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Firm intention by Arrowhead to make offer for all linked units in Vividend, general offer, withdrawal of cautionary
ARROWHEAD PROPERTIES LIMITED VIVIDEND INCOME FUND LIMITED
(Incorporated in the Republic of South Africa) (Incorporated in the Republic of South Africa)
(Registration number 2011/000308/06) (Registration Number 2010/003232/06)
JSE share code: AWA ISIN: ZAE000158101 JSE share code: VIF ISIN: ZAE000150918
JSE share code: AWB ISIN: ZAE000158119 (Approved as a REIT by the JSE)
(Approved as a REIT by the JSE) (“Vividend”)
(“Arrowhead”)
JOINT ANNOUNCEMENT REGARDING:
- A FIRM INTENTION BY ARROWHEAD TO MAKE AN OFFER TO ACQUIRE ALL THE
LINKED UNITS IN THE CAPITAL OF VIVIDEND NOT ALREADY HELD BY ARROWHEAD
(“FIRM INTENTION ANNOUNCEMENT”);
- A GENERAL OFFER; AND
- WITHDRAWAL OF VIVIDEND CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Further to the joint announcement made on 24 February 2014, the respective boards of
directors of Vividend and Arrowhead are pleased to announce that, on 31 March 2014,
Vividend and Arrowhead (the “Parties”) entered into an implementation agreement (the
“Implementation Agreement”) in terms of which Arrowhead confirmed its firm intention to
make an offer to acquire all the issued linked units in Vividend (“Vividend Linked Units”),
which it does not already hold (the “Offer”) –
- by means of one or more indivisibly linked schemes of arrangement (the “Scheme”) in
terms of section 114 of the Companies Act 71 of 2008, as amended, (the "Companies
Act"), to be proposed by the independent board of directors of Vividend (the "Vividend
Independent Board"), appointed in terms of the Takeover Regulations, between Vividend
and the holders of Vividend Linked Units (“Vividend Linked Unitholders”); or
- if the conditions to which the Scheme is subject are not fulfilled, or where applicable
waived, (as described more fully below), by means of a voluntary general offer extended to
all Vividend Linked Unitholders (the "General Offer").
In terms of the Scheme, Vividend Linked Unitholders will, if the Scheme becomes operative,
receive 0,374 of an Arrowhead A linked unit (“Arrowhead A Linked Unit”) and 0,374 of an
Arrowhead B linked unit (“Arrowhead B Linked Unit”) for every 1 Vividend Linked Unit
(“Scheme Consideration”) held by them on the Scheme Consideration record date (the
“Scheme Record Date”). Arrowhead will not offer any cash alternative unless (as is more fully
described below) the Takeover Regulation Panel (“TRP”) determines that the Scheme
Consideration should include a cash amount per Vividend Linked Unit equivalent to the option
premium of R4,461,500 (four million four hundred and sixty one thousand and five hundred
Rand) paid by Arrowhead to Stanlib Asset Management (“Stanlib”) (being an amount of
7 cents per Vividend Linked Unit), in which case the Scheme Consideration shall be increased
to include an additional cash consideration of R0.07 cents per Vividend Linked Unit.
The consideration offered in terms of the General Offer ("Offer Consideration"), if it is made,
will be the same as that offered under the Scheme.
Based on the volume weighted average price ("VWAP") of Arrowhead A Linked Units and
Arrowhead B Linked Units on the securities exchange operated by the JSE Limited ("JSE") for
the 30 days up to and including Friday, 28 March 2014, being the last practical date for
finalisation of the figures prior to the date of this Firm Intention Announcement (the
"Publication Date"), the Scheme Consideration implies a Rand value of 506.11 cents per
Vividend Linked Unit and represents a premium of 5% to the VWAP of Vividend Linked Units
over the same period of 481.77 cents per Vividend Linked Unit.
