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Terms Announcement: inter alia issue of shares for cash, claw-back offer, withdrawal of cautionary
CROOKES BROTHERS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1913/000290/06)
Share code: CKS
ISIN: ZAE000001434
(“Crookes Brothers” or “the Company”)
CROOKES BROTHERS: DETAILED TERMS ANNOUNCEMENT RELATING TO:
- AN ISSUE OF SHARES AND A CLAW-BACK OFFER;
- A WAIVER OF MANDATORY OFFER;
- A REQUIREMENT TO MAKE AN OBLIGATORY OFFER;
- A NOTICE OF GENERAL MEETING; AND
- A WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT.
1. INTRODUCTION
1.1. Further to the cautionary announcement published by the Company on the Stock Exchange News
Service (“SENS”) of the JSE Limited (“JSE”) dated 22 April 2015 and the subsequent renewal
thereof published on SENS on 5 June 2015 (“Cautionary Announcement”), shareholders of
Crookes Brothers (“Shareholders”) are hereby advised that Crookes Brothers intends to raise R215
million to fund its growth strategy in Sub-Saharan Africa.
1.2. Crookes Brothers and Silverlands (SA) Plantations S.ár.l, a société á responsabilité limitée
registered in Luxembourg, and a material shareholder of the Company, (“Silverlands”) have entered
into a subscription agreement dated 25 June 2015 (“Subscription Agreement”) in terms of which
Silverlands will subscribe for a maximum of 2 687 500 ordinary shares in the share capital of the
Company (“Subscription Shares”), at an issue price of R80 per Subscription Share (“Silverlands
Share Issue”).
1.3. The Silverlands Share Issue will be implemented by way of a claw-back rights offer (“Claw-back
Offer”). In terms of the Claw-back Offer, prior to allotting the Subscription Shares, Shareholders will
be afforded the opportunity to “claw back” (or subscribe for) their pro rata portion of the Subscription
Shares, upon the same terms as the Silverlands Share Issue, which will enable them to maintain
their current percentage shareholding in the Company, should they elect to do so.
1.4. At the date of this announcement, Silverlands holds 33.05% of the voting rights attached to the
securities of the Company (“Voting Rights”) and depending on the outcome of the Silverlands
Share Issue and the Claw-back Offer, Silverlands’ total shareholding of the Voting Rights, as a
percentage of the total issued share capital of Crookes Brothers, may equal or exceed 35%.
1.5. In terms of section 123 of the Companies Act, No 71 of 2008, as amended (“the Companies Act”), if
as a result of the Silverlands Share Issue and the Claw-back Offer, the percentage of Voting Rights
held by Silverlands equals or exceeds 35%, Silverlands will be obliged to make a mandatory offer to
Shareholders (the “Remaining Shareholders”), other than Silverlands and any Shareholders
(i) related or inter-related to Silverlands; and/or (ii) acting in concert with Silverlands or any
Shareholders related or inter-related to it (the “Silverlands Affected Parties”), to acquire their
Crookes Brothers shares for an equivalent cash consideration (“Mandatory Offer”), unless the
Mandatory Offer is waived by those Shareholders which are independent of Silverlands and the
Silverlands Affected Parties (the “Independent Shareholders”), in accordance with regulation 86(4)
of the Takeover Regulations (“Waiver”).
1.6. Silverlands is not able or willing to make a Mandatory Offer and has accordingly agreed the terms of
the Silverlands Share Issue on the basis that it is subject to the approval of the Waiver as
contemplated in paragraph 1.5 above. The Silverlands Share Issue is subject to the prior
implementation of the Claw-back Offer and, as such, and by inference, is also subject to those
conditions precedent set out at paragraph 3.2.5 below.
