ANNUITY PROPERTIES LTD - ANP/RDF - Finalisation announcement in respect of the schemes

Release Date: 05/06/2014 12:55
Code(s): ANP RDF
 
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ANP/RDF - Finalisation announcement in respect of the schemes

ANNUITY PROPERTIES LIMITED                          REDEFINE PROPERTIES LIMITED
(Incorporated in the Republic of South Africa)      (Incorporated in the Republic of South Africa)
(Registration Number 2011/145994/06)                (Registration number 1999/018591/06)
JSE share code: ANP ISIN: ZAE000165643              JSE share code: RDF ISIN: ZAE000143178
(Approved as a REIT by the JSE)                     (Approved as a REIT by the JSE)
(“Annuity”)                                         (“Redefine”)


FINALISATION ANNOUNCEMENT IN RESPECT OF THE SCHEMES


1.     FULFILMENT OF CONDITIONS PRECEDENT

       Holders of linked units of Annuity (“Annuity Linked Unitholders”) are referred to the circular issued
       to Annuity Linked Unitholders on 7 April 2014 (the “Circular”) regarding the terms on which:
       -    Redefine made an offer to acquire all the issued linked units of Annuity (“Annuity Linked
            Units”) from Annuity Linked Unitholders by way of one or more indivisibly inter-related schemes
            of arrangement (“Schemes”) in terms of sections 114 and 115 of the Companies Act 71 of
            2008, as amended; and
       -    Redefine entered into agreements with the shareholders of Annuity Asset Managers
            Proprietary Limited (“Annuity Asset Managers”) and Annuity Property Managers Proprietary
            Limited (“Annuity Property Managers”) to acquire all the ordinary shares in and shareholder
            claims against Annuity Asset Managers and Annuity Property Managers, on and with effect
            from the date of implementation of the Schemes (the "Manco Transaction"),

       as one indivisible transaction (collectively, the “Proposed Transaction”).

       Annuity Linked Unitholders are further referred to the joint announcement released on the Stock
       Exchange News Service of the JSE Limited ("SENS") on 13 May 2014 (“Announcement”) which
       advised that all resolutions required for the approval of the Schemes were unanimously passed at
       the Annuity general meetings on the same day. Unless defined, terms used in this announcement
       shall bear the same meaning as set out in the Circular.

       Annuity Linked Unitholders are hereby advised that all the remaining conditions precedent to the
       Schemes, as set out in the Announcement, have been fulfilled and, accordingly, the Proposed
       Transaction is now unconditional.

2.     SCHEME CONSIDERATION

       Annuity Linked Unitholders will receive 57.75200 Redefine linked units for every 100 Annuity Linked
       Units disposed of pursuant to the Schemes (“Scheme Consideration”). As set out in the Circular, if
       the aggregate of the Redefine linked units deliverable to an Annuity Linked Unitholder yields a
       fractional result, then the number of Redefine linked units 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.

       Annuity Linked Unitholders are advised that the Scheme Consideration will be issued ex entitlement
       to the Redefine income distribution for the six-month period ended 28 February 2014. Annuity Linked
       Unitholders will become entitled, pursuant to the Schemes, to the Redefine income distribution from
       the periods commencing 1 March 2014.

3.     DECLARATION OF SPECIAL DISTRIBUTION

       As set out in the Circular, Annuity Linked Unitholders are entitled, pursuant to the Schemes, to a
       special cash distribution by Annuity on Annuity Linked Units for the period 1 October 2013 to 28
       February 2014 (the “Special Distribution”). Accordingly, notice is hereby given of the declaration of
       the Special Distribution number 4 of 19.04500 cents per Annuity Linked Unit. The issued linked unit
       capital of Annuity at the declaration date is 236 572 769 linked units.

       In accordance with Annuity’s status as a REIT with effect from 1 April 2013, Annuity Linked
       Unitholders are advised that the Special Distribution meets the requirements of a ‘qualifying
       distribution’ for the purposes of section 25BB of the Income Tax Act, No 58 of 1962 (the “Income
       Tax Act”) with the result that:

     - qualifying distributions received by resident Annuity Linked Unitholders must be included in the
       gross income of such Annuity Linked Unitholders (as a non-exempt dividend in terms of section
       10(1)(k)(aa) of the Income Tax Act), with effect that the qualifying distribution is taxable as
       income in the hands of the Annuity Linked Unitholder. These qualifying distributions are however
       exempt from dividends withholding tax, provided that the resident Annuity Linked Unitholder has
       provided the following forms to their broker or CSDP, as the case may be, in respect of
       uncertificated linked units, or Annuity, in respect of certificated linked units:
       - a declaration that the Special Distribution is exempt from dividend tax; and
       - a written undertaking to inform Annuity, their broker or CSDP, as the case may be, should the
           circumstances affecting the exemption change or the beneficial owner cease to be the
           beneficial owner,
       both in the form prescribed by the South African Revenue Service. Annuity Linked Unitholders
       are advised to contact Annuity, their broker or CSDP, as the case may be, to arrange for the
       abovementioned documents to be submitted prior to payment of the Special Distribution, if such
       documents have not already been submitted.