As announced on SENS on 6 December 2013, Arrowhead concluded an agreement with
Coronation Fund Managers (“Coronation”) pursuant to which Arrowhead acquired 31.7% of
the issued Vividend Linked Units from Coronation (“Coronation Acquisition”). The purchase
consideration under the Coronation Acquisition was discharged by Arrowhead through the
allotment and issue of Arrowhead A Linked Units and Arrowhead B Linked Units to Coronation
pursuant to which Coronation received 0,374 of an Arrowhead A Linked Unit and 0,374 of an
Arrowhead B Linked Unit for every 1 Vividend Linked Unit (“Coronation Consideration”) held
by Coronation. Based on the VWAP of Arrowhead A Linked Units and Arrowhead B Linked
Units for the 30 days up to and including 5 December 2013 (the day prior to the
announcement of the Coronation Acquisition, the implied Rand value of the Coronation
Consideration was 522.18 cents per Vividend Linked Unit, a 6% premium to the VWAP of
Vividend Linked Units over the same period of 492.50 cents per Vividend Linked Unit. .
The Scheme will be subject to the fulfilment of the conditions precedent referred to in
paragraph 5 below. The making of the General Offer will be subject to the conditions referred
to in paragraph 6.1 below.
As previously announced –
- Arrowhead has, during early December 2013, acquired 31.7% of the Vividend Linked Units
in issue from Coronation;
- Arrowhead has, with effect from 1 March 2014, acquired the equity in Vividend
Management Group Proprietary Limited (“Vividend Manco”), the external asset manager
of Vividend, for a purchase price of R88.6 million. As a result of the change in control of
Vividend Manco, M Jacobson, G Rabinowitz, M Sandak-Lewin and A Witt, have resigned
from the Vividend board. Ari Jacobson, Robert Amoils and Bruce Rubenstein have agreed
to remain on the Vividend board (as CEO, Financial Director and non-executive director
respectively) for a three month period from 1 March 2014;
- Arrowhead has concluded an agreement with Stanlib, in respect of the approximately
60.2 million Vividend Linked Units controlled by Stanlib (representing approximately 22% of
the issued Vividend Linked Units), in terms of which–
- Stanlib has irrevocably undertaken that, if Arrowhead proposes the Scheme,
Stanlib will vote in favour of all Vividend Linked Unitholder resolutions necessary
to approve the Scheme; and
- Stanlib has granted Arrowhead an option (the “Stanlib Option”) to require
Stanlib to accept the General Offer (if it is to be made). As consideration for the
granting of the Stanlib Option, Arrowhead has paid Stanlib an option premium of
R4,461,500 (“Option Premium”), equivalent to R0.07 per Vividend Linked Unit.
Vividend and Arrowhead will make an application to the TRP for a formal ruling as to whether
or not the Scheme Consideration should be increased by the Option Premium paid by
Arrowhead to Stanlib. Vividend and Arrowhead linked unitholders will be advised of the TRP’s
ruling on SENS and in the circular to Vividend Linked Unitholders in relation to the Scheme
(“Scheme Circular”).
2. INFORMATION ABOUT ARROWHEAD
Arrowhead is a listed REIT that holds a diverse portfolio of retail, industrial and commercial
buildings, valued at approximately R4.5 billion together with a 31.7% interest in Vividend.
3. RATIONALE FOR THE PROPOSED TRANSACTION
Rationale for Arrowhead
The transaction contemplated in the Scheme (or the General Offer, should it become
applicable) (the "Proposed Transaction") is in line with Arrowhead’s investment strategy of
only making distribution enhancing acquisitions and will allow Arrowhead to acquire control of
Vividend’s portfolio of commercial, industrial and retail properties, valued at approximately
R2 billion, that is complimentary to its own portfolio.
Rationale for Vividend
Vividend did not solicit the Proposed Transaction and was approached by Arrowhead following
its acquisition of Vividend Manco, the acquisition by Arrowhead of a strategic stake in
Vividend, and Arrowhead's securing of key Vividend Linked Unitholder support for a possible
transaction.
Vividend management have advised the Vividend Independent Board of certain structural
changes in the listed property sector recently which have negatively impacted investor
sentiment, specifically towards small-mid cap, illiquid property stocks and as a consequence
the ability of Vividend to continue to acquire property on a non-dilutive basis. The
aforementioned structural changes in the sector include, inter alia:
- increase in bond yields and cost of capital (both debt and equity);
- limited liquidity in capital markets to fund acquisitions;
- increase in the discount applied by investors to illiquid small-mid cap property
stocks;
- scarcity of potential acquisitions and competition for stock is driving yields to levels
unachievable for Vividend to transact without significant dilution; and
- increased market volatility and reluctance of vendors to bear execution risk.
