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Waiver of mandatory offer, posting of circular and notice of the general meeting
CONVERGENET HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number 1998/015580/06)
Share code: CVN ISIN: ZAE000102067
(“ConvergeNet” or “the Company”)
WAIVER OF MANDATORY OFFER, POSTING OF CIRCULAR AND NOTICE OF
THE GENERAL MEETING
Shareholders are referred to the detailed terms announcement
released on SENS on 23 November 2012 with regards to the
acquisition of the remaining minority interests in its two
largest subsidiary companies namely, a 25% interest in Sizwe
and a 26% interest in Contract Kitting, terms of which are to
be detailed in a circular to ConvergeNet shareholders (“the
Circular”). Defined terms used in this announcement bear the
meanings ascribed to them in the SENS announcement dated 23
November 2012.
The purpose of this announcement is to provide information
regarding a request for a waiver of a mandatory offer as well
as confirming the posting date of the Circular.
WAIVER OF A MANDATORY OFFER
Further to the details of the Sizwe Acquisition per the 23
November 2012 SENS announcement, shareholders are advised that
Yellow Star, which holds 27.6% in the ordinary issued share
capital of ConvergeNet, entered into a Sale of Shares
Agreement with ConvergeNet to dispose of the remaining 25%
minority interest held in Sizwe to ConvergeNet. As part
settlement of the Sizwe Purchase Price, ConvergeNet will issue
100,000,000 ordinary shares in ConvergeNet at an issue price
of 32 cents per share to Yellow Star, thereby increasing
Yellow Star’s shareholding in ConvergeNet to 38.4%.
In terms of section 123 of the Companies Act, 2008 (71 of 2008
(“the Companies Act”), read with the Takeover Regulations
promulgated in terms of sections 120 and 223 of the Companies
Act (the “Takeover Regulations"), the issue of shares to
Yellow Star (or “the Offeror”) represents a change in control
of ConvergeNet, as the 35% threshold per Regulation 86(1) has
been exceeded, and constitutes an affected transaction as
defined in section 117(1)(c) of the Companies Act.
Yellow Star is accordingly obligated to extend an offer to the
remaining ConvergeNet shareholders to acquire all of the
ordinary shares held by it (the "Offer Shares") in exchange
for the offer consideration of 32 cents per Offer Share
(the “Mandatory Offer”), to be settled in cash.
By virtue of the fact that the issue of the Offer Shares is as
part consideration for the Sizwe Transaction, the Offeror may,
in terms of Regulation 86 of the Companies Act, be exempt from
the obligation to make the Mandatory Offer if the independent
holders of more than 50% of the general voting rights of all
issued securities of ConvergeNet have agreed to waive the
benefit of the Mandatory Offer in accordance with the
principles detailed in section 125(3)(b)(ii) of the Companies
Act (“the Waiver”).
The TRP has advised that it is willing to consider the
application to grant such an exemption to Yellow Star from the
obligation to make a mandatory offer if the majority of
independent shareholders of ConvergeNet waive their
entitlement to receive the Mandatory Offer from Yellow Star,
in accordance with Regulation 86(4).
Accordingly, details of the Waiver, a fair and reasonable
opinion from an independent expert on the Waiver as well as an
ordinary resolution to approve the Waiver will be included in
the Circular to be posted to ConvergeNet shareholders. Yellow
Star and its associates will be precluded from voting on the
waiver resolution.
Any shareholder of ConvergeNet who wishes to make
representations relating to the exemption shall have 10
business days from the date of the posting of the Circular to
make such representations to the TRP before the ruling is
considered. Representations should be made in writing and
delivered by hand, posted or faxed and should reach the TRP by
no later than 26 February 2013, in order to be considered.
If delivered by hand If posted: If faxed:
or courier:
The Executive Director The Executive The Executive
Takeover Regulation Director Director
Panel Takeover Takeover Regulation
1st Floor , Building B Regulation Panel Panel
Sunnyside Office Park PO Box 91833 +27 11 642 9284
32 Princess of Wales Auckland Park
Terrace 2006
Parktown
2193
IRREVOCABLE UNDERTAKINGS
Irrevocable undertakings in favour of Yellow Star have been
obtained from approximately 65.67% of the independent
shareholders of ConvergeNet which undertakings waive the
benefit of the Mandatory Offer in accordance with the
principles detailed in section 125(3)(b)(ii) of the Companies
Act.
POSTING OF CIRCULAR AND NOTICE OF THE GENERAL MEETING
Shareholders are advised that the Circular containing the
terms of the corporate actions, the fairness opinions prepared
by an independent expert, a notice of the General Meeting and
a form of proxy has been posted to shareholders on 12 February
2013. The general meeting of the Company's shareholders will
be held at the Company’s offices at 272 West Avenue,
Lakefields Office Park, Block D, Centurion on Tuesday, 12
March 2013 at 11h00 for the purpose of considering and, if
deemed fit, passing, with or without modification, the
ordinary resolutions.
SALIENT DATES AND TIMES IN RESPECT OF THE GENERAL MEETING
2013
Record date in order to be eligible Friday, 1 February
to receive the notice of general
meeting
Notice of general meeting posted to Tuesday, 12 February
ConvergeNet shareholders
Last date to trade in order to be Friday, 22 February
eligible to vote at the general
meeting
Record date in order to be eligible Friday, 1 March
to vote at the general meeting
Last date to lodge forms of proxy Friday, 8 March
for the general meeting by 11h00
General meeting at 272 West Avenue, Tuesday, 12 March
Lakefields Office Park, Block D,
Centurion at 11h00
Results of general meeting released Tuesday, 12 March
on SENS
Results of general meeting released Wednesday, 13 March
in the press
Centurion
12 February 2013
Corporate adviser: AfrAsia Corporate Finance (Pty) Ltd
Sponsor: Deloitte & Touche Sponsor Services (Pty) Ltd
Independent expert: BDO
Date: 12/02/2013 03:02:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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