Wrap Text
Firm intention by Consortium including Hebei and IDC acting through RTSA
Industrial
Development Hebei Iron & Steel Tewoo Group General Nice China-Africa
Corporation of Group Co. Limited Co. Limited Development Limited Development Fund
South Africa Limited
FIRM INTENTION BY RIO TINTO SOUTH AFRICA LIMITED ("RTSA"), ON BEHALF
OF THE CONSORTIUM, TO ACQUIRE ORDINARY SHARES IN PALABORA MINING
COMPANY LIMITED, REGISTRATION NUMBER 1956/002134/06 ("PMC")
NOT ALREADY OWNED BY RTSA
1. INTRODUCTION
1.1 PMC shareholders are referred to the announcement released by PMC on the Stock
Exchange News Service ("SENS") on 11 December 2012, in terms of which they were
informed that a consortium comprising of South African and Chinese entities, namely, Industrial
Development Corporation of South Africa Limited ("IDC"), Hebei Iron & Steel Group
Co. Limited ("HBIS"), Tewoo Group Co. Limited ("Tewoo"), General Nice Development
Limited ("General Nice") and China-Africa Development Fund ("CADFund") (the
"Consortium") concluded a sale of shares agreement ("SPA") with Rio Tinto Investment
Holdings B.V ("RTIH") and Anglo South Africa Capital Proprietary Limited ("ASAC") to
acquire all the ordinary shares in PMC held directly and indirectly by RTIH and ASAC, at an
agreed purchase consideration of R110 per share plus the escalation amount calculated in
accordance with the SPA, as set out in paragraph 3.2.1.2 below ("the SPA Acquisition").
1.2 The SPA Acquisition was implemented on 31 July 2013, resulting in the Consortium, through
RTSA, acquiring (directly and/or indirectly) approximately 74.5% of the voting rights attaching
to the issued ordinary shares in PMC ("PMC Ordinary Shares"). As required in terms
of section 123 of the Companies Act, No. 71 of 2008 ("Companies Act") and agreed in
terms of the SPA, RTSA will extend an offer to the remaining shareholders of PMC ("the
Holders") to acquire all of their PMC Ordinary Shares ("the Offer Shares") on the
terms set out in this announcement.
2. DESCRIPTION OF RTSA AND THE CONSORTIUM
RTSA is a public company duly incorporated in accordance with the laws of South Africa. The
issued share capital of RTSA is held 80% (eighty per cent) by Smart Union Resources (Mauritius)
Co., Limited ("SUR Mauritius") and 20% (twenty per cent) by IDC. IDC is a development
finance institution wholly owned by the South African government. SUR Mauritius is held 100%
by Smart Union Resources (Hong Kong) Co., Limited ("SUR Hong Kong"), whose shares are
in turn held by a consortium comprising the following parties: HBIS, a leading international steel
producer wholly owned by the Chinese government; General Nice, a privately owned Chinese
trading company;Tewoo, a major diversified group wholly owned by the Chinese government; and
CADFund, the first private equity fund in China focusing on investment in Africa.
3. THE OFFER
3.1 The Offer and Terms of the Offer
3.1.1 RTSA hereby irrevocably offers to acquire from the Holders all of their Offer Shares
at a price equal to the Offer Consideration (as set out in paragraph 3.2 below)
("the Offer"). Holders will be able to accept the Offer in respect of all of their
Offer Shares, or any part thereof.
3.1.2 To accept the Offer, Holders will have to refer to the procedures for acceptance
which will be detailed in the circular containing the terms and conditions of the Offer
("the Circular"), which Circular is presently anticipated to be despatched to all
Holders on or about 30 August 2013.
3.2 Offer Consideration
3.2.1 The consideration for the Offer ("Offer Consideration") will be:
3.2.1.1 R110 per PMC Ordinary Share, plus;
3.2.1.2 an escalation amount of R5,95 per PMC Ordinary Share, which represents a
non-compounding escalation of 5% per annum over the period from 1 July
2012 up to, but excluding, the closing date of the SPA Acquisition, being 31
July 2013 (the "SPA Closing Date").
