Wrap Text
Declaration and finalisation announcement: distribution in specie of EMH n ordinary shares to Remgro shareholders
REMGRO LIMITED
Incorporated in the Republic of South Africa
(Registration number: 1968/006415/06)
ISIN: ZAE000026480
JSE and A2X share code: REM
("Remgro")
DECLARATION AND FINALISATION ANNOUNCEMENT: DISTRIBUTION IN SPECIE OF EMEDIA
HOLDINGS LIMITED ("EMH") N ORDINARY SHARES ("EMH N SHARES") TO REMGRO
SHAREHOLDERS
1. INTRODUCTION
1.1. Holders of listed Remgro no par value ordinary shares and unlisted Remgro no par value B
ordinary shares ("Remgro Shareholders") are referred to the category 1 transaction
announcement by EMH (the "EMH Announcement") and the voluntary announcement released
by Remgro ("Remgro Announcement") respectively on the Stock Exchange News Service
("SENS") of the securities exchange operated by the JSE Limited ("JSE") on 27 June 2025
regarding a series of transactions proposed by EMH affecting Remgro's shareholding in eMedia
Investments Proprietary Limited ("EMI") and EMH ("Proposed Transaction").
1.2. Remgro Shareholders are advised that, pursuant to the terms of the subscription and share
exchange agreement entered into to give effect to the Proposed Transaction ("Transaction
Agreement"), the board of directors of Remgro ("Board") has resolved to proceed with a
distribution of Remgro's shareholding in EMH ("Unbundling Shares") to Remgro Shareholders
("the Remgro Unbundling").
1.3. Accordingly, all conditions precedent to the Proposed Transaction have been fulfilled.
1.4. In terms of the Remgro Unbundling, and following receipt of the Unbundling Shares pursuant to
the implementation of the Transaction Agreement, Remgro will distribute its entire shareholding
of 35.000477% in the issued ordinary shares of EMH, by way of a distribution in specie to Remgro
Shareholders as an unbundling transaction in terms of section 46 of the Income Tax Act, No 58
of 1962 ("ITA").
1.5. The purpose of this announcement is to provide Remgro Shareholders with information regarding
the Remgro Unbundling.
2. RATIONALE
2.1. As outlined in the Remgro Announcement, as an investment holding company, Remgro constantly
assesses the composition of its investment portfolio. It is important to Remgro that its portfolio
composition is shaped by a long-term perspective on shareholder value creation, which includes
considerations around the level of maturity, independence and the size of an investment, relative
to the size of the overall Remgro portfolio, and it is through this lens that the realignment of
Remgro's investment portfolio has been undertaken in recent years.
2.2. Through its direct shareholding in EMI, being the primary asset of EMH, Remgro has enjoyed a
longstanding relationship with EMH and has supported the broader EMH group's strategy to
deliver sustainable shareholder value by developing a market-leading, diversified and
independent television and radio broadcasting platform.
2.3. Remgro is confident in EMH's long-term growth prospects, which are underpinned by a strong
and experienced management team, but believes it would be optimal for EMH, in future, to have
independent and sole control over EMI's long-term strategic direction.
2.4. In this context, Remgro is of the view that the Proposed Transaction will realise greater value for
Remgro Shareholders in relation to the Unbundling Shares, as compared to Remgro either
retaining or disposing of the Unbundling Shares, primarily due to the following:
2.4.1. EMH has for some time experienced notably low levels of free float, negatively impacting
the liquidity of the EMH N Shares and, as a consequence, the traded price of EMH N
Shares. The Proposed Transaction will result in just under 238.5 million newly issued
EMH N Shares being listed on the JSE and distributed to Remgro Shareholders, which is
anticipated to improve the ability of shareholders of EMH to trade in their EMH N Shares
materially and, in turn, potentially deliver improved share price outcomes in respect of
EMH N Shares; and
2.4.2. furthermore, as has previously been communicated to Remgro Shareholders and the
market more broadly, listed Remgro ordinary shares currently trade at a discount to
Remgro's assessment of its intrinsic net asset value per share. By delivering listed EMH
N Shares to Remgro Shareholders via the Remgro Unbundling, Remgro anticipates that
the effect of the implied discount on the fundamental value of EMI will be unlocked,
creating immediate value for Remgro Shareholders.
