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Notification by RTSA to shareholders of Palabora in terms of section 124(4) of the Companies Act
Palabora Mining Company Limited
(Incorporated in the Republic of South Africa)
(Registration No. 1956/002134/06)
JSE Code: PAM ISIN: ZAE000005245
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”)
China-Africa Development Fund (“CADFund”)
NOTIFICATION BY RTSA TO SHAREHOLDERS OF PALABORA MINING COMPANY LIMITED IN
TERMS OF SECTION 124(4) OF THE COMPANIES ACT AND NO INCREASE TO OFFER
CONSIDERATION
1. INTRODUCTION
Shareholders of Palabora Mining Company Limited (“PMC”) are referred to the circular dated 16
September 2013 (“Offer Circular”) in which they were advised that following the direct and/or
indirect acquisition of approximately 74,5% of the voting rights attaching to the issued ordinary
shares in PMC (“PMC Ordinary Shares”) by a consortium comprising South African and
Chinese entities, namely, IDC, HBIS, Tewoo, General Nice and CADFund (the “Consortium”),
the Consortium, through Rio Tinto South Africa Limited (“RTSA”), has extended a mandatory
offer to the remaining shareholders of PMC (“the Holders”) to acquire all their PMC Ordinary
Shares (“Offer Shares”) (“the Offer”).
2. PROVISIONAL RESULTS OF THE OFFER AND INTENTION TO NOTIFY HOLDERS IN
TERMS OF SECTION 124(4) OF THE COMPANIES ACT, NO. 71 OF 2008 (“COMPANIES
ACT”)
Holders are advised that as at 12:00 on Tuesday, 15 October 2013, RTSA had received valid
acceptances of the Offer in respect of 9 281 746 PMC Ordinary Shares equating to
approximately 75.3% of the Offer Shares.
Holders are further advised that as at 12:00 on Tuesday, 15 October 2013, RTSA’s aggregate
shareholding, directly and indirectly, in PMC (including the 74.5% held by RTSA prior to making
the Offer) is 45 288 601 PMC Ordinary Shares which constitutes 93.7% of all of the issued PMC
Ordinary Shares. Accordingly, RTSA will, in compliance with the provisions of section 124(4)(a)
of the Companies Act, formally notify each of the Holders who has not yet accepted the Offer
(“the Remaining Holders”) that RTSA now holds more than 90% of all the issued PMC Ordinary
Shares. Such notification to the Remaining Holders shall further advise them that, in terms of
section 124(4)(b) of the Companies Act, they shall be entitled to require RTSA to purchase their
Offer Shares on the same terms as apply to the Offer (“Put Option Rights”). Following the
exercise by the Remaining Holders of their Put Option Rights, RTSA will be bound to acquire
the relevant Remaining Holder’s Offer Shares on the same terms that applied to the Offer. The
Remaining Holders may exercise their Put Option Rights within three months of receipt of
RTSA’s notice to them of its acquisition of the relevant 90% shareholding.
Shareholders are advised that the Offer will remain open until 12:00 on the Closing Date of the
Offer, being 1 November 2013 or such other extended date (should the Offer be extended), and
that their entitlement to exercise their Put Option Rights pursuant to the provisions of
section 124(4) of the Companies Act during the aforementioned three month period does not
detract from their right to accept the Offer during the period of the Offer.
3. OFFER CONSIDERATION
In terms of the Offer, the consideration to the Holders who accept the Offer is R110 per Offer
Share, plus an additional amount per Offer Share equal to an escalation amount (further details
of which were provided in the Offer Circular), being an amount of R5,95 per Offer Share, and
thus R115.95 in aggregate per Offer Share (“Offer Consideration”). The Offer Consideration
(including the escalation amount) is capital in nature.
4. NO INCREASE TO THE OFFER
The Remaining Holders are hereby advised that the Consortium will not be increasing the Offer
Consideration. The Remaining Holders are reminded that the Offer remains open for
acceptances until 12:00 on the Closing Date of the Offer, being 1 November 2013 or such other
extended date (should the Offer be extended) .
5. FAIRNESS OPINION
Holders are reminded that, the independent expert, being KPMG Services Proprietary Limited
(“Independent Expert”), has performed a valuation of the PMC Ordinary Shares. Taking into
consideration the terms and conditions of the Offer, the Independent Expert has expressed the
opinion, based on the assumptions and other considerations set forth in the opinion, that the
terms and conditions of the Offer are fair and reasonable to the Holders. The Independent
Expert has determined the valuation range for the Offer Shares to be R92.94 to R97.81 PMC
Ordinary Share as at the date of the Offer Circular. The full text of the opinion from the
Independent Expert is set out in the Offer Circular.
6. COMPULSORY ACQUISITION IN TERMS OF SECTION 124(1) OF THE COMPANIES ACT
The Remaining Holders are further advised that, if following the Offer, RTSA has acquired at
least 90% of the Offer Shares, RTSA will invoke the provisions of section 124(1) of the
Companies Act and require the Remaining Holders to sell their Offer Shares to RTSA on the
same terms as the Offer.
7. TERMINATION OF THE LISTING OF PMC ORDINARY SHARES ON THE JSE LIMITED
(“JSE”)
If following the implementation of the Offer, RTSA has acquired 100% of the Offer Shares PMC
will be automatically delisted from the JSE. If, however, following the implementation of the
Offer, RTSA has acquired at least 90% of the Offer Shares and RTSA accordingly invokes the
provisions of section 124(1) of Companies Act, an application will be made to delist PMC from
the JSE in terms of paragraph 1.16(a) of the JSE Listings Requirements.
Johannesburg
16 October 2013
Rio Tinto South Africa Limited
Financial advisors to the Chinese Consortium and to RTSA
Absa Member of Barclays
Barclays
Financial advisors to the IDC and to RTSA
Deutsche Bank
Legal advisor to the Consortium and to RTSA
Edward Nathan Sonnenbergs Inc.
Financial advisor to PMC
Investec Bank
Sponsor to PMC
One Capital
Legal advisor to PMC
Webber Wentzel
Independent expert to PMC
KPMG
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 Companies 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 Offer 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, Investec Bank and One Capital are 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.
.
Date: 16/10/2013 05:26:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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