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Firm Intention Announcement regarding Offer and Delisting
JASCO ELECTRONICS HOLDINGS LIMITED
Incorporated in the Republic of South Africa
Registration Number 1987/003293/06
Share code: JSC ISIN: ZAE000003794
(“Jasco” or “the company” or “the group”)
FIRM INTENTION ANNOUNCEMENT REGARDING GENERAL OFFER AND
DELISTING
1. Introduction
Jasco shareholders are referred to the cautionary announcement
released on SENS on 5 December 2022 and renewed on 19 January
2023 and 2 March 2023, which advised that the company had entered
into discussions with its major shareholder Community Investment
Holdings Proprietary Limited (“CIH”) with regards to its
intention to make a general offer (“Offer”), as contemplated in
section 117(c)(v) of the Companies Act, 2008 (as amended), to
the holders of Jasco ordinary shares (“Jasco Shareholders”) and
to consequently terminate the listing of the company’s ordinary
shares on the JSE (the “Delisting”).
CIH, through Community Holdings No 1 Proprietary Limited (a
wholly owned subsidiary of CIH) (the “Offeror”) proposes the
Offer in terms of section 117(1)(c)(v) of the Companies Act 71
of 2008 (the "Companies Act"), read with Chapter 5 of the
Companies Regulations promulgated under the Companies Act (the
"Takeover Regulations").
The Offeror will offer to purchase all of the issued Jasco
ordinary shares for a consideration (“Offer Consideration”)
equivalent to 16 cents per Jasco ordinary share.
This announcement constitutes a firm intention announcement in
terms of regulation 101 of the Takeover Regulations.
2.Appointment of the Jasco Independent Board
Jasco has appointed PF Radebe, DH du Plessis, MSC Bawa and T
Zondi (together, the “Independent Board”) to fulfil the role of
an independent board in terms of the Takeover Regulations.
The Jasco Independent Board has appointed BDO Corporate Finance
as the independent expert ("Independent Expert"), as required in
terms of Section 114(2) of the Companies Act and the Companies
Regulations, to issue a report dealing with the matters set out
in Sections 114(2) and 114(3) of the Companies Act and
Regulations 90 and 110 of the Companies Regulations and in
accordance with Paragraph 1.15(d) as read with Schedule 5 of the
JSE Listings Requirements, in respect of its opinion on whether
the terms and conditions of the Offer and Delisting are fair and
reasonable to Shareholders ("Independent Expert Report").
As at the date of this announcement, the Jasco Board has not
received any other firm intention letter, other than the Offer
from the Offeror as set out in this announcement.
The Independent Expert Report and recommendations of the Jasco
Independent Board and Jaco Board will be included in the Circular
to be posted as set out in paragraph 7 of this announcement.
3.Terms and conditions of the Offer
3.1 The Offer and Offer Consideration
3.1.1 The Offeror hereby offers, in terms of section
117(1)(c)(v) of the Companies Act, to acquire from
the Jasco Shareholders all the Offer Shares, being
a maximum of 155 430 311 Jasco Shares, in respect of
which it receives valid acceptances prior to the
offer closing date for the Offer Consideration.
3.1.2 The Offer Consideration is a cash consideration of
16 cents per Jasco Share acquired in terms of the
Offer, being a maximum of R24 868 853.
3.1.3 In the Offeror’s view, the Offer Consideration is
compelling as (i) the Jasco Shares are thinly traded,
(ii) the Offer Consideration represents a 14%
premium to the closing price on the date preceding
the cautionary announcement dated 5 December 2022
and a 4% premium to the 30-day volume weighted
average price on the date preceding the cautionary
announcement. (iii) represents a premium in excess
of 100% against the audited tangible net asset value
per share of 1.2 cents, published for the year ended
30 June 2022. The audited net asset value per share
at 30 June 2022 was 16.7 cents per share.
3.1.4 The Offer Consideration shall be settled in full, 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 Offer
Participant.
3.1.5 The tax implications of the Offer are dependent upon
the individual circumstances of the Offer
Participants concerned and the tax jurisdiction
applicable to such Offer Participants.
3.1.6 It is recommended that the Offer Participants seek
appropriate professional advice in this regard.
3.2 The Delisting
3.2.1 The Offer is subject to, inter alia, the condition
that the Delisting of Jasco’s Shares from the JSE
pursuant to the voluntary delisting provisions of
the JSE Listings Requirements is approved by the
requisite majority Jasco Shareholders at the General
Meeting to be convened (“Delisting Resolution”) and
the JSE (the “Delisting Condition”).