3.2.2 The Offer Consideration represents a premium of 17.0% to the last trading day
closing price of PMC Ordinary Shares on the securities exchange operated by
the JSE Limited ("JSE"), and a premium of 27.6% to the 30-day volume weighted
average price, prior to the announcement of the SPA Acquisition released on SENS
on 11 December 2012.
3.2.3 The Offer Consideration is greater than the agreed Rand price per PMC Ordinary
Share (and related escalation) that the Consortium has paid for the acquisition of
its 74.5% interest in PMC pursuant to the SPA Acquisition, on the basis that the
escalation amount payable in terms of the Offer is calculated from 1 July 2012 up
to but excluding the SPA Closing Date, whilst the escalation amount paid by the
Consortium in terms of the SPA was calculated from 1 July 2012 up to 30 June 2013.
This has resulted in the escalation amount payable in terms of the Offer being 0.82%
greater than that paid pursuant to the SPA Acquisition.
3.2.4 RTSA believes that the Offer Consideration reflects fair value for the Offer Shares
and will be attractive to the Holders.
3.3 Offer Unconditional Save for TRP Approval
The Offer will not be subject to any conditions precedent. The posting of the Circular (and
the making of the Offer therein) is subject to the receipt of the required approval of the
Takeover Regulation Panel (the "TRP"), including the issuance by the TRP of the requisite
compliance certificate. In particular, the Offer will not be conditional upon any minimum
level of acceptances by Holders in respect of the Offer Shares.
3.4 Method of Settlement of the Offer Consideration
3.4.1 The settlement of the Offer Consideration will be effected by way of electronic funds
transfer in the case of a Holder holding PMC Ordinary Shares in certificated form,
and in the case of a Holder holding PMC Ordinary Shares in dematerialised form, the
Offer Consideration will be credited to their accounts with their respective Central
Security Depository Participants or brokers within six business days from the date of
receipt of valid acceptances from the relevant Holder.
3.4.2 Holders who are residents, citizens or nationals in jurisdictions outside South Africa
or are incorporated outside South Africa are advised that payment of the Offer
Consideration will be made in South African Rands.
3.5 Duration of the Offer
3.5.1 The Offer shall remain open for a period commencing on the first day after the
date of posting of the Circular ("the Offer Opening Date") and ending on the
first Friday on or after the date that falls 30 business days after the Offer Opening
Date ("the Offer Closing Date"), unless RTSA, in its sole discretion (but with
the prior approval of the TRP and the independent board of PMC), extends the
Offer Closing Date, in which event all amended dates relating to the Offer will be
announced.
3.5.2 RTSA reserves the right to extend the duration of the Offer in terms of Regulation
103(1)(b) of the Companies Regulations, 2011 (the "Regulations").
3.6 Withdrawal of the Offer
RTSA can only withdraw the Offer with the prior written approval of the TRP.
3.7 Rights of Withdrawal by the Accepting Holder/s
Acceptances of the Offer by an accepting Holder shall be irrevocable, as the Offer is not
conditional upon any minimum level of acceptance of the Offer Shares.
4. DELISTING OF PMC FROM THE JSE
4.1 It is the intention of the Consortium, subject to the approval of the South African Reserve
Bank and the JSE, that PMC be delisted from the JSE.
4.2 Should the Offer be accepted by Holders of at least 90% of the Offer Shares, then RTSA
reserves the right to implement a compulsory acquisition of the remaining PMC shares in
accordance with section 124 of the Companies Act. Should RTSA acquire 100% of the
PMC Ordinary Shares as a result of the Offer (and/or applicable compulsory acquisition),
the JSE will automatically delist PMC.
4.3 If RTSA does not acquire 100% of the PMC Ordinary Shares as a result of the Offer, it is
the intention of the Consortium to request PMC to delist from the JSE. Any such delisting
is subject to the provisions of the Listings Requirements of the JSE, which require, amongst
others, the approval of such delisting by a majority of shareholders in general meeting (at
which meeting, unless the JSE otherwise decides, the votes of the Consortium and any party
acting in concert with it will be disregarded) and that an offer, subject to a fairness opinion,
must have been extended to all shareholders.