Given those factors, the Vividend Independent Board believes that it is in the interests of
Vividend and Vividend Linked Unitholders that they be given the opportunity to consider the
Proposed Transaction.
4. THE SCHEME CONSIDERATION
4.1 The Scheme, if implemented, will entitle those persons who are recorded in the securities
register of Vividend on the Scheme Record Date (“Scheme Participants”), to receive the
Scheme Consideration.
4.2 The Scheme Consideration will be issued ex entitlement to the Arrowhead income
distribution for the 6 month period ended 31 March 2014. Vividend Linked Unitholders
will become entitled, pursuant to the Scheme, to the Arrowhead income distribution for
the period commencing 1 April 2014 and its future income distributions.
4.3 The Vividend Linked Units held by Scheme Participants on the Scheme Record Date will
be acquired by Arrowhead ex entitlement to the Vividend income distribution for the
6 month distribution period ending 28 February 2014 (“Vividend February Distribution”)
and for the 1 month period ending 31 March 2014 ("Vividend March Distribution").
This shall be achieved by Vividend paying to Vividend Linked Unitholders, prior to the
implementation of the Scheme, both the Vividend February Distribution in accordance
with its normal distribution timetable, and the Vividend March Distribution in the form of a
special distribution (the “Special Distribution”). The Special Distribution is expected to
be paid before the date of implementation of the Scheme (“Operative Date”).
5. CONDITIONS PRECEDENT TO IMPLEMENTATION OF THE SCHEME
The Scheme will be subject to the fulfilment or (where applicable) waiver of the following
conditions precedent (the "Scheme Conditions") -
5.1 as at 17h00 on the fifth business day before the date on which the last of the scheme
meetings (or any adjourned scheme meeting) (“Scheme Meetings”) is to be held, a
material adverse change, as defined below (“Material Adverse Change”) has not
occurred (and for clarity, Arrowhead may, on written notice given to Vividend at any time
prior to such time, require the Scheme and the Implementation Agreement to lapse, if it
has knowledge that a Material Adverse Change has occurred and is occurring at the
relevant time and same is not proved otherwise by Vividend), it being agreed that this
condition shall be regarded as having been fulfilled unless Arrowhead has informed
Vividend by 17h00 on the fifth business day before the date on which the last of the
Scheme Meetings is to be held (or any adjournment thereof) that this condition has not
been fulfilled;
5.2 by not later than 17h00 on 31 July 2014, the approval of the requisite resolutions in
respect of the Scheme ("the Scheme Resolutions") and the Special Distribution by the
requisite majority of Vividend Linked Unitholders (in their capacities as holders of
Vividend Shares and Vividend Debentures) is obtained at the relevant meetings;
5.3 by not later than 17h00 on 31 July 2014, to the extent required under the listings
requirements of the JSE ("JSE Listings Requirements"), the requisite approvals of
Arrowhead Linked Unitholders for the acquisition of the Vividend Linked Units pursuant to
the Scheme and/or the General Offer and/or the issue of the Scheme Consideration, are
obtained at the relevant meeting;
5.4 by not later than 17h00 on 31 August 2014, to the extent required under section 115(3)
of the Companies Act, approval of the implementation of the Scheme Resolutions by the
court is obtained and, if applicable, Vividend not having treated the Scheme Resolutions
as a nullity (which it may not do unless it is instructed to do so by Arrowhead), as
contemplated in section 115(5)(b) of the Companies Act;
5.5 as at 17h00 on the 2nd (second) business day after the date of conclusion of the last of
the Scheme Meetings, Vividend Linked Unitholders holding more than 5% (five percent)
of all the issued Vividend Linked Units not having given, in terms of section 164(3) of the
Companies Act, valid notice of objection to the Scheme Resolution taken at either
Scheme Meeting and those objecting Vividend Linked Unitholders not having voted
against the Scheme Resolution in respect of more than 5% (five percent) of the issued
Vividend Linked Units at the relevant Scheme Meeting;
5.6 by not later than 17h00 on 31 August 2014, the receipt of all regulatory approvals that
may be required in connection with the Offer, including the unconditional approval in
writing of the relevant South African competition authority/ies, to the extent required in
terms of the Competition Act, of the transactions contemplated by the Offer, or if such
