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Joint Announcement of the Firm Intention to make a Mandatory Offer to Texton shareholders
TEXTON PROPERTY FUND LIMITED
Granted REIT status by the JSE
(Incorporated in the Republic of South Africa)
(Registration number 2005/019302/06)
JSE share code: TEX ISIN: ZAE000190542
(“Texton” or the “Company”)
JOINT ANNOUNCEMENT OF THE FIRM INTENTION TO MAKE A MANDATORY OFFER TO TEXTON
SHAREHOLDERS
1. INTRODUCTION
Shareholders are advised that Texton has received notice from Oak Tech Properties Proprietary Limited,
Oak Tech Trading Proprietary Limited and its concert parties (as detailed in paragraph 3 below)
(“Consortium” or “Offeror”), that the Consortium has entered into an unconditional agreement to acquire
additional Texton shares, such that the Consortium’s total beneficial interest will increase to c.40% (currently
c.32%) of the Company’s issued ordinary share capital (net of treasury shares). Accordingly, the Consortium
will proceed with a mandatory offer to all Texton shareholders to acquire their ordinary shares in Texton (each
a “Mandatory Offer Share”), as contemplated in section 123 of the Companies Act, No. 71 of 2008, as
amended (“Companies Act”), for a cash consideration of R1.20 per Mandatory Offer Share (“Mandatory
Offer Consideration”) (“Mandatory Offer”).
The purpose of this firm intention announcement (“Firm Intention Announcement”) is to advise the
Texton shareholders of the terms and conditions of the Mandatory Offer.
2. RATIONALE FOR THE MANDATORY OFFER
Texton is a small cap, illiquid stock which has seen limited institutional support and access to equity capital,
operating in an extremely volatile equity and commercial environment. In light of these, and other factors,
the Consortium believes that some Texton shareholders, who no longer wish to remain as shareholders in
the Company and who have not been able to dispose of their shares in the Company due to the lack of
liquidity in the share, would welcome an attractive cash liquidity event.
Texton will further benefit from the support of the Consortium as key anchor shareholders subsequent to the
Mandatory Offer. Furthermore, it is not the current intention of the Consortium to apply for the delisting of
Texton from the Johannesburg Stock Exchange ("JSE").
The Mandatory Offer will afford Texton shareholders an opportunity to realise their investment in Texton at
the Mandatory Offer Consideration, which represents a premium of:
- 53.8% to the closing share price of 78 cents as at 29 October 2020, being the business day prior
to the publication of this Firm Intention Announcement;
- 47.1% to the 5-day volume weighted average price (“VWAP”) up to and including 29 October
2020; and
- 42.9% to the 30-day VWAP up to and including 29 October 2020.
3. INFORMATION ABOUT THE OFFEROR
A concert party arrangement has been formally established amongst Oak Tech Properties Proprietary
Limited, Kloof Capital South Africa Proprietary Limited, Oak Tech Trading Proprietary Limited, KCSA
Investments Proprietary Limited, Geomer Investments Proprietary Limited, Rex Trueform Group Limited,
Wheatfield Estate Foundation Trust and Bronwyn Elaine Keene-Young in relation to any shares held from
time to time by them in Texton. Accordingly, in terms of the Companies Act and the Takeover Regulations
promulgated in terms of the Companies Act (the “Takeover Regulations”), Kloof Capital South Africa
Proprietary Limited, KCSA Investments Proprietary Limited, Geomer Investments Proprietary Limited,
Rex Trueform Group Limited, Wheatfield Estate Foundation Trust and Bronwyn Elaine Keene-Young are
deemed to be acting in concert with Oak Tech Properties Proprietary Limited and Oak Tech Trading
Proprietary Limited.
4. TERMS AND CONDITIONS OF THE MANDATORY OFFER
4.1 Terms of the Mandatory Offer
The Offeror will make a Mandatory Offer, in terms of section 123 of the Companies Act whereby
each shareholder will be entitled to elect whether or not to dispose of all of their Mandatory Offer
Shares to the Offeror for the Mandatory Offer Consideration (“Mandatory Offer Participants”).
4.2 Mandatory Offer Consideration
Mandatory Offer Participants who have so elected shall receive the Mandatory Offer
Consideration, in the amount of R1.20 per Mandatory Offer Share held by such Mandatory Offer
Participant after the fulfillment or waiver of the Mandatory Offer Conditions as defined and set out
below.
4.3 The Mandatory Offer Conditions
4.3.1 Implementation of the Mandatory Offer is subject to the fulfilment or waiver, as the
case may be, of the following conditions ("Mandatory Offer Conditions") by no later
than 31 March 2021:
4.3.1.1 the receipt of all approvals, consents or waivers from those South
African regulatory authorities as may be necessary for the Offeror to
implement the Mandatory Offer, including the South African
Competition Authorities (“Competition Authorities”), JSE and the
Takeover Regulation Panel ("TRP"), on an unconditional basis or, to
the extent that any such regulatory approvals, consents or waivers
are obtained subject to any condition or qualification, the Offeror (to
the extent that it is adversely affected by the condition or
qualification) confirms in writing that the condition or qualification is
acceptable to it.