2. WAIVER OF MANDATORY OFFER
2.1. The Takeover Regulation Panel (“TR Panel”) has advised that it is willing to consider an application
to grant dispensation to Silverlands for the Waiver (“TR Panel Dispensation”), provided that:
2.1.1. the Waiver is approved by Independent Shareholders by way of an ordinary resolution
(requiring the support of more than 50% of the voting rights exercisable on the
resolution, and provided that such is passed with reference to the votes of the
Independent Shareholders only) (“Waiver Resolution”); and
2.1.2. the TR Panel considering any valid objections or representations (if any) made by
Independent Shareholders as contemplated in paragraph 2.2 below.
2.2. Any Independent Shareholder who wishes to object to the TR Panel Dispensation shall have 10
business days from the date of posting of the circular detailing the Waiver Resolution (“Waiver
Circular”), to raise any such objection with the TR Panel. The procedure for making objections will
be detailed in the Waiver Circular.
2.3. In accordance with regulation 86(7) of the Takeover Regulations, the Waiver Circular will also
include a fair and reasonable opinion prepared by an independent expert.
2.4. In terms of Guideline 1/2013 issued by the TR Panel, Crookes Brothers may approach 5 or less
Independent Shareholders each holding more than 5% of the issued share capital of Crookes
Brothers to obtain irrevocable undertakings in favour of the Waiver, subject to stringent non-
disclosure requirements. Given the Company’s current spread of Shareholders and the fact that very
few meet the aforesaid criteria, the TR Panel has exercised its discretion to allow Crookes Brothers
to approach 10 or less Independent Shareholders each holding more than 1% of the issued share
capital of the Company.
Crookes Brothers has consequently requested and received irrevocable undertakings / letters of
intent in favour of the Waiver from the following Independent Shareholders representing 16.32% of
the required vote to implement the Waiver:
NUMBER OF SHARES % HOLDING IN
SHAREHOLDER HELD CROOKES
BROTHERS
Ellingham Estate (Pty) Ltd 840 000 6.68%
SBSA ITF Oasis Prop EQ UT FND 503 856 4.01%
PM Oehley Children Trust 200 000 1.59%
Mrs Jennifer Rosemary Howson 178 000 1.42%
SCB ATF Old Mutual Albaraka Equity Fund 177 746 1.41%
The Elizabeth Crookes Trust 152 400 1.21%
TOTAL 2 052 002 16.32%
3. THE CLAW-BACK OFFER
3.1. The Crookes Brothers board (“Board”) has proposed that the capitalisation of the Company be
implemented by way of the Silverlands Share Issue and the Claw-back Offer as contemplated in
paragraphs 1.2 and 1.3 above. The rationale for the Silverlands Share Issue and the Claw-back
Offer is primarily to raise R215 million in capital in order for the Company to realise, inter alia, the
following long and short-term goals:
3.1.1. retire up to R100 million in debt;
3.1.2. complete Phase 1 of the Company’s Renishaw Property Development project;
3.1.3. complete the Company’s Murrimo Macadamia Development project; and
3.1.4. pursue other identified projects.
3.2. Salient terms of the Claw-back Offer
3.2.1. In terms of the Claw-back Offer, Shareholders and/or their renouncees will be offered
the right to “claw-back” (or subscribe for) their pro rata portion of the Subscription
Shares (based on their shareholding on the Claw-back Offer record date). The Claw-
back Offer will be made on substantially the same terms as the Silverlands Issue and,
as such, a total of 2 687 500 shares (“Claw-back Offer Shares”) will be available in
terms of the Claw-back Offer at a Claw-back Offer price of R80 per Claw-back Share
(“Claw-back Offer Price”). The ratio of entitlement in respect of the Claw-back Offer
is 21.36868 Claw-back Offer Shares for every 100 shares held on the Claw-back Offer
record date.
3.2.2. The Claw Back Offer will not include the right for Shareholders to apply for excess
Claw-back Offer Shares.
3.2.3. The Claw-back Offer Price represents a premium of 23.66970% to the 30 day volume
weighted average traded price of the Company’s shares on the JSE up to and
including 24 June 2015 of R64.68844, being the day prior to the publication of this
announcement.
