Wrap Text
Joint announcement of the Firm Intention of Novatel to make an offer to acquire all the ordinary shares in Digicore
DIGICORE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/012601/06)
Share code: DGC
ISIN: ZAE000016945
("Digicore" or “the Company”)
NOVATEL WIRELESS INC
(Incorporated under the laws of the State of Delaware, United
States of America with registration number 2614230)
NASDAQ share code: MIFI
("Novatel")
JOINT ANNOUNCEMENT OF THE FIRM INTENTION OF NOVATEL TO MAKE AN
OFFER TO ACQUIRE ALL THE ORDINARY SHARES IN DIGICORE (SAVE FOR ANY
TREASURY SHARES AND THE TRUST SHARES), BY WAY OF A SCHEME OF
ARRANGEMENT OR SUBSTITUTE OFFER
1. INTRODUCTION
1.1 Shareholders of Digicore (“Shareholders”) are referred to
Digicore’s updated detailed cautionary announcement dated
5 June 2015 and are advised that Digicore has entered into a
transaction implementation agreement with Novatel dated
Thursday, 18 June 2015 (“Implementation Agreement”) which
constitutes notification to the Digicore board of directors
(“Digicore Board”) of a firm intention from Novatel to make
an offer to acquire (either itself or through a subsidiary)
all the ordinary shares in Digicore (“Ordinary Shares”),
other than any Ordinary Shares held by any subsidiaries of
Digicore (“Treasury Shares”) and the Ordinary Shares held by
the Digicore Holdings Limited Share Trust (“Trust Shares”)
(collectively the “Excluded Shares”), by way of a scheme of
arrangement (“the Scheme”) or, if specified conditions of the
Scheme should not be fulfilled, to acquire all or a majority
of the Ordinary Shares, excluding the Excluded Shares, by way
of a substitute offer (“the Substitute Offer”), with the
Ordinary Shares to be so acquired being referred to hereafter
as “Scheme Shares” (the Scheme and the Substitute offer,
together with the Employee Option Offer described below,
collectively as “the Transaction”).
1.2 Shareholders are further advised that the Digicore Board has
established an independent board (“Independent Board”) to
provide the opinion as required by the Companies Regulations,
2011 (“the Companies Regulations”) promulgated in terms of
the Companies Act 71 of 2008 (“Companies Act”).
1.3 The purpose of this announcement is to advise Shareholders of
the terms and conditions of the Implementation Agreement.
2. BACKGROUND IN RESPECT OF NOVATEL
2.1 Novatel is a leader in the design and development of M2M
wireless solutions based on 3G and 4G technologies. Novatel
delivers Internet of Things (IoT) and Cloud SaaS services to
carriers, distributors, retailers, OEMs and vertical markets
worldwide. Product lines include MiFi Mobile Hotspots, USB
modems, Expedite and Enabler embedded modules, Mobile
Tracking Solutions and Asset Tracking Solutions. These
innovative products provide anywhere, anytime communications
solutions for consumers and enterprises.
2.2 Novatel is incorporated in the State of Delaware, USA.
Novatel’s headquarters are in San Diego, California and
Novatel’s securities are listed on the NASDAQ exchange.
3. RATIONALE
3.1 Rationale for Novatel
Digicore specialises in the research, development,
manufacturing, sales and marketing of telematics tools used
for fleet management and consumer and enterprise-level
vehicle tracking for an international client base. Novatel
believes that its acquisition of Digicore would establish
Novatel's position as a significant player in the global
asset tracking and management market, and would provide
immediate top-line contribution and meaningful earnings
contribution in 2016.
3.2 Rationale for Digicore
3.2.1 The scheme consideration of R4.40 per Scheme Share,
represents a premium of 67.9% to the 30-day volume weighted
average traded price of Digicore of R2.62 per Ordinary
Share, as at 7 May 2015. See paragraph 5.1 below in
this regard.
3.2.2 The Transaction will provide Shareholders with an
opportunity to dispose of their Scheme Shares at a
substantial premium, accordingly the Independent Board
believes that it is in the interest of Digicore and the
Shareholders that they be given an opportunity to consider
the Scheme.
3.2.3 The Independent Board’s opinion in connection with the
Scheme and Substitute Offer will be communicated to
Shareholders in due course.