3.2.2 The Delisting will occur pursuant to the Delisting
Resolution being approved and the Offer being
implemented.
3.2.3 The effect of the Delisting will be that all Jasco’s
ordinary shares will be removed from the list of
securities admitted to trading by the JSE.
3.3 Conditions Precedent
The Offer and its implementation are subject to the
fulfilment of the following Conditions Precedent:
3.3.1 the Delisting of Jasco’s Shares from the JSE
pursuant to the voluntary delisting provisions of
the JSE Listings Requirements is approved by the
JSE and Jasco Shareholders;
3.3.2 all approvals, consents and/or waiver from the
applicable South African regulatory authorities as
may be required in order for the Offer to be
implemented (other than the issue of the compliance
certificate by the TRP) have been obtained,
including, to the extent required, approval/s of
the exchange control authorities of the SARB,
provided that if such approval is granted
conditionally, this Condition Precedent shall not
be regarded as having been fulfilled unless before
such date The Offeror gives notice to Jasco to the
effect that such conditions and terms are
acceptable to the Offeror (in its discretion); and
3.3.3 the TRP issues a compliance certificate in relation
to the Offer in terms of section 119(4)(b) of the
Companies Act.
The Offer is not subject to any minimum acceptance
threshold being achieved.
4.Rationale for the Offer and Delisting
4.1 CIH and its associated entities currently hold 55.36% of
Jasco’s Ordinary Shares, a further 13.61% are held by
Goldsol II Proprietary Limited and 6.38% by TMM Holdings
Proprietary Limited, resulting in a low free float and a
Shareholder profile consisting of a substantial number of
small Shareholders.
4.2 As a result, Jasco’s shares trade in small volumes with
minimal liquidity and no premium to its peers. In this
context, the Jasco Board has resolved that Jasco can no
longer justify the costs and associated administrative
burden of a JSE listing when considered relative to the
benefit of an ongoing listing. From a Shareholder
perspective, the costs associated with Jasco being listed
outweigh the benefit of being able to publicly trade in
Jasco Shares.
4.3 The Delisting will also enable management of the Company
to dedicate more time and resources to the Company’s
business operations without having to dedicate
considerable time, expenses and resources to the
regulatory processes associated with being a listed
entity.
4.4 The Offer will provide Shareholders with an opportunity to
realise their investment in Jasco by facilitating an exit
for them from a relatively illiquid share.
4.5 The Offer Consideration of 16 cents per Jasco ordinary
share represents a 14% premium to the closing price on the
date preceding the Cautionary Announcement dated 5
December 2022 and a 4% premium to the 30-day volume
weighted average price on the date preceding the Cautionary
Announcement.
4.6 The audited net asset value per share at 30 June 2022 is
16.7 cents per share and tangible net asset value of 1.2
cents per share.
5. Cash Confirmation
The Offeror has delivered an irrevocable unconditional
guarantee to the Takeover Regulation Panel in accordance with
regulations 111(4) and 111(5) of the Takeover Regulations and
in favour of Jasco shareholders for the sole purpose of fully
satisfying the Offeror's cash commitments in respect of the
Offer.
6. Beneficial interest in Jasco of the Offeror, persons related
to the Offeror and/or persons acting in concert with the
Offeror
6.1 At the date of this announcement, CIH owns a total of 203
348 677 (55.34%) Jasco Shares, through the below associated
group entities:
6.1.1 Community Holdings No 1 Proprietary Limited a wholly
owned subsidiary of CIH), which owns 84 285 982
(22.94%) Jasco Shares, who will act as the Offeror
company;
6.1.2 Golden Pond Trading 175 Proprietary Limited an
associated company of CIH, which owns 73 836 471
(20.09%) Jasco Shares;
6.1.3 Pond Technologies Proprietary Limited (previously
CIH Projects No 8 Proprietary Limited) an associated
company of CIH, which owns 44 263 793 (12.05%) Jasco
Shares;
6.1.4 Inkonkoni Investment Holding Trust , a preference
shareholder of CIH which owns 594 250 (0.16%) Jasco
Shares; and
6.1.5 Parmtro Investments No 76 Proprietary Limited of
which Dr ATM Mokgokong is the sole shareholder, which
owns 368 181 (0.10%) Jasco Shares.
Dr ATM Mokgokong and MJ Madungandaba (the chairperson and
deputy chairperson of Jasco’s board of directors)are also
the sole directors of CIH and have direct or indirect
interests in the CIH associated entities listed above.