approval is conditional, such conditions being acceptable to the party or parties upon
whom they are imposed or upon whom they have an impact, in their sole and absolute
discretion;
5.7 as at 17h00 on the date on which the last of the conditions in clauses 5.2 to 5.6 has been
fulfilled or, where appropriate, waived, none of the following events shall have occurred
in respect of Vividend or Arrowhead –
5.7.1 any corporate action, legal proceedings or other procedure or other step
(including an application to court, proposal of a resolution or convening of a
meeting of shareholders, members, directors or other officers) is taken by any
person with a view to –
5.7.1.1 a moratorium, compromise, composition, business rescue or similar
arrangement with any of its creditors;
5.7.1.2 its winding-up, dissolution or commencement of business rescue
proceedings, or for the seeking of relief under any applicable bankruptcy,
insolvency, company or similar law, or any such resolution; or
5.7.2 the value of its assets is less than its liabilities (taking into account of contingent
and prospective liabilities) or it is unable to pay its debts as they fall due,
it being agreed that this condition shall be regarded as having been fulfilled unless either
Vividend or Arrowhead has informed the other by no later than 17h00 on the date on
which the last of the conditions in clauses 5.2 to 5.6 has been fulfilled or, where
appropriate, waived, that it has knowledge that this condition has not been fulfilled; and
5.8 by not later than 17h00 on 31 August 2014, the TRP has issued a compliance certificate
in relation to the Scheme.
In relation to paragraph 5.1, Material Adverse Change means –
- any circumstance, fact or event, actual or which has arisen or might reasonably be
expected to arise which, alone or together with any other circumstance, fact or event, which
has arisen or which might reasonably be expected to arise has, or is reasonably be
expected to have, the effect of a reduction of 10% (ten percent) or more of Vividend’s net
property income and/or a reduction of 10% (ten percent) or more of the value of the
Vividend property portfolio (other than a reduction in value resulting from macro-economic
factors, including but not limited to changes in interest rates or changes to applicable
discount rates used for valuing properties, which are not related to the specific factors of the
property/ies concerned); or
- Vividend having committed a material breach of any of its material undertakings referred to
in paragraphs 7.1 and 7.3 below (and as more fully described in the Implementation
Agreement).
The conditions set out in paragraphs 5.1, 5.5 and 5.7 above can be waived by Arrowhead.
Save where any of the remainder of the conditions are of a regulatory nature, they can be
waived by agreement in writing between Arrowhead and Vividend. Arrowhead and Vividend
may by agreement in writing and with the prior approval of the TRP (where required) extend
the date for fulfilment of any of the conditions.
6. THE OFFER
6.1 The General Offer is subject to the parties having announced through SENS and the
press, as required, that any of the following Scheme Conditions has not been fulfilled
(and, where applicable, has not been waived by Arrowhead) and that the Scheme has
therefore failed:
6.1.1 the approval by Vividend Linked Unitholders of the Scheme (as referred to in
paragraph 5.2 above);
6.1.2 to the extent required under section 115(3) of the Companies Act, the approval
of the implementation of the Scheme Resolutions by the court is obtained and,
if applicable, Vividend not having treated the Scheme Resolutions as a nullity
(as referred to in paragraph 5.4 above); and
6.1.3 as at 17h00 on the second business day after the date of conclusion of the last
of the Scheme Meetings, Vividend Linked Unitholders holding more than 5% of
all the issued Vividend Linked Units not having given, in terms of section 164(3)
of the Companies Act, valid notice of objection to the Scheme Resolutions
taken at either of the Scheme Meetings and those objecting Vividend Linked
Unitholders not having voted against the Scheme Resolutions in respect of
more than 5% of the issued Vividend Linked Units at the relevant Scheme
Meeting (as referred to in paragraph 5.5 above),
(such conditions being the "Offer Trigger Conditions").
6.2 The General Offer will become effective, and be open for acceptances, once such
announcement is made via SENS and the press. Vividend Linked Unitholders will be
advised in such announcement of the relevant dates and timetable for implementation of
the General Offer.