4. THE SCHEME
4.1 The Scheme will constitute an “affected transaction” as
defined in section 117(1)(c) of the Companies Act. It will
be implemented in accordance with the Companies Act, the
Companies Regulations (which include the takeover regulations
prescribed by the Minister of Trade and Industry in terms of
section 120 of the Companies Act (“Takeover Regulations) and
will be regulated by the Takeover Regulation Panel (“TRP”).
4.2 The Scheme will be implemented by way of a scheme of
arrangement in terms of sections 114 and 115 of the Companies
Act to be proposed by the Digicore Board between Digicore and
the Shareholders (other than the holders of the Excluded
Shares).
4.3 The posting of the scheme circular to Shareholders, in
relation to the Scheme, and of the documents setting out the
full terms and conditions of the Scheme and the Substitute
Offer, including any report, opinion, form of proxy,
acceptance forms, notice or other document required in
connection with the Scheme and the Substitute Offer
(collectively, “Scheme Documents”) is subject to the
fulfilment or, where applicable, waiver or deferral, of the
conditions precedent set out in paragraph 5.2 below ("Pre-
Conditions").
4.4 The Scheme will be subject to the fulfilment (or, where
applicable, waiver) of the conditions precedent set out in
paragraph 6 below ("Conditions").
5. MATERIAL TERMS AND PRE-CONDITIONS
5.1 Material terms of the Implementation Agreement
5.1.1 Pursuant to implementation of the Scheme –
5.1.1.1 Novatel will acquire all of the Scheme Shares, and as a
consequence Digicore will become a subsidiary of Novatel;
5.1.1.2 Shareholders will receive the scheme consideration of
R4.40 for every Scheme Share disposed of in terms of the
Scheme (“Scheme Consideration”), subject to a maximum
consideration payable by Novatel of R1 094 223 363.20
(being R4.40 times 248 687 128, being the current
aggregate number of issued Ordinary Shares).
5.1.2 The Scheme Consideration represents a premium of 67.9% to
the 30-day volume weighted average traded price of Digicore
of R2.62 per Ordinary Share, as at 7 May 2015.
5.2 Pre-Conditions
5.2.1 The posting of the Scheme Documents is subject to the
fulfilment or, where applicable, waiver or deferral by
Novatel, by no later than 30 South African business days
(that is excluding Saturdays, Sundays and statutory public
holidays in South Africa) (“Business Day”) after the
signature date of the Implementation Agreement, being
Thursday, 18 June 2015 (“Signature Date”), or by such later
date, no later than 45 Business Days after the Signature
Date, as Digicore or Novatel may stipulate in writing, or
by such other date as Digicore and Novatel may agree upon
in writing, of the following Pre-Conditions –
5.2.1.1 that each of several specified employees of Digicore and
its subsidiary companies (“Group Companies”) has, to the
extent he is party to a “change of control agreement”, or
any other agreement or arrangement with any of the Group
Companies which provides for certain rights or benefits
in the event of a change of control of Digicore, waived
all such rights or benefits arising under that agreement
or arrangement, or such rights and benefits have
otherwise terminated;
5.2.1.2 that each holder of employee options (“Employee Options”)
in terms of the scheme (“Employee Option Scheme”) as
defined in the trust deed of the Digicore Holdings
Limited Share Trust (“Employee Option Deed”) has
irrevocably agreed in writing to accept the Employee
Option Offer contemplated in paragraph 9.1 below if and
when made, and has (i) conditionally waived all his right
title and interest in and to all his Employee Options and
(ii) waived all rights to receive a comparable offer in
terms of section 125 of the Companies Act read with
Regulation 87 of the Companies Regulations (“Comparable
Offer”) from Novatel in respect of his Employee Options;
5.2.1.3 that the TRP has either –
5.2.1.3.1 granted Novatel an exemption in terms of section 119(6)
of the Companies Act from the obligation to make a
Comparable Offer in respect of the Employee Options; or
5.2.1.3.2 confirmed in writing that –
5.2.1.3.2.1 if the approach to the Employee Option Offer in
paragraph 9.2.1 below were elected by Novatel, there
would be no requirement for a Comparable Offer to be
made; or
5.2.1.3.2.2 the making of the Employee Option Offer as may be
