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Firm intention by Yebo Guma Investments Pty Ltd to acquire the remaining issued ordinary shares in Gijima
Gijima Group Limited
(Registration number 1998/021790/06)
Incorporated in the Republic of South Africa
Share code: GIJ ISIN: ZAE000176533
(“Gijima” or “the Company”)
ANNOUNCEMENT OF A FIRM INTENTION BY YEBO GUMA INVESTMENTS PROPRIETARY
LIMITED (“GUMA”) TO ACQUIRE THE REMAINING ISSUED ORDINARY SHARES IN GIJIMA
(“FIRM INTENTION ANOUNCEMENT”)
1. INTRODUCTION
The respective boards of directors of Gijima and Guma are pleased to announce that Guma
has made an offer (“the Offer”) to acquire all of the remaining shares in the issued ordinary
share capital of Gijima, being 6 930 389 Gijima shares, excluding treasury shares of 16 981
(“Offer Shares”) not already owned by Guma, Guma Tech Proprietary Limited, Guma Tech
Group Proprietary Limited, Guma Support Proprietary Limited, Guma Investment Holdings
Proprietary Limited, and Guma ICT Proprietary Limited ("Guma ICT") (the “Guma Entities”).
The Offer has been made on the basis that a scheme of arrangement (“the Scheme”), will be
proposed by Gijima between Gijima and the holders of Offer Shares (“Offer Shareholders”), in
terms of section 114(1)(c) of the Companies Act, No. 71 of 2008, as amended (“the Companies
Act”).
2. OFFER CONSIDERATION
The terms of the Offer provide that subject to the Scheme becoming unconditional and being
implemented, each Offer Shareholder will receive payment of an amount of 220 cents per Offer
Share in cash on the Scheme consideration record date (“the Offer Consideration”).
The Offer Consideration represents a 10% premium to the price of the rights offer completed
during December 2014 (“the Rights Offer”) (after adjusting for the 1 for 20 share consolidation
which became effective on 19 January 2015) and a 31% premium to the 30 day Volume
Weighted Average Price (“VWAP”) of 168 cents as of the last trading day prior to this Firm
Intention Announcement.
3. RATIONALE FOR THE SCHEME
The successful Rights Offer which raised an amount of R100 million (before expenses) was
fully underwritten by Guma ICT. Prior to the Rights Offer, the Guma Entities, other than Guma
ICT owned 46.7% of the Company’s issued shares. The Rights Offer resulted in the Guma
Entities interest in the issued shares of Gijima increasing to 88.4%, leaving the Company with a
small remaining free float of 11.6%.
Given the small remaining free float and the current status of the Company’s turnaround which
is ongoing, Guma believes it is in the best interests of the Company to be held 100% by the
Guma Entities and to delist, thereby enabling it to complete the turnaround in an unlisted
environment.
4. CONDITIONS TO THE POSTING OF THE CIRCULAR
In order to provide information of the Scheme as well as to convene a general meeting of
Gijima shareholders (“General Meeting”) to obtain Offer Shareholders approval of the Scheme
and ancillary matters, a circular (“the Circular”) is required to be sent to the Gijima shareholders
and is currently being prepared.
The posting of the Circular is subject to the fulfilment or waiver (in whole or in part by Guma as
regards the conditions in 4.1) of the following:
4.1 by no later than the intended date of issue of the Circular, a statement is made by the
independent board of directors appointed in accordance with regulation 108 of the
Takeover Regulations (“the Independent Board”), comprising of Mr Ashwin Trikamjee,
Ms Sindiswa Zilwa, Dr Mark Bussin, Ms Eileen Wilton, Mr Ernst Roth, Mr Maphum
Nxumalo and Mr Bill Hoggarth, that given the circumstances and market conditions
prevailing at that date, the Independent Board –
4.1.1 has considered the terms and conditions of the Scheme and at the time of such
statement it is, taking into account the opinion of the Independent Expert
referred to in paragraph 10 below, satisfied with the terms and conditions of the
Scheme;
4.1.2 intends to support the Scheme and to facilitate the Scheme to the extent that a
board of directors will normally be required for purposes of the implementation
of a scheme; and
4.1.3 intends to recommend that Offer Shareholders vote in favour of the Scheme;
and
4.2 the requisite approvals being received from the JSE Limited (“JSE”) and the Takeover
Regulation Panel (established in accordance with section 196 of the Companies Act)
(“the TRP”) for the posting of the Circular.