3.2.4. Full details of the Claw-back Offer will be included in a further announcement and
Claw-back Offer circular which will be distributed to Shareholders in due course
(“Claw-back Offer Circular”).
3.2.5. Conditions Precedent
The implementation of the Claw-back Offer as contemplated in this announcement is
subject to the fulfilment of the following conditions precedent:
3.2.5.1. that whatever unconditional approvals, consents, exemptions, waivers or compliance
certificates as may be required to be obtained from the TR Panel, the JSE and the
Financial Surveillance Department of the South African Reserve Bank, or its duly
authorised agent, are received or obtained (to the extent required) for the Waiver of
the Mandatory Offer, the Silverlands Share Issue and the Claw-back Offer, and/or the
implementation of any of them (including, among others, the approval of all
documents/circulars in relation thereto), or if any such approvals, consents,
exemptions, waivers or compliance certificates are conditional, such conditions being
satisfactory to Crookes Brothers and Silverlands;
3.2.5.2. the Independent Shareholders approving the Waiver of the Mandatory Offer in general
meeting (present in person or represented by proxy);
3.2.5.3. the TR Panel granting the TR Panel Dispensation; and
3.2.5.4. applicable competition authority approvals.
4. REQUIREMENT TO MAKE AN OBLIGATORY OFFER
4.1. In addition to the Subscription Agreement, Crookes Brothers and Silverlands have concluded an
obligatory offer agreement dated 25 June 2015 (“the Obligatory Offer Agreement”), in terms of
which it was agreed that if Silverlands:
4.1.1. acting alone; or
4.1.2. acting in concert with any person; and/or
4.1.3. acting with any a related party,
acquires a beneficial interest in the Voting Rights in Crookes Brothers (the date of such acquisition,
subject to the remainder of this paragraph, the “Trigger Date”); and before that acquisition
Silverlands and any of the concert parties or related parties (if any) together (the “Acquiring
Parties”) were able to exercise Voting Rights in respect of less than 45% of the total Voting Rights,
and as a result of that acquisition, the Acquiring Parties are able to exercise Voting Rights equal to
or more than 45% of the total Voting Rights (the “Obligatory Offer Threshold”), then, subject to the
remaining provisions of this paragraph 4, Silverlands will be obliged, within 20 business days
thereafter, to express to the Board a firm intention to make a written offer to acquire all of the shares
held by the Remaining Shareholders, as contemplated in section 117(1)(c)(v) of the Companies Act
(an “Obligatory Offer”).
4.2. Silverlands will not be obliged to make an Obligatory Offer where the Voting Rights which the
Acquiring Parties have acquired and are able to exercise equals or exceeds 45% of all the Voting
Rights by reason of Crookes Brothers issuing additional shares to an Acquiring Party as
consideration for an asset acquired from such Acquiring Party.
4.3. Further, where the Voting Rights which the Acquiring Parties have acquired and are able to exercise
equals or exceeds the Obligatory Offer Threshold by reason of:
4.3.1. Crookes Brothers reacquiring any of its own shares; and/or
4.3.2. by reason of any action or omission taken by any Acquiring Party in following its rights
to acquire more shares (by example, where Crookes Brothers issues a scrip
dividend),
then Silverlands will be given the opportunity, for a period of 30 days (“Interim Period”) to dispose of
so many Voting Rights as will ensure that the Voting Rights that the Acquiring Parties are able to
exercise are less than the Obligatory Offer Threshold (“Excess Rights”). If Silverlands has not
disposed of the Excess Rights by the end of the Interim Period, Crookes Brothers shall be entitled to
buy back from Silverlands (and Silverlands will be obliged to sell) so many shares, at the 30 day
volume weighted average price as at the Trigger Date, as will ensure that the Acquiring Parties are
only able to exercise Voting Rights less than the Obligatory Offer Threshold (the “Excess Shares”).