2.5. Lastly, the Remgro Unbundling will provide improved flexibility for Remgro Shareholders to
evaluate their own position regarding the Unbundling Shares held by them relative to their
individual portfolios, and to give effect to expression of their preferred investment exposures.
3. KEY TERMS OF THE REMGRO UNBUNDLING
3.1. Following implementation of the subscription and share exchange in terms of the Transaction
Agreement (which is anticipated to occur on 12 September 2025), Remgro will hold 238,472,945
EMH N Shares, constituting 35.000477% of the EMH N Shares and EMH ordinary shares in issue.
3.2. Remgro will distribute the 238,472,945 EMH N Shares it holds (the Unbundling Shares) on a pro-
rata basis to all Remgro Shareholders as a distribution in specie.
3.3. Remgro Shareholders will receive 41.96 Unbundling Shares for every 100 ordinary shares
("Remgro Ordinary Shares") and every 100 class B ordinary shares, respectively, in Remgro
(collectively "Remgro Shares") held on the Record Date (as defined in paragraph 10 below). The
transfer of the Unbundling Shares may result in fractional entitlements, which are dealt with in
paragraph 4 below.
3.4. The Remgro Unbundling will result in Remgro Shareholders holding a direct interest in EMH
through the Unbundling Shares, which are listed on the JSE.
3.5. The tax implications of the Remgro Unbundling are set out in paragraph 8 below.
4. FRACTIONAL ENTITLEMENTS, CASH PROCEEDS AND APPLICABLE RATE
4.1. In accordance with the listings requirements of the JSE ("Listings Requirements"), fractional
entitlements of EMH N Shares to which Remgro Shareholders become entitled in terms of the
Remgro Unbundling will be rounded down to the nearest whole Unbundling Share. The
aggregated excess fractions of Unbundling Shares, to which Remgro Shareholders remain
entitled, will be sold in the market, on Remgro Shareholders' behalf, as soon as practicable after
the Remgro Unbundling. The cash proceeds of the sale of the fractional entitlements to
Unbundling Shares ("Cash Proceeds") will be paid to the relevant Remgro Shareholders on the
basis set out below, net of any applicable taxes (such as Securities Transfer Tax ("STT")) and
costs.
4.2. The Cash Proceeds due to Remgro Shareholders will be determined at a 10% discount to the
volume weighted average trading price of EMH N Shares on the JSE on the day on which Remgro
Ordinary Shares will begin to trade 'ex' the entitlement to receive the Unbundling Shares, which
is anticipated to be on 23 September 2025 (but which is subject to change). The actual price used
to calculate the Cash Proceeds will be announced on SENS by 11h00 two business days
thereafter.
4.3. As far as the tax implications of the Cash Proceeds are concerned, the receipt of the Cash
Proceeds by the Remgro Shareholders will be subject to capital gains tax ("CGT") for Remgro
Shareholders holding Remgro Shares as capital assets or to income tax for Remgro Shareholders
holding Remgro Shares as trading stock, as the case may be.
5. TREASURY SHARES
5.1. As at the date of this announcement, Remgro has 5,825,991 treasury shares in issue, held by
Industrial Partnership Investments Proprietary Limited (the "Treasury Company").
5.2. Any EMH N Shares received by the Treasury Company in terms of the Remgro Unbundling will,
following the Remgro Unbundling, be sold in the market at the best price that can reasonably be
obtained at the time of sale.
6. INFORMATION RELATING TO EMH
6.1. EMH is a media investment holding company, incorporated in South Africa and listed on the JSE
under the media sector.