5. CONDITIONS TO THE SCHEME BECOMING OPERATIVE
The implementation of the Scheme will be subject to the fulfilment or waiver, if not required by
law or regulation, in whole or in part by Guma of the following conditions, namely that:
5.1 no distributions (as such term is defined in section 1 of the Companies Act) have been
declared and paid by the Company to Gijima shareholders, nor any increases in the share
capital of the Company nor amendments to the shares or share capital of Gijima have
been effected;
5.2 the special resolution necessary to approve the Scheme has been proposed at the
General Meeting and has been adopted by a majority representing not less than 75% of
the votes exercised by Offer Shareholders present at the General Meeting and entitled to
vote on such resolution, either in person or by proxy;
5.3 the special resolution necessary to approve the Scheme has not been opposed by 15%
or more of the entitled voting rights exercised on such resolution, or, should the resolution
have been opposed by 15% or more of the entitled voting rights exercised on it, no
person who voted against the special resolution has required Gijima to seek Court
approval in terms of section 115(3) of the Companies Act. This condition may be waived
by Guma;
5.4 if the special resolution necessary to approve the Scheme has been opposed by 15% or
more of the voting rights exercised on such resolution, and a person who voted against
the special resolution requires Gijima to seek Court approval and Guma waives the
condition precedent set out in paragraph 5.3 above, and Gijima does not elect to treat the
special resolution as a nullity in terms of section 115(5) of the Companies Act, the Court
has approved the special resolution in terms of section 115(3) of the Companies Act;
5.5 no leave to review the Scheme has been granted by the Court, on an application within
10 business days after the vote, to any person who voted against the special resolution
and who applied to the Court for a review of the Scheme in terms of section 115(7) of the
Companies Act. This condition may be waived by Guma on condition that the Court
approves the special resolution in terms of section 115(3) of the Companies Act;
5.6 within the period prescribed under section 164(7) of the Companies Act, no valid
demands have been received by Gijima in terms of such section in respect of Offer
Shares representing, in aggregate, more than 5% of the total issued share capital of the
Company. This condition may be waived by Guma on written notice to the Independent
Board to that effect;
5.7 a reputable auditing firm, as may be elected by Guma, has certified before or on the last
date for the lodgement of forms of proxy in regard to the General Meeting that, as at the
date of such certification (which shall be dated the date before the applicable date for the
lodgement of forms of proxy), there has not occurred any suspension or limitation of
trading in Gijima shares generally on the JSE or any material change in the banking or
economical position in South Africa as would absolutely preclude the implementation of
the Scheme; and
5.8 all regulatory approvals and consents necessary in respect of the Scheme, including, but
not limited to, approvals and consents from the JSE (insofar as is necessary), the TRP
and the South African Reserve Bank including the Financial Surveillance Department of
the South African Reserve Bank, are received.
6. SHAREHOLDER UNDERTAKINGS
To date, the following asset managers, collectively managing in aggregate 3 010 430 Offer
Shares, representing in aggregate 43.4% of the Offer Shares, have committed to, on behalf of
their clients, either vote in favour of, or recommend to their clients to vote in favour of the
resolutions required to approve the Scheme at the General Meeting, or any adjournment
thereof:
Number of Offer % of Offer
Shareholder
Shares Shares
Allan Gray Proprietary Limited 2 267 884 32.7%
Investec Asset Management Proprietary Limited* 443 210 6.4%
Futuregrowth Asset Management Proprietary Limited 299 336 4.3%
Total 3 010 430 43.4%
*In respect of those shares held at the time of the General Meeting.
