The board of directors of IST has been informed in writing by a consortium represented by Ethos Private Equity that it is in the process of finalising the funding arrangements that may result in it making an offer to acquire all the shares in IST. However, as of the date of this announcement, no statement of a firm intention to make an offer has been received by the IST board, although the offeror has undertaken to notify the IST board of its firm intention to make an offer once the funding arrangements have been finalised. The potential offer would be implemented by means of a scheme of arrangement in terms of section 311 of the Companies Act. Should the scheme be successfully implemented, the offeror would hold 100% of the IST shares in issue and IST`s listing on the JSE would be terminated.
Rationale for the scheme
In order for IST to achieve its strategic objectives, it needs to have a significant black economic empowerment (BEE) shareholding. Its existing BEE structure is due to unwind this year and, after a thorough assessment of the alternatives, the IST board concluded that IST`s BEE objectives could be achieved more effectively if IST was a privately held company. Furthermore, IST does not foresee a need to use its JSE listing to raise capital and the offeror therefore does not believe that the costs of maintaining this listing are justified.
Details of the offeror
The offeror is consortium comprising Ethos Private Equity Fund IV and Ethos Technology Fund I, certain members of the IST management team, Alastair Moffat, Lindsay Robertson and ICT Investments (Pty) Ltd, a BEE company.
Terms of the scheme
IST shareholders would be offered 180 cents in cash per IST share held.
Deloitte & Touche, which has been appointed independent advisers to the IST board, has advised the IST board that it believes that the terms of the possible scheme are fair and reasonable to IST shareholders. The IST board has considered the terms of the scheme and is of the opinion that such terms would be fair and reasonable to IST shareholders. The IST board recommends that shareholders vote in favour of the scheme if the offeror notifies the board of a firm intention to make an offer on the material terms contained in this announcement.
The offeror is not able to notify the IST board of its firm intention to make an offer in terms of the Rules of the SRP until such a time as the facility agreement in respect of the senior debt requirements has been finalised. A term sheet has been signed with senior debt funders in respect of the facility agreement and the necessary legal agreements are in the process of being finalised. Accordingly, IST shareholders are advised to exercise caution when dealing in their shares until such a time as a further announcement is made in this regard.
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