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Joint Announcement of the Firm Intention to make a Mandatory Offer to GPL Shareholders and Withdrawal of Cautionary
GRAND PARADE INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/003548/06)
JSE share code: GPL
ISIN: ZAE000119814
("GPL" or the "Company")
and
GMB LIQUIDITY CORPORATION LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2022/587629/07)
("GMB" or the "Offeror")
JOINT ANNOUNCEMENT OF THE FIRM INTENTION TO MAKE A MANDATORY OFFER TO GPL
SHAREHOLDERS AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Shareholders are advised that GMB Liquidity Corporation Proprietary Limited ("Offeror" or "GMB") has
provided the Company with written notice that the Offeror has acquired additional shares in the Company
which has resulted in the Offeror's total beneficial interest increasing to 35.14% of the Company’s issued
ordinary share capital (net of treasury shares). Accordingly, the Offeror will proceed with a mandatory offer
to all GPL shareholders to acquire their ordinary shares in GPL not already owned by GMB (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 R3.33 per Mandatory Offer Share ("Mandatory
Offer Consideration") ("Mandatory Offer").
The purpose of this joint firm intention announcement ("Firm Intention Announcement") is to advise the
GPL shareholders of the terms and conditions of the Mandatory Offer.
2. RATIONALE FOR THE MANDATORY OFFER
The Offeror believes that GPL will benefit from the support of the Offeror as key shareholder subsequent to
the Mandatory Offer. Furthermore, it is not the current intention of the Offeror to apply for the delisting of
GPL from the Johannesburg Stock Exchange ("JSE").
GPL has communicated to the market its intention to unlock value for all shareholders through a controlled
sale of assets. Over the past 24 months GPL has disposed of its stake in Burger King South Africa, disposed
of smaller investments and properties, closed unprofitable investments, and unbundled its stake in the Spur
Corporation to its shareholders. The remaining assets within GPI consist of minority investments in SunWest
International, the Golden Valley Casino, and SunSlots, a minority investment in Infiniti Gaming Africa and two
investment properties. Aligned with GPL’s stated strategy to unlock value for its shareholders, GPL has
recently commenced a process to potentially sell the shares in GPL and/or its underlying assets as per the
cautionary announcement and its renewal released on SENS on 21 September 2022 and 31 October 2022
respectively. Subsequent to, but independently of, GPL launching this process, GMB acquired its interest in
GPL resulting in the Mandatory Offer. GPL sees the Mandatory Offer as being aligned with GPL’s stated
strategy to unlock value for all GPL shareholders, whilst still allowing GPL shareholders the choice to remain
GPL shareholders or to realise their investment in GPL at the Mandatory Offer Consideration.
The Mandatory Offer Consideration represents a premium of:
- 0.91% to the share price of R3.30 as at 8 November 2022, being the business day prior to the
publication of this Firm Intention Announcement;
- 1.33% to the 5-day volume weighted average price ("VWAP") up to and including 8 November
2022; and
- 1.01% to the 30-day VWAP up to and including 8 November 2022.
3. INFORMATION ABOUT THE OFFEROR
GMB is a wholly owned subsidiary of GMB Investments Proprietary Limited ("GMBI"). Mr Gregory Bortz
serves as the sole director and Chairman of both entities. GMBI is a family office platform established by
Mr Bortz for investing in South Africa. Most recently, GMBI, through its wholly owned subsidiary GMB,
made a financial investment in the horse racing operator in the Western Cape through financing Kenilworth
Racing Proprietary Limited and Mr Bortz has assumed the position of chairperson of that organisation.
GMB is not a related or inter-related person to GPL as contemplated in section 2 of the Companies Act.
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 GPL 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 R3.33 per Mandatory Offer Share held by such Mandatory Offer
Participant after the fulfilment or waiver of the Mandatory Offer Conditions as defined and set out
below.
In terms of regulation 111(2) of the Takeover Regulations, 2011 promulgated under the
Companies Act ("Takeover Regulations"), if an offer is made and the offeror or its concert parties
has acquired relevant securities in the offeree regulated company within the 6 months period
before the commencement of the offer period, the consideration paid, per security, to the minorities
of the same class must be identical to, or where appropriate, similar to the highest consideration
paid, excluding commission, tax and duty, for those acquisitions.