4.3.2 Waiver and extension of Mandatory Offer Conditions
4.3.2.1 the Mandatory Offer Conditions set out in paragraph 4.3.1.1 are not
capable of waiver but the time and/or date for fulfilment of these
Mandatory Offer Conditions may be extended from time to time as
may be agreed in writing between the Offeror and the TRP, JSE
and/or Competition Authorities.
4.3.2.2 an announcement will be released on SENS as soon as practicable
after all the Mandatory Offer Conditions have been fulfilled or
waived, if the Mandatory Offer Conditions are not fulfilled or waived
timeously, or if the time and/or date for fulfilment or waiver of the
Mandatory Offer Conditions is extended.
4.4 Independent Board
Texton has constituted an independent board of directors of Texton (“Independent Board”) for
the purposes of the Mandatory Offer, including, evaluating the terms and conditions of the
Mandatory Offer and advising Texton shareholders thereon as required by the Takeover
Regulations. The Independent Board comprises Shelley Thomas, Andrew Hannington, John
Macey and Wayne van der Vent.
5. MANDATORY OFFER
The Offeror currently holds 111 826 695 shares, being c.32% of the issued ordinary shares of Texton (net of
treasury shares of 26 672 213 (“Treasury Shares)). The Offeror has entered into an unconditional agreement
with Coronation Asset Management (Pty) Ltd to acquire an additional 28 185 669 Texton shares, which will
be transferred and received by no later than T + 3 (the “Acquisition”). On completion of the Acquisition, the
Offeror’s total beneficial interest in Texton will amount to 140 012 364 Texton shares, being 40.07% of the
issued ordinary shares of Texton (net of Treasury Shares).
6. BENEFICIAL INTEREST IN TEXTON ORDINARY SHARES
The Offeror has disclosed the following beneficial interests in Texton held by the Offeror, persons related to
the Offeror and/or persons acting in concert with the Offeror:
Percentage of Texton shares (net
Shareholder Number of Texton Shares(1)
of Treasury Shares)(1)
Oak Tech Properties (Pty) Ltd 27,685,667 7.92%
Kloof Capital South Africa (Pty) Ltd 17,480,848 5.00%
KCSA Investments (Pty) Ltd 4,828,077 1.38%
Oak Tech Trading (Pty) Ltd 84,579,467 24.21%
Geomer Investments (Pty) Ltd 929,200 0.27%
Wheatfield Estate Foundation Trust 2,175,771 0.62%
Bronwyn Elaine Keene-Young 2,000,000 0.57%
Rex Truefrom Group Ltd 333,334 0.10%
Total 140,012,364 40.07%
Note 1 – post the Acquisition
7. INDEPENDENT EXPERT AND FAIR AND REASONABLE OPINION
The Independent Board has appointed PSG Capital (“Independent Expert”) as the independent expert
to provide it with external advice in connection with the Mandatory Offer, in the form of the fair and
reasonable opinion as required by and in compliance with the Takeover Regulations.
The full substance of the Independent Expert’s report in connection with the Mandatory Offer, once
procured, will be more fully set out in the circular to be posted to shareholders as referred to in paragraph
11 below.
8. INDEPENDENT BOARD AND TEXTON BOARD RESPONSIBILITY STATEMENT
The Independent Board accepts responsibility for the information contained in this announcement insofar
as it relates to Texton and the Mandatory Offer. To the best of their collective knowledge and belief, the
information contained in this announcement is true and this announcement does not omit anything likely
to affect the importance of the information.
9. OFFEROR RESPONSIBILITY STATEMENT
The Offeror accepts responsibility for the information contained in this announcement insofar as it relates
to detail around the Offeror and the Mandatory Offer. To the best of their collective knowledge and belief,
the information contained in this announcement is true and this announcement does not omit anything
likely to affect the importance of the information.
10. CASH CONFIRMATION
The funds to settle the Mandatory Offer Consideration are in place and, in accordance with Regulation
111(4) and 111(5) of the Takeover Regulations, the Offeror has obtained and delivered to the TRP an
irrevocable unconditional bank guarantee issued by Investec Bank Limited for the maximum possible
Mandatory Offer Consideration.
11. POSTING OF THE COMBINED CIRCULAR
Texton and the Offeror have indicated that they intend to issue a joint circular to Texton shareholders,
containing full terms and conditions of the Mandatory Offer (“Circular”).
Full details of the Mandatory Offer as well as the independent expert’s opinion and the recommendation
of the Independent Board will be included in the Circular which will contain, inter alia, the terms of the
Mandatory Offer and pertinent dates relating to the Mandatory Offer. The Circular will be posted within
20 business days of the date of this announcement.
SANDTON
30 October 2020
CORPORATE ADVISER AND SPONSOR TO TEXTON
Investec Bank Limited
CORPORATE ADVISER TO OAK TECH PROPERTIES
Investec Bank Limited
LEGAL ADVISER TO OAK TECH PROPERTIES
Bernadt Vukic Potash & Getz Attorneys
LEGAL ADVISER TO TEXTON
Cliffe Dekker Hofmeyr Incorporated
INDEPENDENT EXPERT
PSG Capital
Date: 30-10-2020 09:51:00
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