5. CASH CONFIRMATION
RTSA, has through Standard Chartered Bank, Johannesburg Branch, provided proof to the
satisfaction of the TRP that it has sufficient cash resources available to it to fulfil its commitments
in terms of the Offer in full, should all the Holders accept the Offer. In this regard, Standard
Chartered Bank, Johannesburg Branch, has provided cash confirmation to the TRP in accordance
with Regulation 111(4) of the Regulations that sufficient funds amounting to R1,429,764,204.45
are available to settle the full Offer Consideration that may become payable on implementation
of the Offer in respect of all Holders.
6. OFFER CIRCULAR
6.1 The Circular will be dispatched to the Holders within 20 business days after the date of
this announcement, or such longer period as may be allowed by the TRP. The salient dates
and times in respect of the Offer will also be published in due course. An application for an
extension of time will be made to the TRP if the posting of the Circular is expected to be
delayed beyond 20 business days after the date of this announcement.
6.2 The Circular will be dispatched to the board of PMC and all Holders whose names appear
on PMC's securities register as at the posting record date.
7. WARRANTY
The Offer Shares are to be acquired on the basis of an acceptance of the Offer by the Holders
made in accordance with the provisions of the Circular. Such acceptances will be deemed to
constitute an irrevocable and unconditional warranty by the accepting Holders that the Offer
Shares, to which the acceptance relates, are sold:
7.1 free from any encumbrance from the date and time of payment therefor and delivery
thereof; and
7.2 with all rights, benefits and entitlements attaching thereto.
8. DIRECTORS' RESPONSIBILITY STATEMENT
8.1 The directors of RTSA accept responsibility for the information contained in this
announcement, including any statement regarding the beneficial interest in PMC Ordinary
Shares held by RTSA. In addition, they certify that, to the best of their knowledge and belief,
the information in this announcement is true and does not omit anything that is likely to
affect the importance of the information contained herein.
8.2 In order to facilitate the communication of the Offer by RTSA to the Holders, this
announcement has been released on SENS under the JSE general code. For the avoidance
of doubt, this announcement is made by, and is the sole responsibility of, RTSA. PMC's views
on the Offer, and its recommendation to Holders, will be set out in a circular from PMC to
Holders which will be posted to Holders jointly with, or within 20 business days after, the
posting of the Circular relating to the Offer (or such later date as the TRP may approve).
Johannesburg
1 August 2013
General
The release, publication or distribution of this announcement in jurisdictions other than South Africa may be restricted
by law and, therefore, any persons who are subject to the laws of any jurisdiction other than South Africa should inform
themselves about and observe any applicable requirements in those jurisdictions. This announcement has been
prepared for the purposes of complying with the Companies Act and the Takeover Regulations and the information
disclosed may consequently not be the same as that which would have been disclosed if this announcement had
been prepared in accordance with the laws and regulations of any jurisdiction other than South Africa.
This announcement is not intended to, and does not, constitute, or form part of, an offer to sell or an invitation to
purchase or subscribe for any securities or a solicitation of any vote or approval in any jurisdiction. This announcement
does not constitute a prospectus or a prospectus equivalent document. Holders are advised to read carefully the
formal documentation in relation to the Offer once it has been dispatched. The Offer will be made solely through
the Circular, which will contain the full terms and conditions of the Offer. Any decision to accept the Offer or other
response to the proposals should be made only on the basis of the information contained in the offer circular.
Edward Nathan Sonnenbergs Inc., Absa Corporate and Investment Bank (a division of Absa Bank Limited), Barclays
Bank PLC and Deutsche Bank are acting exclusively for the shareholders of RTSA in connection with the Offer and for
no one else and will not be responsible to anyone other than the shareholders of RTSA for providing the protections
afforded to its clients or for providing advice in relation to the Offer. Webber Wentzel is acting exclusively for PMC in
connection with the Offer and for no one else and will not be responsible to anyone other than PMC for providing
the protections afforded to its clients or for providing advice in relation to the Offer.
Financial advisors to Legal advisor to the shareholders
the shareholders of RTSA of RTSA and to RTSA
and to RTSA Edward Nathan Sonnenbergs Inc.
Barclays
Absa Member of Barclays
Financial advisor to the shareholders Legal advisors to
of RTSA and to RTSA the Chinese Consortium
Deutsche Bank Werksmans Attorneys
Sponsor to PMC Financial advisor to PMC
One Capital Investec Bank
Legal advisor to PMC
Webber Wentzel
Date: 01/08/2013 07:10:00 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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