Crookes Brothers shall, if it wishes to buy back shares from Silverlands as set out above, make its
election to do so within 20 Business Days after the elapse of the Interim Period, by giving written
notice to that effect to Silverlands. If Crookes Brothers gives such written notice, then it shall, as
soon as reasonably possible thereafter, but in any event within six months after the end of the
Interim Period, do all such things as may be required to give effect to the buy back, including
obtaining any required shareholder approvals. Where Crookes Brothers elects not to buy back the
Excess Shares, or, having elected to buy back the Excess Shares, fails for any reason to buy back
the Excess Shares within the six month period provided therefor, then, no Trigger Event shall be
deemed to occur and there shall be no further consequences for Silverlands in relation to it, together
with any other Acquiring Parties, being able to exercise Voting Rights equal to and/or in excess of
the Obligatory Offer Threshold.
4.4. It was further agreed in the Obligatory Offer Agreement that Crookes Brothers will amend its
memorandum of incorporation (“MOI”) in terms of which the provisions relating to the Obligatory
Offer will be included as a term in the Company’s MOI (“the Obligatory Offer MOI Amendment”).
4.5. For the avoidance of doubt, Silverlands' obligations to make the Obligatory Offer and the Obligatory
Offer MOI Amendment will not take effect unless, immediately subsequent to the Silverlands Share
Issue and the Claw-back Offer, the percentage Voting Rights which Silverlands is beneficially able to
exercise, as percentage of all Voting Rights associated with the voting securities of the Company,
equals or exceeds 35%.
4.6. The Obligatory Offer MOI Amendment is subject to the following:
4.6.1. the Issuer Regulation Division of the JSE approving the Obligatory Offer MOI
Amendment; and
4.6.2. the Shareholders of Crookes Brother approving the Obligatory Offer MOI Amendment
in general meeting (present in person or represented by proxy) by way of a special
resolution.
4.7. In support of the condition referred to in paragraph 4.6.2 above, Silverlands has granted an
irrevocable undertaking to the Company to vote in favour of the Obligatory Offer MOI Amendment.
5. GENERAL MEETING
5.1. The Waiver Circular, containing a notice convening a general meeting of Shareholders to be held at
14:00 on Thursday, 30 July 2015, at KwaShukela in the South African Sugar Association Complex,
170 Flanders Drive, Mount Edgecombe, Kwazulu-Natal (“General Meeting”), to consider the Waiver
Resolution and Obligatory Offer MOI Amendment, will be distributed to Shareholders on or about
Wednesday, 1 July 2015.
5.2. The salient dates and times relating to the General Meeting are as follows:
2015
Record date in order to receive the Waiver Circular and the notice of General Friday, 26 June
Meeting
Waiver Circular and notice of General Meeting distributed to Shareholders Wednesday, 1 July
Last day to lodge objections with the TR Panel at 12:00 Wednesday, 15 July
Last day to trade in order to be eligible to vote at the General Meeting Friday, 17 July
Record date in relation to voting at the General Meeting Friday, 24 July
Last day to lodge forms of proxy in respect of the General Meeting by 14:00 Tuesday, 28 July
General Meeting to be held at 14:00 Thursday, 30 July
Results of the General Meeting published on SENS Thursday, 30 July
Notes:
1. The above dates and times are subject to amendment. Any material variation of the above dates and times will
be published on SENS.
2. All times referred to in this announcement are local times in South Africa.
6. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Further to the publication of the Cautionary Announcement, Shareholders are hereby advised that as the
terms of the Waiver and the Claw-back Offer have now been communicated to the market, caution is no
longer required to be exercised by Shareholders when trading in the Company’s securities and accordingly
the Cautionary Announcement is hereby withdrawn.
25 June 2015
Sponsor and Corporate Advisor
Sasfin Capital
(a division of Sasfin Bank Limited)
Legal Advisors of the Company
Norton Rose Fulbright South Africa Incorporated
Legal Advisors of Silverlands
Cliffe Dekker Hofmeyr Incorporated
Independent Expert
Grindrod Bank Limited
Date: 25/06/2015 12:15:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
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