6.2. EMH's media assets are housed in EMI which, following implementation of the share exchange
referenced in the Remgro Announcement, is a wholly owned subsidiary of EMH.
6.3. EMI is a South African-based media group which holds core assets in the television and radio
broadcasting sector as well as additional investments in content, properties and facilities.
6.4. Through focused and ethical management of its assets, EMH strives to create long-term value for
all stakeholders through the broadcast of local and international entertainment programming, as
well as news and information programming. A multichannel and multi-platform strategy enables
EMH to provide valuable advertising opportunities for marketers.
6.5. For further detailed information on EMH, Remgro Shareholders are referred to the annual report
of EMH for the financial year ended 31 March 2025, which can be accessed on EMH's website
(https://emediaholdings.co.za/).
7. EXCHANGE CONTROL REGULATION
The Unbundling Shares are not freely transferable from the common monetary area and must be
dealt with in terms of the South African Exchange Control Regulations, 1961 (as amended)
("Exchange Control Regulations"). The following summary of the Exchange Control
Regulations is intended as a guide only and is not a comprehensive statement of the Exchange
Control Regulations or advice. Remgro Shareholders who are in any doubt regarding the
Exchange Control Regulations should contact their own professional advisers. This summary is
based on the laws and regulations as in force and as applied in practice as at the date of this
announcement and is subject to change.
7.1. Emigrants from the Common Monetary Area, consisting of the Republic of South Africa,
the Republic of Namibia and the Kingdoms of Lesotho and eSwatini ("CMA"):
7.1.1. Any share certificates that may be issued by EMH to emigrants from the CMA will be
endorsed "non-resident" in accordance with the Exchange Control Regulations.
7.1.2. Uncertificated Unbundling Shares will be credited directly to the emigrants' respective
emigrant share accounts at the Central Securities Depository Participant ("CSDP") or
broker controlling their remaining portfolios, and an appropriate electronic entry will be
made in the relevant register reflecting a "non-resident" endorsement. The CSDP or
broker will ensure that the emigrant adheres to the Exchange Control Regulations.
7.1.3. Any Unbundling Shares issued in certificated form, cash dividends and residual cash
payments (including Cash Proceeds) based on emigrants' Unbundling Shares controlled
in terms of the Exchange Control Regulations will be forwarded to the authorised dealer
in foreign exchange controlling their remaining assets.
7.2. Residents outside of the CMA:
7.2.1. Any share certificates that may be issued by EMH to non-residents of the CMA will be
endorsed "non-resident" in accordance with the Exchange Control Regulations.
7.2.2. Uncertificated Unbundling Shares will be credited directly to the non-resident share
accounts at the CSDP or broker controlling their portfolios, and an appropriate electronic
entry will be made in the relevant register reflecting a "non-resident" endorsement. The
CSDP or broker will ensure that the non-resident adheres to the Exchange Control
Regulations.
7.2.3. Any Cash Proceeds payable to non-resident Remgro Shareholders in relation to their
fractional entitlements are freely transferable from South Africa.
8. TAXATION
8.1. The following summary describes the likely South African tax consequences of the Remgro
Unbundling that may apply to Remgro Shareholders generally. This summary is based on the
laws as in force and as applied in practice as at the date hereof and is subject to changes to those
laws and practices subsequent to such date. This summary is merely a guide and every Remgro
Shareholder must avail himself/herself/itself of his/her/its tax consequences, as the final tax
consequences will be solely dependent on each Remgro Shareholder's individual circumstances.
8.2. In the case of persons who are non-residents of South Africa for tax purposes, this summary
should be read in conjunction with the provisions of any applicable double tax agreement between
South Africa and their country of residence and a consideration of the in country tax legislation of
each non-resident Remgro Shareholder.
