warrior under a scrip lending agreement between that
shareholder and Warrior. Accordingly, the effective interest of Glencore
in Optimum has been reduced by 2.2% and the interest of Warrior in Optimum
increased by 2.2% to take into account this obligation and more accurately
reflect the interests of the Consortium in Optimum.
2. As the Consortium has the ability to veto the disposal by Micsan and
Monkoe of Optimum shares into the Offer, such shares have been included as
shares controlled by the Consortium for the purposes of determining the
shareholders to whom the Offer must be made.
6.CASH CONFIRMATION
The Consortium has provided the TRP with an irrevocable and unconditional
confirmation from Nedbank Limited that sufficient funds are held in escrow by
Nedbank Limited to settle the full Offer Consideration that may become payable
on implementation of the Offer.
7.OFFER CIRCULAR
The offer circular will be dispatched to the shareholders of Optimum within 20
business days of the date of this announcement, or such longer period as may be
allowed by the TRP. The salient dates and times in respect of the Offer will
also be published in due course.
8. RESPONSIBILITY STATEMENT
The Directors of Glencore and Lexshell accept responsibility for the information
contained in this announcement to the extent that it relates to the Consortium,
including any statement regarding the beneficial interest secured by the
Consortium, or members of it. In addition, they certify that, to the best of
their knowledge and belief, the information in this announcement regarding the
Consortium and its interests is true and, where appropriate, does not omit
anything that is likely to affect the importance of the information.
Johannesburg
27 March 2012
Financial Adviser to Legal Adviser to Legal Adviser to
Glencore Glencore Lexshell
Bank of America Werksmans Attorneys Edward Nathan
Merrill Lynch Sonnenbergs
General
The release, publication or distribution of this announcement in jurisdictions
other than South Africa may be restricted by law and, therefore, any persons who
are subject to the laws of any jurisdiction other than South Africa should
inform themselves about and observe any applicable requirements in those
jurisdictions. This announcement has been prepared for the purposes of
complying with the Companies Act and the Takeover Regulations and the
information disclosed may consequently not be the same as that which would have
been disclosed if this announcement had been prepared in accordance with the
laws and regulations of any jurisdiction other than South Africa.
This announcement is not intended to, and does not, constitute, or form part of,
an offer to sell or an invitation to purchase or subscribe for any securities or
a solicitation of any vote or approval in any jurisdiction. This announcement
does not constitute a prospectus or a prospectus equivalent
document.Shareholders of Optimum are advised to read carefully the formal
documentation in relation to the Offer once it has been dispatched. The Offer
will be made solely through the offer circular, which will contain the full
terms and conditions of the Offer. Any decision to accept the Offer or other
response to the proposals should be made only on the basis of the information
contained in the offer circular.
Merrill Lynch International and Merrill Lynch South Africa (Proprietary)
Limited, subsidiaries of Bank of America Corporation, are acting exclusively for
Glencore in connection with the Transaction and for no one else and will not be
responsible to anyone other than Glencore for providing the protections afforded
to its clients or for providing advice in relation to the Transaction.
Date: 27/03/2012 09:00:01 Produced by the JSE SENS Department.