proposed by Novatel in terms of paragraph 9.2.2 would
discharge the obligations of Novatel to make a
Comparable Offer;
5.2.1.4 that, as at the date of fulfilment of each of the other
Pre-Conditions, Shareholders remain bound by, and are not
in breach of, written irrevocable undertakings in favour
of Novatel, inter alia, to vote in favour of the Scheme
and to accept the Substitute Offer if made, in respect of
Ordinary Shares comprising more than 50% of the voting
rights exercisable at the Shareholders’ meeting (“Scheme
Meeting”) convened in order for the Shareholders to
consider and approve the special resolution to approve
the Scheme as contemplated in section 115(2)(a) of the
Companies Act (“Transaction Resolution”);
5.2.1.5 that each of the counterparties to a specified set of
contracts concluded with a Group Company that has a
change in control provision in such contract (“Material
Counterparties”):
5.2.1.5.1 consents to the change in shareholding in Digicore
which will result from the implementation of the
transaction (to the extent required);
5.2.1.5.2 consents to the change in the constitution of the
Digicore Board which will result from the
implementation of the transaction (to the extent
required); and/or
5.2.1.5.3 provides any other consent required from it by virtue
of the entering into of the Implementation Agreement
and/or the implementation of any of the matters
contemplated in the Implementation Agreement,
in order to prevent the breach, default, acceleration,
termination or amendment of any agreement between any of
the Material Counterparties, on the one hand, and any
Group Company, on the other hand, or other adverse effect
on any Group Company arising from such relationship;
5.2.1.6 that Digicore provides a written certificate, signed by a
duly authorised Digicore director, to Novatel that, to
Digicore’s knowledge, no Company Material Adverse Change
(as defined in the Implementation Agreement) has
occurred, provided that if, to Digicore’s knowledge, no
Company Material Adverse Change has occurred immediately
prior to the fulfilment of the other Pre-Conditions other
than that in paragraph 5.2.1.4, Digicore shall be obliged
to deliver such certificate;
5.2.1.7 that the Scheme Documents be approved by the TRP and (to
the extent required) by the JSE and the Financial
Surveillance Department of the South African Reserve Bank
in terms of the South African Exchange Control
Regulations (promulgated in terms of the South African
Currency and Exchanges Act, No. 9 of 1933);
5.2.1.8 that an independent expert, appointed by the Independent
Board, furnishes an independent expert report and “fair
and reasonable opinion” in relation to the Scheme and the
Substitute Offer, as required by and in compliance with
the Takeover Regulations, confirming, among other things,
that the Scheme Consideration to be discharged in terms
thereof is fair and reasonable to Shareholders and that,
if a “Comparable Offer” as contemplated in the Takeover
Regulations is required to be made in respect of the
Employee Options, the arrangements in respect of holders
of Employee Options are fair and reasonable; and
5.2.1.9 that, upon receipt of the independent expert report and
opinion contemplated in paragraph 5.2.1.8, the
Independent Board forms the requisite opinion as required
by and in compliance with the Takeover Regulations, on
the basis of which the Independent Board resolves
unanimously to recommend to Shareholders to vote in
favour of the Scheme and (if applicable) to holders of
Ordinary Shares to accept the Substitute Offer and, if a
Comparable Offer is required to be made in respect of the
Employee Options, for the holders of Employee Options to
accept the Employee Option Offer.
5.2.2 Novatel shall be entitled in writing to Digicore to waive
(in whole or in part), or defer fulfilment (in whole or in
part) of the Pre-Conditions referred to in
paragraphs 5.2.1.1, 5.2.1.2, 5.2.1.3, 5.2.1.4, 5.2.1.5,
5.2.1.6, 5.2.1.8 or 5.2.1.9. The Pre-Condition in
paragraph 5.2.1.7 is not capable of waiver or deferral.
5.2.3 If and to the extent Novatel should in writing defer
fulfilment of any Pre-Condition (or part thereof), such
Pre-Condition shall, to that extent, be a Condition of the
Scheme as if specifically set out as such in paragraph 6
and shall no longer be a Pre-Condition.
