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MSS/MMP - Merchant and Industrial Properties Limited/Marshall Monteagle Plc -
Announcement of firm intention by Marshall to make an offer to acquire the
entire issued share capital of Merchant not held by Marshall
MERCHANT AND INDUSTRIAL PROPERTIES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1987/002656/06)
Share code: MSS
ISIN number: ZAE000066684
("Merchant")
MARSHALL MONTEAGLE PLC
(Incorporated in Jersey)
(Registration No. 102785)
Share code: MMP
ISIN: JE00B5N88T08
("Marshall")
ANNOUNCEMENT OF FIRM INTENTION BY MARSHALL TO MAKE AN OFFER TO ACQUIRE THE
ENTIRE ISSUED SHARE CAPITAL OF MERCHANT NOT HELD BY MARSHALL
1. INTRODUCTION
1.1. Merchant and Marshall are pleased to announce that, Marshall has
submitted to the board of directors of Merchant ("the Merchant board")
notice of its firm intention to make an offer to the shareholders of
Merchant, other than Marshall ("Merchant shareholders") to acquire 100%
of their shareholdings in Merchant, subject to the conditions set out in
paragraph 10 below ("the offer").
1.2. The purpose of this announcement is to provide the Merchant shareholders
with the salient terms of the offer.
1.3. The fully diluted issued share capital of Merchant comprises 17,372,300
ordinary shares held by Merchant ordinary shareholders ("the ordinary
shareholders") of which Marshall holds 16,444,902 (constituting 94.66%).
1.4. Based on 927,398 ordinary shares held by the Merchant shareholders ("the
scheme shares") as at the date of this announcement, the Merchant shares
will be acquired in terms of the offer for a cash purchase consideration
of 705 cents per ordinary share ("the scheme consideration"), which is
equivalent to an aggregate cash price of R6,538,156.
1.5. The offer will be implemented by way of a scheme of arrangement ("the
scheme") in terms of section 114 of the Companies Act, 2008 (Act 71 of
2008) as amended ("the Companies Act"), to be proposed by the Merchant
board between Merchant and the Merchant shareholders registered as such
on the record date determined by the Merchant board (being the date on
which Merchant shareholders must be recorded in the share register of
Merchant in order to participate in the scheme and receive the scheme
consideration) ("scheme consideration record date").
1.6. If the scheme is not approved at the meeting of Merchant shareholders to
be convened to consider and, if thought fit, to approve the scheme ("the
scheme meeting"), or if so approved, its completion does not occur by 31
August 2011, or such later date as may be agreed in writing between
Merchant and Marshall ("long stop date"), then Marshall will remain as
the controlling shareholder of Merchant and Merchant will not become a
wholly owned subsidiary of Marshall and the listing of Merchant on the
JSE Limited ("JSE") will be not be terminated.
1.7. Upon successful implementation of the offer :
1.7.1. Merchant will become a wholly owned subsidiary of Marshall; and
1.7.2. the listing of Merchant on the JSE will be terminated.
1.8. The operative date of the scheme is expected to be during the third
quarter of 2011.
2. RATIONALE
2.1. Merchant, which was listed on the JSE in 1987, is controlled by Marshall
as Marshall owns 94.66% of the issued share capital of Merchant.
2.2. The Directors of Marshall believe that the constituting of Merchant as a
wholly-owned subsidiary of Marshall will allow the combined group to have
greater potential for capital growth than either company would have
likely achieved on a stand-alone basis. The diverse nature of the
combined group and its quality assets will continue to provide stable
cash flows and increased dividends for shareholders. Improved market
awareness of the enlarged company should provide better support for the
shares and increase their marketability.
3. SCHEME MEETING
3.1. The scheme meeting will be convened by the Merchant board at which
Merchant shareholders will be required to consider and, if thought fit,
approve the scheme.
3.2. In terms of Section 115 of the Companies Act, the scheme must be approved
by a special resolution adopted by a majority of at least 75% of the
voting rights exercised by the Merchant shareholders at the scheme
meeting, either in person or by proxy, representing in aggregate at least
25% of all the voting rights entitled to be exercised at the scheme
meeting.