8.3. Remgro and its advisers cannot be held responsible for the taxation consequences that the
Remgro Unbundling may have on individual Remgro Shareholders and, therefore, if you are in
any doubt about your tax position, you should consult an appropriate independent professional
adviser.
8.4. The Remgro Unbundling will constitute a disposal by Remgro of the Unbundling Shares to
Remgro Shareholders. The disposal will be implemented in terms of section 46 of the ITA, which
provides dividends tax and STT relief as well as roll-over relief from an income tax (including
CGT) perspective, provided the Unbundling Shares are not distributed to a "disqualified person"
as envisaged in section 46(7)(a) of the ITA. This relief includes the following:
8.4.1. the Unbundling Shares will be distributed as a distribution in specie that must be
disregarded for dividends tax purposes. To the extent that the Unbundling Shares are
distributed to a "disqualified person" envisaged in section 46(7)(a) of the ITA, Remgro will
be liable for the dividends tax, unless exempt;
8.4.2. the distribution will not constitute a "return of capital" for the purposes of paragraph 76B
of the Eighth Schedule to the ITA; and
8.4.3. Remgro Shareholders (excluding a Remgro Shareholder that is a "disqualified person")
will be deemed to have acquired the Unbundling Shares on the date on which the Remgro
Shares were originally acquired (other than for purposes of determining whether the
Unbundled EMH Shares were held for at least three years for purposes of section 9C(2)
of the ITA).
REMGRO SHAREHOLDERS – NOT DISQUALIFIED PERSONS
8.4.4. Remgro Shares held as trading stock:
8.4.4.1. Remgro Shareholders holding Remgro Shares as trading stock will be deemed
to acquire the Unbundling Shares as trading stock; and
8.4.4.2. The original expenditure incurred by the Remgro Shareholder in respect of the
Remgro Shares will be apportioned between the Unbundling Shares and the
Remgro Shares, based on a ratio that is determined with reference to the
respective closing prices of the shares in EMH and Remgro on the first business
day after the LDT Date (as defined in paragraph 10 below). An announcement
will be made in this regard to inform Remgro Shareholders what apportionment
ratio to apply.
8.4.5. Remgro Shares held as capital assets:
8.4.5.1. Remgro Shareholders holding Remgro Shares as capital assets will be deemed
to acquire the Unbundling Shares as capital assets; and
8.4.5.2. the CGT 'base cost' of the Remgro Shares in the hands of Remgro
Shareholders will be apportioned between the Unbundling Shares and the
Remgro Shares, based on a ratio that is determined with reference to the
respective closing prices of the shares in EMH and Remgro on the first business
day after the LDT Date (as defined in paragraph 10 below).
8.4.6. Apportionment ratios to be used
8.4.6.1. Remgro will advise Remgro Shareholders of the relevant apportionment ratios
to be used to determine their cost/base cost in the Remgro Shares and the
Unbundling Shares by way of an announcement to be released on SENS on
the second business day after the LDT Date (as defined in paragraph 10 below).
8.4.6.2. These ratios must be used in the determination of any income or capital gains
or losses (as the case may be), derived from any future disposals of the
Unbundling Shares or Remgro Shares.
8.4.7. Increase in expenditure per share as a result of the tax paid on distributions to
disqualified persons
8.4.7.1. In addition to the above apportionment, the expenditure incurred in relation to
the Unbundling Shares must be increased by the amount of tax paid by Remgro
in respect of distributions made to 'disqualified persons', as defined in section
46(7) of the ITA, who hold at least 5% of the total issued 'equity shares', as
defined in section 1 of the ITA, in Remgro.
8.4.7.2. Remgro will only be able to establish the exact amount of tax payable on the
disqualified person shareholding in due course, subject to inter alia, the
determination of the extent and nature of disqualified person shareholding as
at the Record Date (as defined herein).
8.4.7.3. Remgro will advise Remgro Shareholders of the exact amount of the increased
tax cost / base cost per Unbundling Share in due course.