6. THE SCHEME CONDITIONS
6.1 The Scheme (and to the extent applicable, subject to
paragraph 8, the Substitute Offer) is subject to the
fulfilment or waiver, as applicable, of the following
Conditions by no later than the date falling on the 180th day
after the Signature Date, or such later date as Digicore and
Novatel agree in writing on or before the arrival of that
day, or such other date as specified in the specific
Condition:
6.1.1 the fulfilment of each such Conditions that arises by
virtue of the deferral of fulfilment of a Pre-Condition(or
part thereof) by Novatel as described in paragraph 5.2.2
above, if any;
6.1.2 the provision by Digicore of a written certificate, signed
by a duly authorised director of Digicore, to Novatel that,
to Digicore’s knowledge, no Company Material Adverse Change
has occurred, as at the date immediately prior to the
Scheme Meeting, provided that if, to Digicore’s knowledge,
no Company Material Adverse Change has occurred as at that
date, Digicore shall be obliged to deliver such
certificate;
6.1.3 the approval by the requisite majority of Shareholders of
the Transaction Resolution at the Scheme Meeting in terms
of the Companies Act and, if the provisions of section
115(2)(c) of the Companies Act become applicable:
6.1.3.1 the approval of the Scheme by the court; and
6.1.3.2 if applicable, Digicore not treating the Transaction
Resolution as a nullity as contemplated in section
115(5)(b) of the Companies Act (and Digicore agrees that
it shall not treat the Transaction Resolution as a
nullity without the prior written consent of Novatel);
6.1.4 in relation to any objection to the Scheme by Shareholders,
either:
6.1.4.1 no Shareholders give notice objecting to the Scheme as
contemplated in section 164(3) of the Companies Act and
vote against the Transaction Resolution at the Scheme
Meeting; or
6.1.4.2 if Shareholders do give notice objecting to the Scheme as
contemplated in section 164(3) of the Companies Act and
vote against the Transaction Resolution at the Scheme
Meeting, Shareholders holding no more than 5% of all of
the Ordinary Shares give such notice objecting to the
Scheme as contemplated in section 164(3) of the Companies
Act and vote against the Transaction Resolution at the
Scheme Meeting; or
6.1.4.3 if Shareholders do give notice objecting to the Scheme as
contemplated in section 164(3) of the Companies Act and
vote against the Transaction Resolution at the Scheme
Meeting in respect of more than 5% of all the Ordinary
Shares, such Shareholders have not exercised appraisal
rights, by giving valid demands in terms of sections
164(5) to 164(8) of the Companies Act, in respect of more
than 5% of all the Ordinary Shares within 30 Business
Days following the Scheme Meeting;
6.1.5 the following regulatory approvals, clearances and
permissions (“Clearances”) to effect and implement the
Scheme, the Substitute Offer and the Employee Option Offer
(collectively the “Transaction”) and to implement the
Implementation Agreement are granted:
6.1.5.1 the approval of the Scheme Documents by the TRP and the
issue by the TRP of a compliance certificate with respect
to the Scheme and (as applicable) the Substitute Offer in
terms of section 121(b) of the Companies Act;
6.1.5.2 approval of the competition authorities in terms of the
South African Competition Act, No. 89 of 1998 (and such
approval is no longer capable of appeal, in the absence
of condonation);
6.1.5.3 approval of the Financial Surveillance Department of the
South African Reserve Bank in terms of the South African
Exchange Control Regulations (promulgated in terms of the
South African Currency and Exchanges Act, No. 9 of 1933);
6.1.5.4 approval of the JSE, if and to the extent required;
provided that if any condition or qualification is attached
to such Clearance, Novatel may, by written notice to Digicore
within 5 Business Days of the imposition of the condition or
qualification, consent to the imposition of such condition or
qualification, whereupon the Condition shall be deemed to
have been fulfilled, and failing which the Condition shall be
deemed not to have been fulfilled;
6.1.6 the Implementation Agreement has not been terminated in
accordance with its provisions at any time prior to the
date of the fulfilment or waiver of all the remaining
Conditions set out in paragraphs 6.1.1 to 6.1.5 above.
6.2 Novatel shall be entitled to waive (in whole or in part) in
writing each Condition stipulated in paragraphs 6.1.1, 6.1.2
and 6.1.4.
6.3 The Conditions stipulated in paragraphs 6.1.3 and 6.1.6 are
not capable of waiver.
