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Firm Intentional Ann Proposed Disposal of 50.01% Shareholding in Private Property SA P/L & Withdrawal of Cautionary
COGNITION HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number: 1997/010640/06)
Share code: CGN ISIN: ZAE000197042
(“Cognition” or “the Company”)
FIRM INTENTION ANNOUNCEMENT OF PROPOSED DISPOSAL BY THE COMPANY OF ITS 50,01% SHAREHOLDING IN PRIVATE PROPERTY SOUTH AFRICA PROPRIETARY LIMITED,
AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Shareholders of the Company (“the Shareholders”) are referred to the cautionary announcements dated 3 August, 26 August and 20 September
2022 (inadvertently released again instead of this Firm Intention Announcement) relating to the disposal by the Company of its 50,01% shareholding
in Private Property South Africa Proprietary Limited (“the Disposal”), and terms defined in those announcements are utilised in this announcement. In
this regard, the attention of Shareholders is specifically drawn to the provisions of paragraph 7 below.
As the Disposal is subject to the provisions of section 112, as read with section 117(c) (i), of the Companies Act, 2008 (“the Act”) and the Takeover
Regulations of the Takeover Regulation Panel (“the TRP” and “the Code”), the TRP has ruled that, in accordance with the provisions of regulation 90
of the Regulations, the Company must retain an independent expert acceptable to the TRP (“the Expert”) to report on the terms and conditions of
the Disposal.
In accordance with regulations 108(8) and 108(9) of the Code, the board of directors of the Company (“the Board”) has therefore constituted a sub-
committee of the Board to act as the independent board for the purposes of the Disposal, comprising of Messrs. Miles Crisp, Dennis Lupambo and
Steven Naude, who are independent non-executive directors (“the Independent Board”), and the Independent Board has appointed Exchange
Sponsors Projects Proprietary Limited as the Expert. The Expert has prepared a report to the Independent Board for distribution to the Shareholders
in terms of section 114(3) of the Act and has provided the Independent Board with advice regarding the Disposal and made appropriate
recommendations to the Independent Board to enable the Independent Board to make a recommendation to the Shareholders.
The recommendations of the Board and the Independent Board and the report of the Expert are included in the circular to the Shareholders
containing the terms and conditions governing the Disposal (“the Circular”) which has been distributed to the Shareholders.
2. CONSIDERATION AND CASH CONFIRMATION
The Consideration payable to the Company in terms of the Disposal is an amount of R150 000 000, payable in cash against fulfilment of the conditions
precedent set out in paragraph 4 below.
In compliance with Regulations 111(4) and 111(5) of the Act, the TRP has been provided with the necessary irrevocable unconditional guarantees
issued by the Standard Bank of South Africa Limited and Investec Bank Limited for the purposes of settling the Consideration should the Disposal be
implemented.
3. RATIONALE FOR THE DISPOSAL
The business of Cognition has been subjected to a vigorous reassessment process following the restructuring of the management team at the end
of December 2021. The existing businesses of FoneWorx and BMI have been refocused and aligned with the identified needs of their respective
customer bases.
At the same time, Private Property has also interrogated its priorities and business imperatives and has resolved to commit greater investment to future
growth prospects and in its long-term business initiatives, serviced by its web-based platform. This will require an allocation of considerable additional
resources in technology and marketing.
In the process of the above review, it has become apparent to the company that its investment in Private Property may benefit from a more industry-
aligned shareholder base which supports the imperatives of growth as opposed to short term returns, and which can accelerate the implementation
of Private Property’s revised strategy. In the circumstances, the offer to acquire Cognition’s shareholding in Private Property represents an opportunity
for the company to return significant value to shareholders.
4. CONDITIONS PRECEDENT TO THE DISPOSAL
The Disposal will be subject to the fulfilment of the following conditions precedent by 31 December 2022, or such later date as the Company and the
TRP may agree to in writing:
4.1 approval of the Disposal by the Shareholders by way of a special resolution, requiring a majority vote of 75%, as contemplated in section 115(2)
of the Act, and:
* to the extent required, the approval and the implementation of such resolution by the court as contemplated in section 115(3)(a) of the Act; and
* if applicable, the Company not treating the aforementioned resolution as a nullity, as contemplated in section 115(5)(b) of the Act;
4.2 Shareholders not having exercised appraisal rights by giving valid demands to this effect to the Company, in terms of section 164(7) of the Act;
4.3 the Expert having prepared and submitted a fair and reasonable opinion to the Independent Board;
4.4 the Independent Board having resolved to recommend acceptance of the Disposal to the Shareholders. and
4.5 the TRP having issued a compliance certificate as required in terms of section 121(b) of the Act.
5. SHAREHOLDINGS, ACTING AS PRINCIPAL AND CONCERT PARTIES
The Purchasers confirm that they presently own no shares in the Company, that they are the ultimate proposed purchasers of the Sale Shares and are
not acting in concert with, or as an agent or broker for, any other party.
6. IRREVOCABLE UNDERTAKING BY CONTROLLING SHAREHOLDER
The Purchasers have been provided with irrevocable undertakings to vote in favour of the resolutions required to implement the Disposal by CTP
Limited and Caxton and CTP Publishers and Printers Limited, who directly and indirectly hold 67% of the issued share capital of the Company.
7. CIRCULAR
The Circular relating to the Disposal, incorporating the terms of the Disposal, the Expert’s report, the notice of the General Meeting required to
implement the Disposal and a form of proxy, was distributed to Shareholders on Friday, 14 October 2022. . The salient dates and times in relation to
the Disposal were published on the date of distribution of the Circular and are also contained in the Circular.
8. WITHDRAWAL OF CONTINUED CAUTIONARY ANNOUNCEMENT
The continued cautionary announcement dated 26 August 2022 is hereby withdrawn.
9. RESPONSIBILITY STATEMENT
The Board and the Independent Board accept responsibility for the information contained in this announcement, and certify that, to the best of
their respective knowledge and belief, the information is true and, where appropriate, this announcement does not omit anything likely to affect the
import of the information included.
By order of the board.
Johannesburg
27 October 2022
Sponsor
AcaciaCap Advisors Proprietary Limited
Auditors and Reporting accountants
BDO
Attorneys
Fluxmans
Independent expert
Exchange Sponsors
Date: 27-10-2022 10:03:00
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