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Disposal of the Logistics Group and Renewal of Cautionary Announcement
ZEDER INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2006/019240/06)
Share code: ZED
ISIN: ZAE000088431
LEI: 37890022AF5FD117D649
(“Zeder” or “the Company”)
DISPOSAL OF THE LOGISTICS GROUP AND RENEWAL OF CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Zeder shareholders (“Shareholders”) are referred to Zeder’s cautionary announcement
dated 14 April 2021, advising that the Company had received several approaches from
third parties interested in acquiring a number of Zeder portfolio investments
(“Approaches”), as subsequently renewed, most recently on 30 September 2021
("Cautionary Announcements”).
Shareholders are advised that on Friday, 12 November 2021, the Company, through its
wholly-owned subsidiary, Zeder Financial Services Limited (“ZFS”), entered into an
agreement (“Agreement”) with, inter alia, TLG Midco Proprietary Limited (“Purchaser”)
and TLG Acquisition Holdings Proprietary Limited (“Purchaser’s Shareholder”), in terms
of which ZFS will sell all of its shares in the issued share capital of The Logistics Group
Proprietary Limited (“TLG Group”), comprising 98.22% of TLG Group’s shares in issue
(“Sale Shares”), to the Purchaser for a disposal consideration of up to R1,571,467,181
(“Disposal Consideration”) (“Disposal”).
The Purchaser and the Purchaser’s Shareholder are ultimately controlled by investment
funds, which funds are managed by African Infrastructure Investment Managers
Proprietary Limited (AIIM).
2. DESCRIPTION OF THE BUSINESS OF TLG GROUP
TLG Group is an asset-light business, operating strategic logistical and terminal assets in
Southern Africa. This includes, amongst other, strategic port and rail terminal services
and warehousing facilities, stevedoring facilities and digital transport technology services.
3. RATIONALE FOR THE DISPOSAL
The Disposal is in line with Zeder’s strategic review and pursuant to the evaluation of
Approaches received on various portfolio assets. The Disposal is part of a value-unlock
initiative to maximise value for Shareholders.
4. DISPOSAL CONSIDERATION
The Disposal Consideration is based on a 100% equity valuation for TLG Group of
R1,600,000,000. The Disposal Consideration comprises an initial disposal consideration
for Zeder of R1,353,561,997, payable in cash on the Closing Date of the Disposal, and
earn-out payments totalling R217,905,184 (“Earn-Out”), payable in cash after the Closing
Date.
5. APPLICATION OF THE DISPOSAL CONSIDERATION
Zeder intends to distribute the majority of the Disposal Consideration to Shareholders,
after payment of transaction costs and all directly-related obligations.
6. CONDITIONS PRECEDENT
The Disposal is subject to the fulfilment of the following outstanding conditions precedent
(“Conditions Precedent”):
- PSG Financial Services Limited, as 48.6% shareholder of Zeder, providing an
irrevocable undertaking to vote all of the voting rights attached to its shares in favour
of the resolutions required to approve the Disposal;
- Zeder, as the sole shareholder of ZFS, providing an irrevocable undertaking to vote
all of the voting rights attached to its shares in favour of the resolutions required, as
sole shareholder, to approve the Disposal;
- obtaining such requisite approvals and passing the resolutions required to approve
the Disposal, in terms of the JSE Limited Listings Requirements and the provisions
of the Companies Act;
- the adoption of a new management incentive scheme for senior management of TLG
Group;
- the conclusion of transaction agreements required to give effect to TLG Group
internal restructure steps which will be implemented immediately prior to, or after, the
implementation of the Disposal;
- the written consent from counterparties to certain material contracts (to the extent
required) regarding the change in control of TLG Group pursuant to the
implementation of the Disposal; and
- the Disposal being unconditionally approved by the requisite competition authorities
or conditionally approved on terms and conditions acceptable to the parties to the
Agreement.
The Conditions Precedent must be fulfilled or waived, as the case may be, by no later
than 31 March 2022, which date may be extended by the parties in writing.
7. EFFECTIVE DATE OF THE DISPOSAL
Delivery and payment in respect of the Sale Shares will take place on the 15th business
day following the date on which the last of the Conditions Precedent is fulfilled or, where
applicable, waived (“Closing Date”).
8. FINANCIAL INFORMATION
The value of Zeder’s interest in TLG Group included in Zeder’s latest published financial
information comprising its unaudited interim financial statements for the six months ended
31 August 2021, was R1,430,000,000. These unaudited interim financial statements were
prepared in terms of International Financial Reporting Standards (IFRS).
The total fair value gain and dividend income attributable to TLG Group recognised in the
aforementioned financial statements were R140,000,000.
9. WARRANTIES AND OTHER SIGNIFICANT TERMS OF THE AGREEMENT
The Agreement contains representations, warranties, specific indemnities and
undertakings by ZFS in favour of the Purchaser which are standard for a transaction of
this nature. Full details of the Disposal will be set out in the circular referred to in
paragraph 11 below. The Earn-Out is generally linked to certain extensions and/or
renewals of agreements but is not linked to any profit warranty.
10. CLASSIFICATION OF THE DISPOSAL
The Disposal is a category 1 transaction in terms of the JSE Limited Listings
Requirements and is required to be approved by an ordinary resolution of Shareholders
and accordingly a general meeting of Shareholders will be convened.
11. CIRCULAR
A circular containing the full details of the Disposal, incorporating a notice convening the
required general meeting of Shareholders, will be distributed to Shareholders in due
course, at which time the salient dates and times of the Disposal, including the date of the
general meeting, will be announced on SENS.
12. VOLUNTARY UPDATE OF THE ZEDER SOTP VALUE PER SHARE
As an investment holding company, Zeder continues to use, inter alia, the sum-of-the-
parts (“SOTP“) value as benchmark to measure performance.
Shareholders should note that the live SOTP value per share available on Zeder’s
website, has been updated following the increase in the TLG Group valuation to reflect
the Disposal Consideration and the provision of deferred tax on the Disposal.
While the SOTP calculation is indicative of the value of Zeder’s underlying portfolio of net
assets, it does not take into account factors such as tax on the potential disposal of
underlying assets (apart from TLG Group for which deferred tax has now been provided),
head office operating costs and other factors. It should further be noted that these
valuations are not necessarily an indication of the values at which Zeder would consider
selling any of its investments.
Shareholders are reminded that the SOTP value per share shown on Zeder’s website is
for general information purposes only and does not constitute an offer to sell any
securities or constitute investment advice relating to securities or a representation that
the security is a suitable or appropriate investment for any person or warrants any share
price value in any form. Investors are advised to give independent consideration to and
conduct independent investigation with regards to this information and the value of Zeder
shares, and to obtain investment advice from their independent financial advisors.
13. RENEWAL OF CAUTIONARY
Further to the Cautionary Announcements, should the remaining Approaches ultimately
result in the Company entering into further transactions with one or more of the parties
who have approached the Company, such transactions may have a material effect on the
price of the Company’s securities.
Zeder is still considering the Approaches on various portfolio assets and continues to
engage with various parties. Accordingly, Shareholders are advised to continue
exercising caution when dealing in the Company’s securities until a further announcement
is made.
Stellenbosch
12 November 2021
Transaction advisor and sponsor
PSG Capital
Project advisor
Khanda Capital
Independent joint sponsor
UBS South Africa
Date: 12-11-2021 09:02:00
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