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Firm Intention by Sekunjalo to Make an Offer to Acquire Shares in AYO and the Subsequent Proposed Delisting of AYO
AYO TECHNOLOGY SOLUTIONS LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1996/014461/06
JSE share code: AYO
ISIN: ZAE000252441
("AYO" or "the Company")
FIRM INTENTION BY SEKUNJALO INVESTMENT HOLDINGS PROPRIETARY LIMITED
("SEKUNJALO") TO MAKE AN OFFER TO ACQUIRE SHARES IN AYO TECHNOLOGY SOLUTIONS
LIMITED ("AYO") AND THE SUBSEQUENT PROPOSED DELISTING OF AYO FROM THE JSE
1. INTRODUCTION
1.1 Shareholders of AYO ("Shareholders") are hereby advised that the board of directors of the
Company ("Board") has recently received a firm intention from Sekunjalo Investment Holdings
Proprietary Limited ("Sekunjalo"), for Sekunjalo to make an offer to acquire shares in AYO,
which the Board is now presenting to Shareholders. This transaction (" Transaction")
incorporates:
1.1.1 an offer by Sekunjalo to all "Eligible Shareholders", being all Shareholders other than
Sekunjalo and its concert parties, to acquire all of the AYO ordinary shares in issue
("Shares"), other than the 170 661 126 shares held by Sekunjalo and the concert parties
("Offer Shares"), for a cash consideration of 52 cents per share, equalling a total
consideration of R80 772 531 ("Offer Consideration") ("Offer"), in accordance with the
provisions of section 117(1)(c)(v) of the Companies Act, 2008 (Act 71 of 2008) (as
amended) ("Companies Act") and paragraphs 1.15 and 1.16 the Listings Requirements
of the JSE Limited ("JSE"); and
1.1.2 the subsequent Offer of the Shares is subject to approval thereof by Eligible Shareholders
at a general meeting ("General Meeting") in accordance with the provisions of paragraph
1.16 of the Listings Requirements ("Proposed Delisting").
1.2 Sekunjalo will acquire the Offer Shares for the Offer Consideration which, in terms of paragraph
1.15 and 1.16 of the Listings Requirements, must be deemed by an independent expert
acceptable to the JSE ("Independent Expert"), to be fair.
1.3 The Offer, which is an affected transaction as defined in section 117(1)(c)(v) of the Companies
Act, Chapter 5 of the Companies Regulations, 2011, promulgated under the Companies Act
(which includes the "Takeover Regulations" issued pursuant to sections 120 and 223 of the
Companies Act) ("Companies Regulations") (as amended) and the Takeover Regulation Panel
("TRP"), established in terms of section 196 of the Companies Act.
1.4 The content of this announcement ("Firm Intention Announcement") reflects Sekunjalo's firm
intention to make an offer to Eligible Shareholders as contemplated in the Takeover Regulations.
1.5 The purpose of this Firm Intention Announcement is to notify Shareholders of the Transaction
and to inform them of the salient terms and conditions of the Offer and the Proposed Delisting.
2. THE OFFER AND OFFER CONSIDERATION
2.1 Sekunjalo will acquire the Offer Shares, being a maximum of 155 331 790 shares, in respect of
which valid acceptances are received prior to the closing date of the Offer, for a total maximum
Offer Consideration of R80 772 531.
2.2 The Offer will be subject to, inter alia, the condition that the Proposed Delisting, pursuant to the
voluntary delisting provisions of the Listings Requirements, is approved by at least 75% of
Shareholders present or represented by proxy at the General Meeting ("Delisting Resolution")
and the JSE ("Delisting Condition").
2.3 The Offer Consideration shall be settled in full in cash, 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 an Eligible Shareholders.
2.4 The tax implications of the Offer are dependent upon the individual circumstances of the Eligible
Shareholders and the tax jurisdiction applicable to such Eligible Shareholders. It is
recommended that Eligible Shareholders seek appropriate professional advice in this regard.