     - qualifying distributions received by non-resident Annuity Linked Unitholders will not be taxable as
       income and instead will be treated as ordinary dividends but which are exempt in terms of the
       usual dividend exemptions per section 10(1)(k) of the Income Tax Act. It should be noted that
       until 31 December 2013 qualifying distributions received by non-residents were not subject to
       dividends withholding tax. From 1 January 2014, any qualifying distribution will be subject to
       dividends withholding tax at 15%, unless the rate is reduced in terms of any applicable agreement
       for the avoidance of double taxation (“DTA”) between South Africa and the country of residence
       of the Annuity Linked Unitholder. Assuming dividends withholding tax will be withheld at a rate of
       15%, the net distribution amount due to non-resident Annuity Linked Unitholders is 16.18825
       cents per Annuity Linked Unit. A reduced dividends withholding rate, in terms of the applicable
       DTA, may only be relied upon if the non-resident Annuity Linked Unitholder has provided the
       following to their broker or CSDP, as the case may be, in respect of uncertificated linked
       unitholders, or Annuity, in respect of certificated linked units:
       - a declaration that the Special Distribution is subject to a reduced rate as a result of the
            application of a DTA; and
       - a written undertaking to inform Annuity, their broker or CSDP, as the case may be, should the
            circumstances affecting the reduced rate change or the beneficial owner cease to be the
            beneficial owner,
       both in the form prescribed by the South African Revenue Service. Non-resident Annuity Linked
       Unitholders are advised to contact Annuity, their broker or CSDP, as the case may be, to arrange
       for the abovementioned documents to be submitted prior to payment of the Special Distribution, if
       such documents have not already been submitted, where applicable.

4.   SALIENT DATES AND TIMES

     The timetable for the finalisation and implementation of the Proposed Transaction, the payment of
     the Special Distribution and the termination of Annuity’s listing on the JSE is as follows:

     Action                                                                                2014

     Fulfilment Date                                                                 Thursday, 5 June
     Finalisation announcement released on SENS                                      Thursday, 5 June

     Finalisation announcement published in the South African press                  Friday, 6 June

     Last day to trade in Annuity Linked Units in order to be recorded in the
     Register on the Scheme Record Date (Scheme Last Day to Trade)                   Thursday, 12 June

     Last day to trade in Annuity Linked Units in order to be recorded in the
     Register to receive the Special Distribution                                    Thursday, 12 June

     Suspension of listing of Annuity Linked Units on the JSE                        Friday, 13 June

     Scheme Record Date on which Annuity Linked Unitholders must be
     recorded in the Register to receive the Scheme Consideration                    Friday, 20 June

     Record date on which Annuity Linked Unitholders must be recorded in
     the Register to receive the Special Distribution                                Friday, 20 June

     Operative Date of the Schemes                                                   Monday, 23 June

     Statements of allocation of Scheme Consideration posted to
     Certificated Scheme Participants (provided their Form of Surrender and
     Transfer (pink) are received on or prior to 12:00 on the Scheme Record
     Date) on or about                                                               Monday, 23 June

     Dematerialised Scheme Participants to have their accounts with their
     broker or CSDP credited with the Scheme Consideration on or about               Monday, 23 June

     Special Distribution posted to certificated Annuity Linked Unitholders on
     or about                                                                        Monday, 23 June

     Dematerialised Annuity Linked Unitholders to have their accounts with
     their broker or CSDP credited with the Special Distribution on or about         Monday, 23 June

     Implementation date of the Manco Transaction                                    Monday, 23 June

     Termination of listing of Annuity Linked Units at commencement of
     trade on the JSE                                                                Tuesday, 24 June

Notes:
1. Annuity Linked Unitholders who hold Annuity Linked Units on the Scheme Last Day to Trade
   (Thursday, 12 June 2014) will participate in the Schemes (i.e. dispose of their Annuity Linked
   Units to Redefine in accordance with the Schemes for the Scheme Consideration).
2. All times given in this announcement are local times in South Africa.
3. Annuity Linked Units may not be dematerialised or rematerialised after the Scheme Last Day to
   Trade.

Illovo
5 June 2014

Lead Investment Bank and Transaction Sponsor to Annuity
Investec Bank Limited

Joint Investment Bank and Transaction Sponsor to Annuity
Sasfin Capital (A division of Sasfin Bank Limited)

Sponsor to Annuity
RAND MERCHANT BANK (A division of FirstRand Bank Limited)

Independent Expert to Annuity
Deloitte & Touche

Legal Advisor to Annuity
Edward Nathan Sonnenbergs Inc.

Reporting accountants to Annuity and Redefine
Grant Thornton

Corporate Advisor and Sponsor to Redefine
Java Capital

Legal Advisor to Redefine
DLA Cliffe Dekker Hofmeyr Inc.

Competition Law Advisor to Redefine
Vani Chetty Competition Law

Date: 05/06/2014 12:55:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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