6.3 The General Offer will also be subject to the fulfilment or waiver of all the remaining
Scheme Conditions (i.e. those other than the Offer Trigger Conditions). Accordingly, if
the General Offer has become effective and open for acceptances, but any of the
remaining Scheme Conditions have not yet been fulfilled or waived, the sale of Vividend
Linked Units resulting from any acceptances of the General Offer shall remain subject to
the fulfilment or waiver of those remaining Scheme Conditions. Any such conditions
which are not of a regulatory nature can be waived or relaxed by Arrowhead.
6.4 The Offer Consideration will be the same as the Scheme Consideration. However,
although Vividend Linked Units purchased pursuant to the General Offer will be acquired
ex the entitlement to the Vividend February Distribution, there will be no Vividend March
Distribution (i.e. Special Distribution) in the context of the General Offer.
6.5 Arrowhead is currently giving consideration to a possible termination of the listing of the
Vividend Linked Units on the JSE in the event that the Scheme fails and the General
Offer is made. Any such termination would, in terms of the listings requirements of the
JSE, require the approval of Vividend Linked Unitholders in general meeting. Arrowhead
shall, prior to the finalisation of the Circular referred to below, inform Vividend whether or
not it requires such a resolution to be placed before a general meeting of Vividend Linked
Unitholders, and in such event the Circular shall include the requisite information
regarding the proposed termination of listing and a notice of general meeting at which the
requisite resolution will be considered and voted on. For the avoidance of doubt, the
making of the General Offer shall not be subject to the passing of the aforementioned
resolution
7. IMPLEMENTATION AGREEMENT
The Implementation Agreement provides, inter alia, for the following:
7.1 Between the date of signing of the Implementation Agreement and the later of the
Operative Date and the date upon which the Offer is implemented (“Interim Period”),
Vividend shall not directly or indirectly solicit any alternative proposal to the Proposed
Transaction and is further precluded from approving or recommending any alternative
proposal or the entering of any agreement in respect of any alternative proposal, save for
any bona fide unsolicited offer that is on terms that are more favourable to Vividend
Linked Unitholders than the Offer.
7.2 Notwithstanding the aforegoing, Vividend and the Vividend Independent Board will not be
prevented from complying with any requirements imposed by law or the rules of any
regulatory body in respect of any alternative proposal.
7.3 Vividend undertakes that during the Interim Period, it shall carry on its business in the
ordinary and regular course.
7.4 Arrowhead undertakes that, during the Interim Period, it shall not effect any subdivisions
of its linked unit capital or any capital distributions without first having agreed an
appropriate amendment to the Scheme Consideration with Vividend.
7.5 Between the date of signing of the Implementation Agreement and the fifth business day
before the date of the Scheme Meetings, Arrowhead and Vividend are obliged to advise
the other party of any Material Adverse Change relating to them.
8. FUNDING OF THE PROPOSED TRANSACTION
Arrowhead has an authorised share capital of 2,000,000,000 ordinary shares which translates
into an authorised linked unit capital of 1,000,000,000 Arrowhead A Linked Units and
1,000,000,000 Arrowhead B Linked Units, respectively, and an issued share capital of
617,559,182 ordinary shares, which translates into 308,779,591 Arrowhead A Linked Units
and Arrowhead B Linked Units, respectively, as at the date of this Firm Intention
Announcement.
The Scheme, if implemented, will entitle the Scheme Participants to receive a consideration of
0,374 of an Arrowhead A Linked Unit and 0,374 of an Arrowhead B Linked Unit for every
Vividend Linked Unit disposed of pursuant to the Scheme.
If the aggregate number of Arrowhead Linked Units of either class deliverable to a Vividend
Linked Unitholder yields a fractional result then the number of Arrowhead linked units of that
class shall be rounded up to the nearest whole number if the fraction equals 0.5 or more, and
the number shall be rounded down to the nearest whole number if the fraction equals less
than 0.5 (“Rounding Convention”).
If the Scheme is implemented, a total of 68,578,661 Arrowhead A Linked Units and
68,578,661 Arrowhead B Linked Units (subject to the Rounding Convention) will be issued to
Vividend Linked Unitholders in consideration for all the Scheme Linked Units
(being183,365,403 Vividend Linked Units).
Consequently, Arrowhead has sufficient authorised but unissued linked units in order to issue
the full consideration in terms of the Scheme to Vividend Linked Unitholders if the Scheme is
approved and implemented, or in terms of the General Offer if all Vividend Linked Unitholders
accept the General Offer.