4. MERCHANT SHAREHOLDER SUPPORT
Marshall has obtained irrevocable undertakings from Merchant shareholders
representing approximately 71.3% of the Merchant shares, to vote in
favour of the scheme.
5. CONFIRMATION OF FINANCIAL RESOURCES
First National Bank has provided guarantees in accordance with the
Takeover Regulations promulgated in terms of the Companies Act ("the
Takeover Regulations") that Marshall has sufficient funds available to
pay the full scheme consideration to the scheme participants if the
scheme becomes operative.
6. EXISTING HOLDINGS OF SECURITIES IN MERCHANT
At the date of this announcement, Marshall owned and controlled
16,444,902 ordinary shares in Merchant which constitutes 94.66% of the
issued share capital of Merchant.
7. CONDITIONS PRECEDENT
7.1. The offer and the scheme are subject to the fulfilment, or if
appropriate, waiver of the following conditions precedent ("the
conditions"). The conditions (except for those relating to competition
commission/tribunal approval) must be fulfilled, or where appropriate
waived, by not later than the long stop date:
7.1.1. the unconditional approval of the scheme by the relevant Competition
Authorities in South Africa, if required;
7.1.2 the unconditional approval of the scheme) by the JSE;
7.1.3 the unconditional approval of the scheme by the Takeover Regulation
Panel established in terms of the Companies Act ("the Panel");
7.1.4 the issue by the Panel of a compliance certificate in respect of the
scheme;
7.1.5 any other regulatory approvals as may be necessary to give effect to
the scheme, including, without limitation, such approvals as may be
required from the South African Reserve Bank (which approvals shall
be unconditional or on such conditions as may be acceptable to
Marshall or Merchant, whichever of them is affected thereby);
7.1.6 the scheme having been approved by special resolution at the scheme
meeting ("the special resolution");
7.1.7 to the extent required, the High Court of South Africa having
approved the implementation of the special resolution;
7.1.8 if applicable, Merchant not having treated the special resolution as
a nullity as contemplated in section 115(5)(b) of the Companies Act;
and
7.1.9 no Merchant shareholder having exercised appraisal rights in terms
of section 164 of the Companies Act in respect of the special
resolution.
8. OPINIONS AND RECOMMENDATIONS
8.1. In terms of the Takeover Regulations, the independent board of Merchant
as required in terms of the Takeover Regulations is required to obtain
appropriate external advice as to how the offer will affect Merchant
shareholders, and the substance of such advice must be made known to
Merchant shareholders.
8.2. The independent board has appointed PKF Corporate Finance ("PKF") as the
independent expert to advise the independent board as to the fairness and
reasonableness of the terms of the offer in terms of the Takeover
Regulations.
8.3. PKF`s full report as well as the recommendation of the independent board
to Merchant shareholders will be included in the scheme circular to be
sent to Merchant shareholders in relation to the offer.
9. SALIENT DATES AND TIMES AND DOCUMENTATION
9.1. Further announcements, containing such further information as may be
relevant, including the salient dates and times of the scheme, will be
made by Merchant in due course.
9.2. A scheme circular, providing further information on the offer, and
containing, inter alia, a notice of scheme meeting, a form of proxy for
the scheme meeting and a form of surrender and transfer, will be posted
to Merchant shareholders in due course but in any event within 20
business days following the publication of this announcement or such
longer period as may be allowed by the Executive Director of the Panel.
10. MARSHALL AND THE INDEPENDENT BOARD:
10.1. accept responsibility for the information contained in this
announcement;
10.2. confirm that to the best of their respective knowledge and belief,
the information contained in this announcement is true; and
10.3. confirm that this announcement does not omit anything likely to
affect the importance of the information contained in this
announcement.
23 May 2011
La Lucia
Corporate Advisor and Sponsor to Merchant
Sasfin Capital
A division of Sasfin Bank Limited
Corporate Law Advisors to Marshall
Taback and Associates (Pty) Limited
Independent Expert to the Independent Board
PKF
Sponsor to Marshall
Sasfin Capital
A division of Sasfin Bank Limited
Date: 23/05/2011 14:30:04 Supplied by www.sharenet.co.za
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