The highest price at which the Offeror acquired GPL Shares within the six-month period before
the commencement of the offer period was R3.33. The Mandatory Offer Consideration per
Mandatory Offer Share will accordingly be R3.33.
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 28 April 2023:
4.3.1.1 all approvals, consents and/or waivers from the applicable South African
regulatory authorities as may be required in order for the Mandatory Offer to be
implemented (other than the issue of the compliance certificate by the TRP as
contemplated in paragraph 4.3.1.2) have been obtained, including, to the extent
required, approval/s of the Competition Commission and/or Competition Tribunal
and the relevant gambling authorities (“Regulatory Authorities”), provided that
if such approvals are granted conditionally, this Mandatory Offer Condition shall
not be regarded as having been fulfilled unless before such date GMB gives
notice to the Company to the effect that such conditions and terms are
acceptable to GMB; and
4.3.1.2 the TRP has issued a compliance certificate in relation to the Mandatory Offer in
terms of section 119(4)(b) of the Companies Act.
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 are not capable of
being waived 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 relevant Regulatory Authorities, to the extent
required; and
4.3.2.2 an announcement will be released on SENS as soon as practicable after all the
Mandatory Offer Conditions have been fulfilled, if the Mandatory Offer
Conditions are not fulfilled timeously, or if the time and/or date for fulfilment of
the Mandatory Offer Conditions is extended.
4.4 Independent Board
GPL has constituted an independent board of directors of GPL ("Independent Board") for the
purposes of the Mandatory Offer, including, evaluating the terms and conditions of the Mandatory
Offer and advising GPL shareholders thereon as required by the Takeover Regulations. The
Independent Board comprises:
• Mark Bowman – Independent Non-Executive Director – Chairman of the Independent Board
• Ronel Van Dijk – Independent Non-Executive Director
• Professor Walter Geach – Independent Non-Executive Director
5. MANDATORY OFFER
On 9 November 2022, the Offeror acquired 722 221 GPL shares, with the result that the Offeror's total
beneficial interest in GPL as at the date of this announcement amounts to 156,297,600 GPL shares, being
35.14% of the issued ordinary shares of GPL (net of Treasury Shares). As such, the Offeror's beneficial
interest in GPL is more than 35% and it is required to make the Mandatory Offer.
6. BENEFICIAL INTEREST IN GPL ORDINARY SHARES
The Offeror has disclosed the following beneficial interests in GPL held by the Offeror and persons related to
the Offeror:
Number of GPL Percentage of GPL shares (net of
Shares Treasury Shares)
Shareholder
35.14 %
GMB Liquidity Corporation 156,297,600
Proprietary Limited
35.14 %
Total 156,297,600
There are no persons acting in concert with the Offeror.
7. INDEPENDENT EXPERT AND FAIR AND REASONABLE OPINION
The Independent Board will appoint an independent expert ("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 RESPONSIBILITY STATEMENT
The Independent Board accepts responsibility for the information contained in this announcement insofar
as it relates to GPL 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 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.
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
GPL and the Offeror have indicated that their current intention is to issue a joint circular to GPL
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. GPL and the Offeror applied to the
TRP to approve an extension of the 20-business day period for the posting of the Circular in terms of
Regulation 102(2)(b). The TRP has granted an extension of 9 business days for the publication of the
Circular. The Circular is expected to be posted on or about 15 December 2022.
12. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
GPL shareholders are advised that, as a result of the publication of this announcement, the cautionary
announcement and its renewal released on SENS on 21 September 2022 and 31 October 2022,
respectively, are hereby withdrawn.
CAPE TOWN
9 November 2022
FINANCIAL ADVISER TO GPL
Rand Merchant Bank, a division of FirstRand Bank Limited
SPONSOR TO GPL
PSG Capital Proprietary Limited
LEGAL ADVISER TO GPL
Clyde & Co LLP
LEGAL ADVISER TO GMB
Solaris Law Proprietary Limited
Date: 09-11-2022 05:12:00
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