Unless the TRP rules that the Option Premium of R0.07 per Vividend Linked Unit must be
offered to all of the Scheme Participants, there is no cash consideration payable under the
Scheme. If the TRP rules that the Option Premium must be extended to all of the Scheme
Participants, then this will result in the Scheme Participants receiving an additional cash
consideration equivalent to R0.07 per Vividend Linked Unit (the “Additional Cash
Consideration”). The details of the TRP’s ruling in this regard will be published in SENS and
contained in the circular to Vividend Linked Unitholders. Arrowhead has provided the requisite
guarantees to the TRP in relation to its ability to discharge the Additional Cash Consideration
should this become applicable.
9. UNITHOLDING OF ARROWHEAD IN VIVIDEND AND CONCERT PARTIES
9.1 As at the date of this Firm Intention Announcement, Arrowhead holds 84,966,285
(31.7%) of the Vividend Linked Units in issue. Arrowhead does not hold or control
(directly or indirectly) any other Vividend Linked Units and does not have any
arrangements to acquire Vividend Linked Units, other than the Stanlib option.
9.2 As at the date of this Firm Intention Announcement, the directors of Vividend hold or
control (directly or indirectly) 2,131,360 Vividend Linked Units, representing 1.2% of the
Scheme Linked Units.
9.3 With the exception of the Implementation Agreement and the Stanlib Option, no
arrangements, agreements or understandings which have any connection with or
dependence on the Proposed Transaction existed between Vividend, the Vividend
Linked Unitholders, Arrowhead or any person acting in concert with it, or any director of
Vividend or any person who was a director of Vividend within the period commencing
12 months prior to the date of this Firm Intention Announcement, or any person who is or
was a Vividend Linked Unitholder within the abovementioned period.
10. IRREVOCABLE UNDERTAKINGS
As indicated above, Arrowhead has received an irrevocable undertaking from Stanlib, which
controls 60.2 million Vividend Linked Units (representing approximately 22% of the issued
Vividend Linked Units, and approximately 32%of the issued Vividend Linked Units which
Arrowhead does not already own) to vote in favour of the Scheme Resolutions.
11. INDEPENDENT BOARD AND FAIR AND REASONABLE OPINION
The Vividend Independent Board, comprising Solomon Slom, Zithulele Luke Combi and Brian
Bank, has appointed Questco Proprietary Limited, an independent adviser acceptable to the
TRP, as the independent expert (the “Independent Expert”) in terms of section 114(2) of the
Companies Act and the regulations published in terms of section 120 of the Companies Act
and set out in Chapter 5 of the Companies Regulations, 2011 (“Takeover Regulations”), to
provide it with external advice in relation to the Scheme and to make appropriate
recommendations to the Independent Board in the form of a fair and reasonable opinion in
terms of section 114(3) of the Companies Act and Takeover Regulation 110.
The substance of the external advice received from the Independent Expert and the views of
the Vividend Independent Board will be detailed in the Scheme Circular.
12. CIRCULARS
Details of the Scheme will be included in the Scheme Circular, which will contain, inter alia, the
terms of the Scheme, a notice convening each of the Scheme Meetings, forms of proxy in
connection with the Scheme Meetings, and a form of acceptance, surrender and transfer in
respect of Vividend Linked Units. Subject to the requisite approvals being received from the
JSE, the TRP, and the Financial Surveillance Department of the South African Reserve Bank
for the posting of the Scheme Circular, the Scheme Circular is expected to be posted to
Vividend Linked Unitholders during May 2014 in accordance with the parties’ obligations in
terms of the Takeover Regulations.
The Proposed Transaction will, in terms of the JSE Listings Requirements, be categorised as
a category 1 transaction for Arrowhead, and accordingly requires the approval of Arrowhead
Linked Unitholders in general meeting. A circular to Arrowhead Linked Unitholders, providing
the requisite details of the Proposed Transaction and convening a meeting of Arrowhead
Linked Unitholders to consider and vote on the Proposed Transaction and the requisite
resolutions, will be issued as soon as practicable. Subject to the requisite approvals being
received from the JSE, for the posting of such circular, the circular is expected to be posted to
Arrowhead Linked Unitholders during May 2014.