2.5 The Offer will be implemented on the issuance of the compliance certificate by the TRP in terms
of section 119(4) of the Companies Act.
2.6 The Delisting will occur pursuant to the Delisting Resolution being approved and the Offer being
implemented.
3. BACKGROUND TO AND RATIONALE FOR THE OFFER
3.1 AYO's share price has declined significantly since listing in December 2017and has reported a
constant increase in audited net losses year on year. This can be seen from its latest results
released on 31 March 2025 and 25 April 2025. This decline in share price and increase in net
losses is mainly due to recurrent negative media reportage. It is highly unlikely that the value
destroyed through these campaigns will be reversed in the near future. In addition, the following
external factors, as reflected in the Company's annual report, have impacted the share price
significantly:
3.1.1 The likely prospect of no transactional banking services should litigation against the banks
not be successful.
3.1.2 Other ongoing legal litigation including a liquidation application.
3.1.3 Reputational issues stemming from a series of negative and erroneous media articles.
3.2 Sekunjalo is of the view that if AYO is given time away from public scepticism, the intrinsic value
of the AYO group can be increased over time for all shareholders.
3.3 AYO shares are highly illiquid and it will be difficult for AYO shareholders to dispose of their
shareholding in the open market.
3.4 The Company is subject to elevated expenditures arising from its listing on the Johannesburg
Stock Exchange (JSE), including but not limited to, listing fees and sponsor-related charges. In
addition, the remuneration awarded to executive management is considerable, reflecting
market-aligned compensation structures consistent with those of comparable listed entities .
Further, the ongoing legal litigation is expected to increase operating costs.
3.5 Audit costs have increased significantly due to the perceived increase in risk caused by negative
media attention. This also resulted in a delay in the audit being completed for the 31 August
2024 financial year.
3.6 As an investment technology holding company, AYO and its group companies enter into various
corporate actions which require compliance with JSE Listing Requirements. Given the low
market capitalisation of AYO, the majority of these transactions require shareholder approval
and circulars. This increases cost and delays in implementing the transactions. The delays
negatively impact the future operations of the underlying businesses.
3.7 The intention for the delisting is not to expropriate shares from minority shareholders but rather
to increase the intrinsic value of AYO for all shareholders. With this in mind, Sekunjalo will
provide shareholders with an election to remain in the unlisted environment, with the intention
of increasing value over time, or receive a cash consideration on delisting.
4. INDEPENDENT EXPERT AND FAIR AND REASONABLE OPINION
4.1 In accordance with the requirements of the Takeover Regulations, AYO has constituted an
independent board comprising Rosemary Mosia, Sello Rasethaba, and Adv Ngoako Ramathlodi
("Independent Board") for purposes of evaluating the terms and conditions of the Offer. The
directors constituting the Independent Board are independent in accordance with Regulation
108 of the Companies Act Regulations. The independence of each director has been duly
assessed by the board, including with reference to the rebuttable presumpti ons set out in
Regulation 108(8), and none are conflicted as contemplated therein.
4.2 The Independent Board has appointed Exchanges Sponsors Proprietary Limited as the
Independent Expert in terms of regulation 110 of the Companies Regulations and paragraph
1.15(d) of the Listings Requirements, as read with Schedule 5 of the Listings Requirements, to
provide the Independent Board with external advice in relation to the Offer and the Delisting, by
way of a fair and reasonable opinion as required by and in compliance with the Companies
Regulations and the Listings Requirements.
4.3 The Independent Expert's full report will be included in a circular to be issued to Shareholders
("Circular").
5. CONDITIONS TO THE TRANSACTION
5.1 The Offer shall be proposed by the Board (on recommendation of the Independent Board), in
accordance with section 117(1)(c)(v) of the Companies Act, as read with the Companies
Regulations.
