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FIRM INTENTION TO MAKE AN OFFER TO ACQUIRE THOSE SHARES IN THE CAPITAL OF IQUAD NOT ALREADY HELD BY SASFIN
IQuad Group Limited
Incorporated in the Republic of South Africa
(Registration Number 2004/025177/06)
Share Code: IQG ISIN: ZAE000101622
("IQuad" or "the company")
Sasfin Holdings Limited
(Incorporated In the Republic Of South Africa)
(Registration Number 1987/002097/06)
(“Sasfin” or “the Offeror”)
Ordinary share code: SFN ISIN: ZAE000006565
Preference share code: SFNP ISIN: ZAE000060273
ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER TO ACQUIRE THOSE SHARES
IN THE CAPITAL OF IQUAD NOT ALREADY HELD BY SASFIN ("FIRM INTENTION
ANNOUNCEMENT")
1. INTRODUCTION
IQuad is pleased to announce that it has received a written offer from
Sasfin (“Sasfin Offer”) to acquire, subject to the conditions precedent
referred to in this announcement, all of the issued shares of IQuad (“IQuad
Shares”) not already owned by Sasfin (“Scheme Shares”), which Sasfin Offer
is to be implemented by way of a scheme of arrangement in terms of section
114 of Chapter 5 of the Companies Act, No. 71 of 2008 (“Companies Act”),
and the Takeover Regulations promulgated under the Companies Act (“Takeover
Regulations”) to be proposed by IQuad between IQuad and its shareholders
(“Shareholders”), other than Sasfin, (“Scheme Members”), so as to
constitute IQuad as a wholly owned subsidiary of Sasfin (“Scheme”).
This announcement is made pursuant to Regulation 101 of the Takeover
Regulations issued in terms of section 120 of the Companies Act.
The Scheme, if it is implemented, will result in the delisting of IQuad
from the JSE Limited (“JSE”).
In terms of the Sasfin Offer and if the Scheme becomes operative, Scheme
Members will be entitled on the operative date of the Scheme
(“Implementation Date”) to receive a cash consideration of R3.65 (three
rand and sixty five cents) per Scheme Share (“Scheme Consideration”) which
represents a 7.8% (seven point eight percent) premium to the 30 (thirty)
day volume weighted average price (“VWAP”) of an IQuad Share on 13 August
2012 (the last possible date before receipt of the Sasfin Offer).
The Sasfin Offer thus provides the Scheme Members with a cash exit
opportunity from a currently highly illiquid share.
2. RATIONALE FOR THE SASFIN OFFER
Sasfin acquired 68% of the issued share capital of IQuad during the second
half of 2011. Throughout this acquisition process and for a period
thereafter, Sasfin supported the continued listing of IQuad on the JSE,
however having re-analysed the remaining IQuad shareholder base, the
illiquidity and low volume of IQuad Shares trading on the JSE, as well as
the annual costs associated with the listing of IQuad measured against the
benefits associated with a listing on the JSE, Sasfin has concluded that
the cost of remaining listed on the JSE far outweigh the benefits.
3. MATERIAL TERMS OF THE SASFIN OFFER
The Sasfin Offer is made subject to the conditions precedent set out in
paragraph 4 and on the following basis -
3.1 the Offeror will pay the Scheme Consideration of R3.65 (three Rand
and sixty five cents) in cash for each Scheme Share held on the
Implementation Date. Payment of the Scheme Consideration will be
administered by the transfer secretaries of IQuad, and will not
bear interest;
3.2 should IQuad declare or pay any dividend between the date of the
Sasfin Offer and the date on which the Scheme Consideration is
discharged, then without prejudice to any of Sasfin's other rights
relating thereto, the Scheme Consideration will be reduced by an
amount equal to the amount of any such dividend as well as any
withholding taxes;
3.3 the Sasfin Offer has been made on the assumption that IQuad has 28
084 658 ordinary shares with a par value of R0.0001 each in issue;
3.4 following implementation of the Scheme, the entire equity of IQuad
will be held directly by Sasfin.