13. UNAUDITED PRO FORMA EARNINGS AND NET ASSET VALUE EFFECTS PERTAINING
TO THE SCHEME
In addition to the Scheme Consideration, Vividend Linked Unitholders will receive the Vividend
February Distribution as well the Vividend March Distribution (by way of the Special
Distribution),.
In terms of Regulation 101(7)(b)(iv) of the Takeover Regulations, a firm intention
announcement must contain inter alia, the pro forma earnings and asset value per offeree
regulated company security if the offer consideration consists wholly or partly of offeror
securities.
The pro forma financial effects of the Scheme for Vividend Linked Unitholders are provided for
illustrative purposes only to provide information about how the Scheme may have affected the
financial performance and position of Vividend, and because of their nature, may not fairly
represent Vividend’s financial performance and position after the Scheme. Only the Vividend
Independent Board is responsible for the preparation of such pro forma financial effects.
The pro forma adjustments to the statement of comprehensive income have been calculated
on the assumption that the operative date of the Scheme was on 1 September 2012,
illustrating the effect of 1 Vividend Linked Unit being exchanged for 0,374 of an Arrowhead
A Linked Unit and 0,374 of an Arrowhead B Linked Unit, and, for the purposes of the
statement of financial position, as if the operative date of the Scheme was on 31 August 2013.
The table below sets out the pro forma financial effects of the Scheme based on the
12 months results of Vividend to 31 August2013:
Before After the Change
the Scheme2 %
Scheme1
Basic earnings per linked unit (cents) 10.97 84.70 672%
Headline earnings per linked unit (cents) 54.22 50.41 (7%)
Distribution per linked unit (cents) 50.00 41.30 (17%)
Net asset value per linked unit (cents) 515 475 (8%)
Tangible net asset value per linked unit (cents) 515 462 (10%)
Weighted average number of linked units in issue (‘000) 215,586 80,629
Number of linked units in issue (‘000) 267,678 100,112
Notes and assumptions:
1. The financial information in the “Before the Scheme” column has been prepared based on
the 12 month results for Vividend to 31 August 2013, as extracted from Vividend’s audited
results for the twelve months ended 31 August 2013.
2. The financial information in the “After the Scheme” column is based on Arrowhead’s
financial effects pursuant to the Proposed Transaction (for the 12 months ended
30 September 2013) and multiplying these results by 0.374 to provide the pro forma
financial effects for Vividend Linked Unitholders.
14. WITHDRAWAL OF VIVIDEND CAUTIONARY ANNOUNCEMENT
Following the release of this Firm Intention Announcement, the joint cautionary announcement
published by Vividend and Arrowhead on 24 February 2014 is withdrawn and caution is no
longer required to be exercised by Vividend Linked Unitholders when dealing in their Vividend
Linked Units. Arrowhead Linked Unitholders are referred to the unrelated cautionary
announcement released on 19 March 2014 which remains in place.
15. VIVIDEND RESPONSIBILITY STATEMENT
The Vividend Independent Board (to the extent that the information in this Firm Intention
Announcement relates to Vividend) accepts responsibility for the information contained in this
Firm Intention Announcement and confirms that, to the best of the respective knowledge and
belief of the members of the Vividend Independent Board, the information is true and does not
omit anything likely to affect the importance of the information included. The financial
information contained in this Firm Intention Announcement has not been reviewed or reported
on by the external auditors of Vividend.
16. ARROWHEAD RESPONSIBILITY STATEMENT
Arrowhead’s board of directors (to the extent that the information in this Firm Intention
Announcement relates to Arrowhead) accepts responsibility for the information contained in
this Firm Intention Announcement and confirms that, to the best of the respective knowledge
and belief of the members of the Arrowhead board, the information is true and does not omit
anything likely to affect the importance of the information included. The financial information
contained in this Firm Intention Announcement has not been reviewed or reported on by the
external auditors of Arrowhead.
1 April 2014
Sponsor and Corporate Advisor to Arrowhead
Java Capital
Legal Advisor to Arrowhead
DLA Cliffe Dekker Hofmeyr
Sponsor and Corporate Advisor to Vividend
PSG Capital
Legal Advisor to Vividend
Fluxmans Inc
Date: 01/04/2014 09:33:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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