5.2 The implementation of the proposed Transaction will be subject to the fulfilment of the following
conditions precedent by no later than 31 December 2025:
5.2.1 shareholder approval at a general meeting is required in order to implement the Proposed
Delisting. The Offer will be subject to the Delisting Resolution being adopted by the
requisite majority of shareholders at the relevant general meeting as contemplated in
paragraphs 1.15(a) and 1.16 of the JSE Listings Requirements.
5.2.2 all approvals, consents or waivers from those South African regulatory excluding the
compliance certificate issued by the Takeover Regulation Panel in terms of Section 121(b)(i)
of the Act authorities as may be necessary in relation to the Offer and the Delisting,
including such approvals as may be required from the JSE, are obtained on an unconditional
basis or, to the extent that any such regulatory approvals, consents or waivers are obtained
subject to any condition or qualification, Sekunjalo confirms in writing that the condition or
qualification is acceptable to it, which confirmation shall not be unreasonably withheld or
delayed.
5.2.3 all necessary Shareholder approvals and/or resolutions as may be necessary to give effect
to the Offer have been obtained, including, but not limited to, the special resolution at the
General Meeting of Eligible Shareholders.
5.3 Unless all the conditions precedent have been fulfilled by not later than the date for fulfilment
thereof, set out in paragraph 5.2, the Offer will lapse and will not become of any force or effect
and the status quo ante will be restored.
6. CONCERT PARTIES
6.1 Sekunjalo has disclosed the following beneficial interests in AYO held by Sekunjalo, persons
related to Sekunjalo and persons acting in concert with Sekunjalo:
PARTY NUMBER OF AYO BENEFICIAL
SHARES INTEREST
Sekunjalo 149 679 677 45,92%
3 Laws Capital South Africa Proprietary Limited 11 875 777 3.63%
Bertolor Proprietary Limited 2 060 000 0.63%
Social Entrepreneurship Fund 7 002 238 2.15%
Ismet Amod and Aziza Amod 72 184 and 1 250 0.02%
6.2 Neither Sekunjalo nor any persons acting in concert with Sekunjalo hold any options to purchase
beneficial interests in AYO shares, nor have they received any irrevocable commitments to
accept the Offer, other than as may be disclosed in this announcement.
7. CASH CONFIRMATION
The funds to settle the Offer Consideration are in place and, in accordance with regulations 111(4) and
111(5) of the Companies Regulations, Sekunjalo has obtained and delivered to the TRP an irrevocable
unconditional confirmation from Adriaans Attorneys and Refiloe Mokoena Attorneys that they hold
sufficient cash in their respective trust accounts, acting as escrow accounts, for the total Offer
Consideration.
8. DISTRIBUTION OF THE CIRCULAR
8.1 AYO and Sekunjalo have indicated that their current intention is to issue a combined Circular to
AYO Shareholders, containing full terms and conditions of the Offer
8.2 The Circular providing full details of the Offer and containing, inter alia, a notice of the General
Meeting, the report by the Independent Expert and the recommendation of the Independent
Board, will be distributed to Shareholders in due course.
9. RESPONSIBILITY STATEMENTS
9.1 Sekunjalo, accepts responsibility for the information contained in this announcement to the
extent that it relates to Sekunjalo. To the best of their knowledge and belief, such information
contained in this announcement is true and nothing has been omitted which is likely to affect
the importance of such information.
9.2 The Board accepts responsibility for the information contained in this announcement for the
accuracy of information related to AYO. To the best of their knowledge and belief, such
information contained in this announcement is true and nothing has been omitted which is likely
to affect the importance of such information.
9.3 The Independent Board accepts responsibility for the information contained in this
announcement specifically for its evaluation of the Offer, its opinion, and its recommendation to
shareholders. To the best of their knowledge and belief, such information contained in this
announcement is true and nothing has been omitted which is likely to affect the importance of
such information.
CAPE TOWN
23 May 2025
Corporate Advisor and Sponsor to AYO
Vunani Sponsors
Date: 23-05-2025 10:48:00
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