REMGRO SHAREHOLDERS – DISQUALIFIED PERSONS
8.4.8. To the extent that Remgro makes any distribution to a "disqualified person", Remgro will be
subject to CGT and/or dividends withholding tax in respect of those shares that are unbundled. It
is noted that Remgro holds all of the Unbundling Shares on capital account and that it will thus
be subject to CGT and not income tax on the disposal of any unbundled shares to a disqualified
person.
8.4.9. Section 46(7) of the ITA provides that the rollover relief afforded in terms of section 46 of the ITA
does not apply in respect of an equity share that is distributed by Remgro to any Remgro
Shareholder that:
8.4.9.1. is a disqualified person; and
8.4.9.2. holds at least five percent of the equity shares in Remgro immediately before the
Remgro Unbundling.
8.4.10. As at the date hereof, the Public Investment Corporation SOC Limited ("PIC"), representing the
Government Employees Pension Fund, is the only disqualified person holding approximately 12.6
percent in the net issued share capital of Remgro. Given the fact that the market value of the
Unbundling Shares exceeds the base cost thereof to Remgro, Remgro will realise a capital gain
on the difference between the market value of the Unbundling Shares and such base cost. For all
practical purposes Remgro will thus be liable for CGT calculated as the difference between the
market value of the Unbundling Shares less the base cost thereof multiplied by 12.6 percent (as
at the date of this announcement). This taxable capital gain will be included in Remgro's taxable
income at an inclusion rate of 80 percent and thus results in estimated tax in Remgro's hands.
8.4.11. As indicated above, the amount of CGT for which Remgro is liable in respect of distributions to
"disqualified persons", will result in amongst others the base cost of the Unbundling Shares being
increased by the tax payable by Remgro in the same ratio as the number of equity shares held
by a Remgro Shareholder in EMH bears to the number of all the equity issued shares in EMH
immediately after the Remgro Unbundling.
9. FOREIGN SHAREHOLDERS
9.1. The following summary describes the restrictions applicable to Remgro Shareholders in terms of
the Remgro Unbundling who have registered addresses outside South Africa and/or who are
nationals, citizens or residents of countries other than South Africa ("Foreign Shareholders") or
who are persons (including, without limitation, custodians, nominees and trustees) who have a
contractual or legal obligation to forward this announcement to a jurisdiction outside South Africa,
or who hold Remgro Shares for the account or benefit of any such Foreign Shareholder and will
therefore hold Unbundling Shares in a similar manner and may, therefore, have an impact on
Remgro Shareholders.
9.2. The Remgro Unbundling will be implemented as a pro rata distribution in specie for no
consideration to all Remgro Shareholders recorded as such in the register of Remgro on the
Record Date (as defined in paragraph 10 below).
9.3. It is the responsibility of any Foreign Shareholder (including, without limitation, nominees, agents
and trustees for such persons) being notified by this announcement of the Remgro Unbundling
and wishing to have their Unbundling Shares transferred to them in terms of the Remgro
Unbundling to satisfy themselves in respect of the applicable laws in their territory, including
obtaining any requisite governmental or other consents, observing any other requisite laws,
requirements or formalities and paying any issue, transfer or other taxes due in such territories.
9.4. Accordingly, persons (including, without limitation, nominees, agents and trustees) being notified
in terms of this announcement should not distribute or send the announcement to any person in,
or citizen or resident of, or otherwise into any jurisdiction where to do so would or might
contravene applicable law or regulation, including local securities laws or regulations. Any person
who does distribute this announcement into any such territory (whether under a contractual or
legal obligation or otherwise) should draw the recipient's attention to the contents of this
paragraph.