Non-executive directors Mr Malcolm MacDonald and Mr Jacobus van der Walt who
beneficially own directly and indirectly 61 600 and 124 218 Offer Shares respectively
(representing a combined 2.68% of the Offer Shares), have also signed irrevocable
undertakings to vote in favour of the resolutions to approve the Scheme at the General
Meeting, or any adjournment thereof. Except for the aforementioned directors and Mr Robert
Matana Gumede who is not entitled to vote at the General Meeting given that Guma is a
related party to Mr Robert Matana Gumede, no other directors of the Company hold any Offer
Shares.
7. BENEFICIAL INTERESTS OF THE GUMA ENTITIES
As at the date of this announcement the Guma Entities held the following issued Shares in Gijima:
Shareholder Number of shares %
Yebo Guma Investments 38 514 913 64.3%
Guma ICT 13 340 367 22.3%
Guma Tech Proprietary Limited 537 695 0.9%
Guma Support Proprietary Limited 391 051 0.7%
Guma Investment Holdings Proprietary Limited 140 616 0.2%
Guma Tech Group Proprietary Limited 48 881 0.1%
Total 52 973 523 88.4%
Note: Mr Robert Matana Gumede has an interest in and is also a director of all the above Guma Entities.
8. CASH CONFIRMATION TO THE TRP
Guma has delivered to the TRP, in compliance with regulations 111(4) and 111(5) of the
Takeover Regulations, a cash confirmation letter from Brian Kahn Inc. Attorneys, that the full
amount payable under the Scheme is held in escrow by them.
9. TERMINATION OF THE LISTING
Following the implementation of the Scheme, application will be made to the JSE to terminate
the listing of the Gijima shares on the JSE.
10. RECOMMENDATION AND FAIRNESS OPINION
The Independent Board has appointed Grant Thornton Proprietary Limited, being an
independent adviser acceptable to the TRP (“Independent Expert”).
In accordance with section 114(3) of the Companies Act, the Independent Expert is required to
provide the Independent Board with external advice in relation to the Scheme and to make
appropriate recommendations in the form of a report contemplated.
As of the date of this Firm Intention Announcement, based on the information currently
available, the Independent Board intends to make a recommendation to Offer Shareholders to
vote in favour of the Scheme to be proposed at the General Meeting, provided that the
Independent Board receives an opinion from the Independent Expert to the effect that the Offer
Consideration payable in terms of the Scheme is fair to Offer Shareholders.
The substance of the external advice received from the Independent Expert and the final views
of the Independent Board will be detailed in the Circular.
11. DOCUMENTATION
Full details of the Scheme and its terms and conditions will be contained in the Circular which
will also contain the notice convening the General Meeting. A form of proxy as well as a form of
acceptance, surrender and transfer in respect of Offer Shares will also be contained. It is
presently anticipated that the Circular will be posted to Offer Shareholders on or about 12
March 2015.
The salient dates pertaining to the Scheme will be released on SENS and published in the
press prior to the posting of the Circular.
12. INDEPENDENT BOARD RESPONSIBILITY STATEMENT
The Independent Board accepts full responsibility for the accuracy of the information contained
in this Firm Intention Announcement to the extent that it relates to Gijima. In addition, the
Independent Board certifies that, to the best of its knowledge and belief, the information
contained in this Firm Intention Announcement as it pertains to Gijima is true and includes all
material information required by shareholders.
13. GUMA RESPONSIBILITY STATEMENT
The board of directors of Guma accepts full responsibility for the accuracy of the information
contained in this Firm Intention Announcement to the extent that it relates to Guma. In addition,
the board of directors of Guma certifies that, to the best of its knowledge and belief, the
information contained in this Firm Intention Announcement pertaining to Guma is true and
includes all material information required by shareholders.
Johannesburg
17 February 2015
Corporate Advisor and Transaction Legal Advisor to Gijima
Sponsor
Webber Wentzel
PricewaterhouseCoopers Corporate Finance
Proprietary Limited
Sponsor Legal Advisor to Guma
Rand Merchant Bank Brian Kahn Inc.
A Division of FirstRand Bank Limited
Independent Financial Expert Corporate Advisor to Guma
Grant Thornton Advisory Services Proprietary Guma Capital Proprietary Limited
Limited
Date: 17/02/2015 05:20:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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