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FIRM INTENTION OFFER BY STEINHOFF INTERNATIONAL HOLDINGS TO ILIAD AFRICA LIMITED
Iliad Africa Limited
(Incorporated in the Republic of South Africa)
(Registration number 1997/011938/06)
Share code: ILA & ISIN: ZAE000015038
("Iliad" or "the Company")
FIRM INTENTION OFFER BY STEINHOFF INTERNATIONAL HOLDINGS LIMITED TO ACQUIRE THE
ENTIRE ISSUED ORDINARY SHARE CAPITAL OF ILIAD AFRICA LIMITED AND WITHDRAWAL OF
CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
The Board of Directors of Iliad Africa Limited herewith announce that Steinhoff International Holdings
Limited (“Steinhoff”) has made an offer to acquire, through a nominated wholly owned subsidiary, the
entire issued ordinary share capital of Iliad Africa Limited ("Iliad" or "the Company") (net of treasury
shares) (“Iliad Shares”), by way of a scheme of arrangement (“Scheme”) in terms of section 114 of
the Companies Act, 2008 (Act No.71 of 2008), as amended (the “Companies Act”), to be proposed
by the Board of Directors of Iliad to the holders of the Iliad Shares (“Iliad Shareholders”).
2. TRANSACTION MECHANICS
The Scheme is envisaged to be implemented as follows, subject to the conditions precedent set out
in paragraph 4 below:
- The Scheme will be proposed in terms of section 114 of the Companies Act, as read with
section 115 of the Companies Act, the approval of which needs to be approved by means of a
special resolution, as contemplated in section 115 (2) of the Companies Act, read together
with sections 164(7) and 164(3) of the Companies Act; and
- Payment of the Offer Price (as defined in paragraph 3 below) to Iliad Shareholders, pursuant
to the Scheme, will be effected on the operative date of the Scheme.
3. OFFER CONSIDERATION
- Subject to the conditions precedent set out in paragraph 4 hereunder, the consideration
proposed in respect of the Scheme will comprise a cash consideration of R10.00 per Iliad
Share (“Offer Price”), translating to an aggregate consideration of R1 340 712 600 (“Offer
Consideration”).
- The Offer Price per Iliad Share takes into account the assumption that Iliad will distribute a
dividend of 24 cents per share prior to the Scheme becoming effective (“the Special
Dividend”).
- The Offer Price together with the Special Dividend represents a 24.6% premium to the 30 day
volume weighted average traded price (“VWAP”) calculated as at the close of trade on 15 July
2015 (“Offer Date”).
- The Offer Price together with the Special Dividend represents a 10.7% premium to the closing
price of Iliad ordinary shares on the JSE on the last practicable date before the Offer Date.
- It is recorded that Steinhoff has sufficient cash resources for the payment of the Offer
Consideration from its own resources. An irrevocable and unconditional cash confirmation in
compliance with the Takeover Regulations 111(4) (a) and 111 (5) has been provided to the
Take-Over Regulation Panel (“the TRP”).
4. CONDITIONS PRECEDENT
The Scheme is subject to the fulfilment or waiver (where applicable) of the following conditions
precedent:
- The approval of the Scheme by the requisite majority (75%) of Iliad Shareholders in a
general meeting (“General Meeting”), as contemplated in section 115(2), read together with
sections 164(7) and 164(3) of the Companies Act;
- Regulatory approvals, as may be required including:
o The South African Competition Authorities; and
o Approval of the circular to Iliad shareholders and other documents relating to the
implementation of the Scheme (“Circular”), by the JSE, the TRP and the South
African Reserve Bank;
- the Circular being posted by no later than 31 August 2015;
- to the extent required, and at the discretion of Steinhoff, the unconditional written consent is
obtained to the change of control of Iliad from counterparties to contracts with Iliad, which in
Steinhoff’s opinion is deemed material; and
- Concluding service agreements with key management of Iliad, as soon as is practically
possible, prior to the posting of the Circular.
5. RATIONALE
Iliad, through its operating divisions and subsidiaries, focuses on the sourcing, retailing and
redistribution of a comprehensive range of building materials in both the residential and non-
residential segments of the market through a well-established geographic footprint. Iliad and Steinhoff
(through its building materials business Steinbuild) operate similar businesses in complementary
geographical locations across South Africa. Iliad is of the firm view that combining the businesses of
Iliad and Steinbuild will promote the growth of both businesses and sustainably strengthen its position
in the market.
6. TERMINATION OF LISTING
Following the implementation of the Scheme, application will be made to delist Iliad from the securities
exchange operated by the JSE.
7. SHAREHOLDER UNDERTAKINGS
Steinhoff has confirmed in the firm intention that they have received irrevocable undertakings and
letters of firm support from certain Iliad Shareholders who, at the date of this announcement
collectively directly or indirectly hold or are otherwise able to control the exercise of all rights in
respect of 92 859 656 Iliad ordinary shares (being 69.26% of the Iliad Shares, net of Treasury
Shares), to vote in favour of all the resolutions to be proposed at the General Meeting in respect of the
Scheme. The undertakings were obtained from Sanlam Investment Management (Pty) Ltd, Visio
Capital Management (Pty) Ltd and Coronation Asset Management (Pty) Ltd. As at the date of this
announcement, these shareholders directly or indirectly hold or control the following shares:
Shareholder: No. of shares:
Sanlam Investment Management (Pty) Ltd 13,794,111
Visio Capital Management (Pty) Ltd 40,000,000
Coronation Asset Management (Pty) Ltd 39,065,545
Details on these undertakings will also be contained in the Circular.
8. INDEPENDENT BOARD AND FAIR AND REASONABLE OPINION
The Scheme is classified as an affected transaction in terms of the Companies Act. Accordingly, Iliad
has convened an Independent Board to consider the terms of the Scheme and the report that will be
furnished by the independent expert. The Independent Board is comprised of Mr. Andile Sangqu, Mr.
Ralph Ririe and Mr. Tapiwa Njikizana (“the Independent Board”). Iliad is also in the process of
appointing an independent expert, for the purposes of providing a Fair and Reasonable opinion on the
terms of the Scheme.
The Independent Board have considered the contents of the offer received from Steinhoff and after
due consideration recommends that Iliad Shareholders vote in favour of the resolutions to be
proposed at the General Meeting in respect of the Scheme, subject however to the Independent
Board obtaining a Fair and Reasonable opinion and concurring with the findings of the independent
expert.
The opinion of the independent expert and the formal opinion and recommendation of the
Independent Board will be included in the Circular to be distributed to Iliad shareholders.
9. INDEPENDENT BOARD RESPONSIBILITY STATEMENT
The Independent Board (to the extent that the information relates to Iliad) accept responsibility for the
information contained in this announcement, and to the best of their respective knowledge and belief,
confirm that the information is true and, where appropriate, this announcement does not omit anything
likely to affect the importance of the information included.
10.CIRCULAR TO ILIAD SHAREHOLDERS
The Circular containing details relating to the Scheme, any additional terms and notice of the General
Meeting, will be posted to Iliad shareholders by no later than 31 August 2015.
11.WITHDRAWAL OF CAUTIONARY
Following the release of this announcement, the cautionary announcement published by Iliad on 20
July 2015 is hereby withdrawn and caution is no longer required to be exercised by Iliad shareholders
when dealing in Iliad shares.
Johannesburg
23 July 2015
Sponsor and Corporate Advisor to Iliad:
Bridge Capital Advisors Proprietary Limited
Date: 23/07/2015 02:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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