6.4 Digicore and Novatel by agreement may waive in writing, in
whole or in part, any Condition contemplated in clause 6.1.5,
save for any Condition which is required to be fulfilled in
terms of South African law or United States federal or state
law for the implementation of the Transaction.
7. SHAREHOLDING IN DIGICORE AND ACTING AS PRINCIPAL
7.1 Novatel currently does not hold, directly or indirectly, any
beneficial interest in the issued share capital of Digicore
and that it does not hold any option to purchase any shares
in Digicore.
7.2 Novatel confirms that it (or its nominated subsidiary) is the
ultimate prospective purchaser of the Scheme Shares and is
acting alone and not in concert with any party.
8. SUBSTITUTE OFFER
8.1 Should the Condition in paragraph 6.1.3 not be fulfilled or
should the Condition in paragraph 6.1.4 not be fulfilled nor
waived, then the Scheme will not become effective. The
Substitute Offer will, immediately on failure of the first of
such Conditions to fail, be deemed to have been made by
Novatel to the holders of Ordinary Shares (other than the
Excluded Shares) for Novatel or its nominated subsidiary to
acquire their Ordinary Shares for a consideration of R4.40,
subject to the maximum referred to in 5.1.1.2 (“Substitute
Offer Consideration”) by way of an offer in terms of the
Companies Act and Companies Regulations on the same terms and
conditions, mutatis mutandis, as the terms and conditions of
the Scheme and the Implementation Agreement, save that the
Substitute Offer (if made) will not be subject to the
Conditions set out in paragraphs 6.1.3 or 6.1.4, but shall be
subject to an additional condition that holders of Ordinary
Shares accept the Substitute Offer in respect of that number
of Ordinary Shares which would result in Novatel holding 90%,
or such lower percentage as Novatel may specify in writing to
Digicore from time to time, of the issued and outstanding
Ordinary Shares, which additional condition Novatel shall be
entitled to waive (“Substitute Offer Conditions”).
8.2 The obligation of Novatel to implement the Substitute Offer
(if it is made) is subject to the fulfilment or where
permissible, waiver of the Substitute Offer Conditions.
8.3 The Substitute Offer, if made, will be an affected
transaction as defined in section 117 of the Companies Act.
The Substitute Offer will be implemented in accordance with
the Companies Act, the Companies Regulations and will be
regulated by the TRP.
9. EMPLOYEE OPTION OFFER
9.1 Novatel shall, if the Pre-Conditions referred to in 5.2.1.2
and in 5.2.1.3.1 are fulfilled, make an offer, subject to
fulfilment of the Conditions, to holders of Employee Options
concurrently with the Scheme or the Substitute Offer (if it
is made) (“Employee Option Offer”) in terms of which:
9.1.1 in respect of all unvested Employee Options in respect of
which the strike price is less than the Scheme
Consideration or the Substitute Offer Consideration (“In
the Money Options”) as at the date on which the Scheme is
implemented, or if applicable, the date of final payment
under the Substitute Offer, Novatel shall grant replacement
share options in respect of shares in Novatel on terms
consistent with the pricing and exchange formulae set out
in the Implementation Agreement and which will be set out
in the Scheme Documents; and
9.1.2 on the date on which the Scheme is implemented (or, if the
Substitute Offer is made, the earliest date of payment
under the Substitute Offer), Novatel shall pay for the
benefit of each holder of an Employee Option, in respect of
each vested In The Money Option which it holds on that
date, an amount in cash equal to the Scheme Consideration
or Substitute Offer Consideration less the exercise price
of the relevant In The Money Option (with the consequence
that no payment shall be due to such holders of an Employee
Option, whenever exercisable, in respect of which the
strike price is greater than the Scheme Consideration or
the Substitute Offer Consideration (“Out the Money
Options”));
9.1.3 and as a consequence of the waivers contemplated in
5.2.1.2, all Out the Money Options shall fall away without
compensation,
provided that if the parties so agree, the offer contemplated
by this paragraph 9.1 shall be made by the Company.