Dr ATM Mokgokong and MJ Madungandaba and its associated
entities listed above are presumed to be acting in concert
with the Offeror and each other, in terms of regulation 84
of the Takeover Regulations for the purposes of the Offer
and are therefore excluded from the Offer and from voting
on the Delisting Resolution.
Dr N Munisi (non-executive director of Jasco), as a
shareholder of Golden Pond Trading 175 Proprietary Limited
and AMF (Pete) Da Silva who serves on the Jasco board as
an alternate director for MJ Madungandaba are also presumed
to be acting in concert with the Offeror and are therefore
excluded from the Offer and from voting on the Delisting
Resolution.
6.2 Statement of direct and indirect beneficial interest in
securities of Jasco directors
As at the date of this announcement, the Jasco directors
and their associates (as defined in terms of the Listings
Requirements), including directors who have resigned in
the last 18 months, had the following direct and indirect
beneficial interest in the share capital of the Company:
Director Direct beneficial Indirect Beneficial Total Total
%
Current % Current %
MSC Bawa 50,509 0.01 6,758,171 1.84 6,808,680 1.85
AMF da Silva 1 1,070,500 0.29 - 1,070,500 0.29
WA Prinsloo 25,000 0.01 2,649,296 0.72 2,674,296 0.73
MJ Madungandaba 3 - - 103,111,356 28.06 103,111,356 28.06
Dr ATM Mokgokong 3 368,181 0.10 51,884,957 14.12 52,253,138 14.22
Dr N Munisi 4 - - 2,399,209 0.65 2,399,209 0.65
Total 2,181,290 0.59 166,802,989 45.40 168,317,179 45.81
Notes:
1. Mr AMF (Pete) da Silva acted as a non-executive director, until 15 July
2019, when his status changed to alternate non-executive director to
Mr JM Madungandaba.
2. No share options were issued during the year ended 30 June 2021, nor
between 30 June 2021 to the date of this announcement.
3. MJ Madungandaba and Dr ATM Mokgokong are directors of CIH and the
Offeror and as such is excluded from receiving the Offer and from voting
on the Delisting Resolution.
4. Dr N Munisi was appointed as a non-executive director with effect from
1 July 2022.
6.3 As at the date of this announcement, Jasco held no CIH
securities.
6.4 During the last 12 months, there has been no resignations
of Jasco Directors holding direct and indirect beneficial
interest in Jasco.
6.5 No Jasco director had any dealings in Shares during the
six-month period prior to the last practicable date.
6.6 Neither the Company, nor any Director, have dealt for
value in the Shares or any other securities of CIH during
the period beginning six months before the Offer Period
and ending on the last practicable date.
6.7 CIH’s interest in Jasco Shares
The interest of CIH and its director’s interest in Jasco
Shares is disclosed in paragraphs 6.1 and 6.2 above.
Pursuant to the Offer becoming unconditional, the Offeror
will become the beneficial owner of the number of Offer
Shares sold pursuant to the acceptance of the Offer.
6.8 CIH’s dealings in Jasco Shares
No dealings in Jasco Shares were conducted by CIH or CIH
directors during the period beginning six months prior to
the date of this announcement.
7. Offer Circular
Jasco and the Offeror will issue a combined offer circular
setting out the full terms and conditions of the Offer and
Delisting including the notice convening the General Meeting
to consider the required resolutions ("Circular"). The
Circular will be distributed on or about 23 March 2023, once
all the relevant regulatory approvals have been obtained. A
further announcement relating to the posting of the Circular
and notice of the General Meeting, further important details
related to the Offer and Delisting and the salient dates and
times will be published on SENS in due course.
8. Withdrawal of Cautionary Announcement
Jasco Shareholders are advised that as a result of the
publication of this firm intention announcement, the
Cautionary Announcement released on SENS dated 5 December
2022 and renewed on 19 January 2022 and 2 March 2023 are
accordingly withdrawn and Shareholders are no longer required
to exercise caution when dealing in Jasco's securities.
9. Jasco Independent Board and Jasco Board Responsibility
Statement
The Independent Board and the Jasco Board, individually and
collectively accept full responsibility for the accuracy of
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
importance of the information included.
10.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 Offer. To the best of its 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.
6 March 2023
Corporate Advisor and Transaction Sponsor: Grindrod Bank Limited
Date: 06-03-2023 10:30:00
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