9.5. Remgro reserves the right, but shall not be obliged, to treat as invalid any transfer of Unbundling
Shares in terms of the Remgro Unbundling, which appears to Remgro or its agents to have been
executed, effected or dispatched in a manner which may involve a breach of the securities laws
or regulations of any jurisdiction; or if Remgro or its agents believe (in their discretion) that the
same may violate applicable legal or regulatory requirements; or if Remgro or its agents believe
(in their discretion) that it is prohibited or unduly onerous or impractical to transfer the Unbundling
Shares to such Foreign Shareholder in terms of the Remgro Unbundling.
9.6. If a Foreign Shareholder is of the view that the transfer of the Unbundling Shares in terms of the
Remgro Unbundling to such Foreign Shareholder may involve a breach of the securities laws or
regulations or violate applicable legal or regulatory requirements, such Foreign Shareholder must,
as soon as reasonably practicable, notify their CSDP or broker of such fact or circumstance.
9.7. Remgro shall be entitled (in its discretion), including in either of the aforementioned instances, to
do all things necessary or desirable to ensure compliance with applicable law and/or regulation,
including (without limitation) selling the Unbundling Shares that would otherwise have been
transferred to the Foreign Shareholder in terms of the Remgro Unbundling on behalf of the
Foreign Shareholder and at their risk, with the net proceeds of such sale (after deduction of any
applicable taxes which may, in this instance, include STT, withholdings or costs) to be paid to the
Foreign Shareholder. In this regard, the Unbundling Shares may be aggregated and disposed of
on market on the JSE in an orderly manner by Remgro's transfer secretaries on behalf of and for
the benefit of such Foreign Shareholders as soon as is reasonably practical after the
implementation of the Remgro Unbundling at the best price that can reasonably be obtained at
the time of sale.
10. SALIENT DATES AND TIMES IN RELATION TO THE REMGRO UNBUNDLING
2025
Distribution announcement released on SENS Monday, 8 September
Last day to trade in Remgro Ordinary Shares on the JSE to participate in the Monday, 22 September
Remgro Unbundling ("LDT Date")
Remgro Ordinary Shares trade "ex" entitlement to receive the Unbundling Tuesday, 23 September
Shares
Announcement of specified ratio in respect of apportionment of costs/base Thursday, 25 September
costs of Remgro for taxation/CGT purposes released on SENS, by 11h00
Announcement of Cash Proceeds in respect of the fractions released on Thursday, 25 September
SENS, by 11h00
Record date to receive Unbundling Shares in terms of the Remgro Friday, 26 September
Unbundling ("Record Date")
Announcement in respect of the closing EMH N Share price after market Friday, 26 September
closes
Remgro unbundles the Unbundling Shares to Remgro Shareholders Monday, 29 September
Remgro Shareholder's account with CSDP or broker updated Monday, 29 September
Notes:
1. Remgro Shareholders should note that as transactions are settled in the electronic settlement
system used by Strate, settlement of trades takes place three business days after such trade.
2. Share certificates may not be dematerialised or re-materialised between Tuesday,
23 September 2025 and Friday, 26 September 2025, both days inclusive.
3. All times indicated above are in South African Standard Time.
By order of the board of directors of Remgro
Stellenbosch
8 September 2025
Financial Adviser and Sponsor to Remgro
Rand Merchant Bank, a division of FirstRand Bank Limited
Legal Adviser to Remgro
DLA Piper Advisory Services Proprietary Limited
Important Information
The Unbundling Shares may not be offered or sold in, or transferred to, the United States of America,
absent registration under, or an exemption from, the registration requirements of the U.S. Securities
Act of 1933, as amended (the "Securities Act"). The Unbundling Shares which constitute the
distribution in specie by Remgro have not been, and will not be, registered in the United States of
America under the Securities Act. The distribution in specie has not been approved or rejected by the
U.S. Securities and Exchange Commission (the "SEC") or any other commission of a State of the
United States of America, and neither these commissions nor the SEC have reviewed the accuracy or
adequacy of this announcement. Any representation to the contrary may be considered a criminal
offense in the United States of America.
Date: 08-09-2025 05:35:00
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