9.2 If the Pre-Conditions in 5.2.1.2 and 5.2.1.3.1 are not
fulfilled but the Pre-Condition in 5.2.1.2 is waived by
Novatel in its discretion, Novatel shall be entitled to elect
by notice to Digicore either –
9.2.1 to grant, in respect of all the Employee Options,
replacement share options in respect of shares in Novatel
on terms consistent with the pricing and exchange formulae
set out in the Implementation Agreement and which will be
set out in the Scheme Documents and in accordance with the
requirements of clause 25.3.2 of the Employee Option Deed,
as a consequence of which all the Employee Options shall
lapse; or
9.2.2 to make a Comparable Offer in respect of the Employee
Options, on such terms as Novatel may propose and which
are consistent with the confirmation by the TRP
contemplated in paragraph 5.2.1.3.2.2,
in each case subject to the fulfilment of the Conditions, and if
either of the approaches in 9.2.1 or 9.2.2 is elected, that
shall comprise the Employee Option Offer.
10. CASH CONFIRMATION
The TRP has been given appropriate written confirmations as
contemplated in Regulation 111(4) of the Companies Act
Regulations, by way of a guarantee issued by The Standard Bank
of South Africa Limited up to the maximum amount stated in
5.1.1.2, that Novatel has sufficient cash resources and/or
facilities available to meet its cash commitments to
Shareholders in relation to the Scheme Consideration or (if
applicable) the Substitute Offer Consideration.
11. NON-SOLICITATION AND OTHER UNDERTAKINGS
Digicore has undertaken to Novatel that from the date of
signature of the Implementation Agreement and ending on the date
of implementation of the Scheme or date of payment in full under
the Substitute Offer, or the date on which the Implementation
Agreement or the Scheme or (if applicable) the Substitute Offer
lapses or terminates, whichever occurs earliest (“Exclusivity
Period”), it shall (and shall procure that all its Group
Companies shall) –
11.1 subject to compliance by the Company with applicable law and
regulation, negotiate and deal on an exclusive basis with
Novatel, and refrain from soliciting, encouraging,
initiating, entering into or continuing any talks,
discussions, negotiations and other communications
(“Discussions”), agreement or arrangement relating to, or
which might reasonably be expected to lead to, a Competing
Proposal* (for the avoidance of doubt the Company shall not
be in breach of the provisions of this undertaking if the
Directors engage in Discussions at any time in relation to an
unsolicited Competing Proposal to the extent required in
order to meet any statutory or other binding legal
obligation, including a) those obligations set out in
Regulation 92 or Regulation 99(4), and b) a fiduciary duty of
directors in the context of an offer as defined in section
117(1) of the Companies Act);
11.2 within 2 Business Days after receipt of any Competing
Proposal, notify Novatel in writing of the details thereof
(including details of the salient terms and conditions of,
and the identity of the person and where applicable the
identity of the holding company or controlling shareholders
of that person making, the Competing Proposal, if known or
reasonably ascertainable) and Novatel shall be entitled but
not obliged by notice in writing to the Company to increase
or revise its most recent offer to holders of Ordinary Shares
so as to match or better the Competing Proposal. The Company
shall further notify Novatel in writing within 1 Business Day
after the date on which the Company decides for the first
time to make any information available to a particular bona
fide offeror or potential offeror;
11.3 conduct their operations in the ordinary course of business,
and in this regard Digicore has provided a number of related
undertakings in relation to the conduct of its business
during the Exclusivity Period.
*For purposes of the provisions of the Implementation Agreement
referred to herein, a “Competing Proposal” is defined as “any
approach, indication of interest, proposal or offer (whether or
not subject to suspensive conditions and whether or not legally
binding) i)made by a third party which is not "acting in
concert" (as defined in the Companies Act and as determined in
terms of the Takeover Regulations) with Novatel; and ii) which
involves or possibly involves the acquisition of, or
subscription for, shares comprising, or which will comprise, 5%
or more of the issued and outstanding Ordinary Shares, or a
change of control of any Group Company, or which involves or
possibly involves a disposal of a material part of the business
or assets of any Group Company, which disposal is material in
relation to the Company on a consolidated basis”.
12. TERMINATION AND LIQUIDATED DAMAGES
12.1 The Implementation Agreement is subject to termination in
certain circumstances set out in that agreement including but
not limited to the non-fulfilment of the Pre-Conditions or
the Conditions, the occurrence of a Company Material Adverse
Change, or a material breach of the Implementation Agreement,
provided that neither party shall be entitled to terminate
the Implementation Agreement after the date on which the
“finalisation date announcement” required under the JSE
Listings Requirements is released on SENS, once all the
Conditions are fulfilled or waived.