4. CONDITIONS PRECEDENT TO THE IMPLEMENTATION OF THE SCHEME
The Sasfin Offer and thus the posting of the Scheme circular to Scheme
Members is subject to the fulfilment or, to the extent possible in
law, the waiver (in whole or in part) by the Offeror of the following
conditions precedent within the period permitted by regulation –
4.1 the independent expert appointed by those directors of IQuad who
are independent, namely, M Shaik Amod, C Elfick and A Da Costa
("Independent Board"), confirming in writing to the Independent
Board and the Scheme Members that the Scheme Consideration is fair
and reasonable;
4.2 the Independent Board recommending to Scheme Members that they
vote in favour of the Scheme;
4.3 the directors of IQuad elegible to vote at the Scheme Meeting
agreeing to vote in favour of the Scheme in respect of any IQuad
Shares under their direct or indirect control;
4.4 the Offeror obtaining such approval from the SA Reserve Bank or
its authorised agents in terms of the South African Exchange
Control Regulations promulgated under the Currency and Exchanges
Act, 1933;
4.5 the Offeror obtaining approval of the Scheme from the SA Reserve
Bank or its authorised agents in terms of the Banks Act, 1990 (Act
94 of 1990), as amended;
4.6 the approval of the Scheme circular by the JSE and Takeover
Regulation Panel, established in terms of the Companies Act
(Panel”);
4.7 the issue by the Panel of a compliance certificate in respect of
the Scheme as required by section 115(1)(b) read with section
119(4) (b) and section 121(b) of the Companies Act.;
4.8 the Scheme being proposed at the Shareholders meeting convened to
consider the Scheme (the “Scheme Meeting”) and approved by a
special resolution of the Shareholders entitled to vote at the
Scheme Meeting (the “Special Resolution”), at which sufficient
Shareholders are present in person or by proxy to exercise in
aggregate at least 25% (twenty-five percent) of all the voting
rights that are entitled to be exercised on the Special
Resolution, as required by section 115(2) (a) read with section
115(4) of the Companies Act;
4.9 if the provisions of section 115(2) (c) of the Companies Act
apply:
- the Scheme being approved by the court unconditionally, or if
subject to conditions, the Offeror approving such conditions
and undertaking in writing to comply therewith; and
- if applicable, IQuad not treating the Special Resolution as a
nullity in terms of section 115(5) (b) of the Companies Act;
and
4.10 within the period prescribed by section 164 of the Companies Act,
no valid demands having been received by IQuad in terms of that
section read with section 115(8) of the Companies Act, which in
aggregate represent more than 5% of the issued IQuad Shares.
5. IRREVOCABLE UNDERTAKINGS BY SCHEME MEMBERS
The Offeror has obtained irrevocable undertakings from an aggregate of
59% of Scheme Members to, inter alia, vote in favour of the Scheme.
The Scheme Members who have provided the irrevocable undertakings are
the McCance-Price Family Trust, Ukuvula Investment Holdings (Pty)
Limited, Mr BW Meyer, Mr, WJ Piek, Mr B Smith and the David Edwards
Family Trust.
6. GUARANTEE TO THE PANEL
The Offeror will provide the funding for the Scheme. The Offeror has
provided the Panel with the necessary cash confirmation from Sasfin
Bank Limited, contemplated in Takeover Regulations 111(4) and 111(5),
read with the guidelines issued by the Panel in terms of section
201(2)(b) of the Companies Act.
7. DE-LISTING OF IQUAD
Following the implementation of the Scheme, application will be made
to terminate the listing of IQuad on the JSE.
8. SHAREHOLDINGS IN IQUAD AND ACTING AS PRINCIPAL
The Offeror currently holds or controls 19 212 814 IQuad Shares
representing 68% of the issued share capital of IQuad. The Offeror
will be the ultimate purchaser and it is acting alone and not in
conjunction with, or as agent or broker, for any other party.
9. RECOMMENDATION AND FAIRNESS OPINION
The Independent Board based on the information currently available to
it, intends to make a recommendation to Scheme Members to vote in
favour of the resolutions to be proposed at the shareholders meeting
to approve the Scheme, provided that the Independent Board receives an
opinion from the independent expert that the Scheme Consideration is
fair and reasonable.
The substance of the external advice of the independent expert and the
opinion and recommendation of the Independent Board will be detailed
in the circular to be sent to Scheme Members in relation to the
Scheme.
10. DOCUMENTATION
Further details of the Scheme will be included in a circular to be
sent to Scheme Members, containing, inter alia, a notice of the Scheme
Meeting, a form of proxy and a form of surrender and transfer. The
circular is expected to be posted to Scheme Members on or about 25
September 2012 The salient dates in relation to the Scheme will be
published prior to the posting of the circular and will be contained
in the circular.
11. RESPONSIBILITY STATEMENT
The Independent Board accepts responsibility for the information
contained in this Firm Intention Announcement. To the best of its
knowledge and belief, the information contained in this announcement
is true and nothing has been omitted which is likely to affect the
import of the information contained herein.
Johannesburg
17 August 2012
Corporate Advisors to IQuad
Sasfin Capital, a division of Sasfin Bank Limited
Corporate advisor and sponsor to Sasfin
Sasfin Capital, a division of Sasfin Bank Limited
Designated Advisor to IQuad
PSG Capital
Lead sponsor to Sasfin
KPMG Services (Pty) Limited
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