12.2 If Novatel should terminate the Implementation Agreement
pursuant to certain specified breaches by Digicore, including
a breach of the undertakings referred to in 11.1 and 11.2
above, at a time that a Competing Proposal has been made,
which Competing Proposal is successfully implemented, Novatel
shall be entitled to payment by Digicore in an amount of
R9 500 000(without prejudice to its other rights and its
rights to prove direct damages in excess of that amount).
This amount represents less than 1% of the aggregate Scheme
Consideration.
13. IRREVOCABLE UNDERTAKINGS
Irrevocable undertakings have been given to vote in favour of
the Transaction Resolution and to accept the Substitute Offer
(if made) by the following Shareholders:
Shareholder Number of Ordinary Ordinary
Ordinary Shares Shares held Shares
held as a % of the held as a
Scheme Shares % of the
aggregate
issued
Ordinary
Shares
Stellar Capital 47 692 770 19.81% 19.18%
Partners
Limited
Riviera Trust / 38 631 842 16.04% 15.53%
NH Vlok
An undisclosed 24 729 425 10.27% 9.94%
Shareholder
Investec Wealth 7 000 000 2.91% 2.81%
and Investment
(a division of
Investec
Services
Proprietary
Limited)
Rational 26 021 776 10.81% 10.46%
Expectations
Proprietary
Limited
Total 144 075 813 59.84% 57.92%
14. INDEPENDENT BOARD, OPINION AND RECOMMENDATIONS
14.1 In accordance with the Companies Regulations, the Independent
Board, comprised of independent non-executive directors, has
been established by the Digicore Board to evaluate the
Scheme.
14.2 The Independent Board will appoint an independent expert
acceptable to the TRP to provide the Independent Board with
external advice in connection with the Scheme and the
Substitute offer, in the form of a fair and reasonable
opinion as required by and in compliance with the Takeover
Regulations. The substance of the external advice and the
opinion of the Independent Board on the Scheme will be set
out in the Scheme Documents.
15. FURTHER DOCUMENTATION AND SALIENT DATES
15.1 Further details of the Transaction will be included in the
Scheme Documents that will, subject to the fulfilment of the
Pre-Conditions, be posted in due course to Shareholders. The
Scheme Documents will, inter alia, also contain a notice of
the Scheme Meeting, a form of proxy and a form of surrender
and transfer.
15.2 The Scheme will become effective and be implemented following
the fulfilment of the Pre-Conditions and the Conditions. The
parties estimate that the date on which the Scheme Documents
will be posted to Shareholders will be 31 July 2015. The
salient dates in relation to the Scheme will be published in
due course.
16. INDEPENDENT BOARD RESPONSIBILITY STATEMENT
The Independent Board accepts responsibility for the information
contained in this announcement which relates to Digicore and
confirms that, to the best of its knowledge and belief, such
information which relates to Digicore is true and the
announcement does not omit anything likely to affect the
importance of such information.
17. NOVATEL BOARD RESPONSIBILITY STATEMENT
The board of directors of Novatel accepts responsibility for the
information contained in this announcement which relates to
Novatel and confirms that, to the best of its knowledge and
belief, such information which relates to Novatel is true and
the announcement does not omit anything likely to affect the
importance of such information.
18. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENTS
Shareholders are referred to Digicore’s cautionary announcement
dated 7 May 2015 and to its subsequent updated detailed
cautionary announcement dated 5 June 2015, and are advised that,
whereas the terms of the Scheme and Substitute Offer have now
been announced, caution is no longer required to be exercised by
Shareholders when dealing in their Digicore securities.
Centurion
19 June 2015
PSG Capital Proprietary Limited: Transaction Advisor and Sponsor to
Digicore
Cliffe Dekker Hofmeyr: Legal Advisor to Digicore
Reed Hope Philips Thomas & Cadman Inc: Legal Advisors to Novatel in
South Africa
Paul Hastings LLP: Legal Advisor to Novatel
Date: 19/06/2015 07:10:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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