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Results of the General Meeting and Details of the Offer
SOVEREIGN FOOD INVESTMENTS LIMITED
Incorporated in the Republic of South Africa
Registration Number 1995/003990/06
JSE Code: SOV
ISIN Number: ZAE000009221
(“Sovereign”)
RESULTS OF THE GENERAL MEETING AND DETAILS OF THE OFFER
Unless otherwise indicated, capitalised words and terms contained in this announcement shall bear
the same meaning ascribed thereto in the circular to Sovereign shareholders, dated 11 December 2015 (“Circular”).
ANALYSIS OF THE SHAREHOLDER VOTE
In light of numerous media reports regarding some shareholders’ views of the BEE Transaction, the
Board considered it appropriate to clarify certain aspects pertaining to the votes cast by Shareholders
at the General Meeting (“Shareholder Votes”), as this will put certain potential ongoing public
commentary in better perspective.
Persons directly or indirectly related to the controlling shareholder/s of one of Sovereign’s key
competitors (“Competitor”) (collectively referring to the aforesaid parties as the “Competitor’s
Associates”) recently acquired a significant shareholding in the Company, comprising approximately
8% of the total issued share capital of Sovereign (“Relevant Shares”).
The Competitor’s Associates, through their holding of Relevant Shares, exercised a vote amounting to
approximately 10% of the total votes cast by Shareholders in respect of the Transactions.
The greater part of the Relevant Shares were acquired by the Competitor’s Associates after the
publication of the transaction circular by Sovereign on 11 December 2015. Of the aforesaid Relevant
Shares, the bulk were acquired on the last date to trade (31 December 2015) in order to be eligible to
attend and vote at the General Meeting.
The Relevant Shares were all voted against the BEE Transaction and the Share Acquisition. The
Relevant Shares were also voted against the resolution to reduce non-executive directors’ fees, which
is specifically aimed at reducing Sovereign’s corporate overhead costs.
Furthermore, the Competitor’s Associates have informed Sovereign of their intention to exercise
Appraisal Rights (“Appraisal Rights Notice”).
The Board considers these actions, including the Appraisal Rights Notice, by the Competitor’s
Associates to be an abuse of the provisions of the Companies Act, inter alia, by:
- directly attempting to prevent Sovereign from implementing an important BEE transaction (by
voting against the BEE Transaction); and/or
- indirectly attempting to prevent Sovereign from implementing the BEE Transaction (by
artificially increasing the level of Appraisal Rights being exercised, in an apparent attempt to
cause a condition to the BEE Transaction to fail); and
- attempting to force Sovereign to repurchase Shares, most of which were acquired by the
Competitor's Associates in the open market with full knowledge of the impending
Transactions with a view to disrupting the Company's legitimate business interests and, if
failing to achieve this objective, then to weaken the Company's cash resources and balance
sheet by effectively forcing a large share buy-back under the auspices of Appraisal Rights.
The Board wishes to confirm its absolute commitment and resolve to not allow a competitor to
(directly or indirectly) negatively affect Sovereign’s shareholder value nor to unduly influence
Sovereign’s corporate strategy. This is the second time that the Competitor and/or its associates have
attempted to harm Sovereign’s legitimate business interests by acquiring Shares in the open market
in order to influence Shareholder votes. The previous attempt in 2009/10 failed.
The actions by the Competitor’s Associates materially distorted the voting results. Of Sovereign’s
total Shares in issue (excluding the Relevant Shares held by the Competitor’s Associates),
approximately 4% voted against the Transactions, indicating the landslide support which the
Transactions received from Sovereign’s Shareholders. Of all the Shares eligible to vote, more than
82% of such shares voted (either in person or via proxy) at the General Meeting, which is indicative of
the level of Shareholder participation in the decision making process relating to the Transactions. The
Board believes that this provides a different perspective to certain of the actions and negative views
extensively reported on in the media during recent months about the Transactions, which represents
a very small portion of Sovereign’s Shareholder base and is not reflective of the view of Sovereign’s
general body of Shareholders.
RESULTS OF GENERAL MEETING
Shareholders are advised that at the General Meeting held on Thursday, 14 January 2016, all of the
Resolutions were approved by the requisite majority of Shareholders present or represented by proxy
at the General Meeting.
The following table sets out the percentage of votes exercised For and Against each Resolution and
the percentage Abstained.
In the table below, the:
- Shares Voted on a Resolution are disclosed as a number and a percentage in relation to
Sovereign's total Shares in issue;
- Votes carried For and Against on a Resolution are disclosed as a percentage in relation to
the total number of Shares Voted in respect of a Resolution; and
- Shares Abstained is calculated as a percentage of Sovereign's total Shares in issue.
Shares Voted For Against Abstained
Special Resolution 61 991 633 85.2% 14.8% -
number 1: 81.3%
Specific Repurchase of
the Repurchase Shares
in terms of paragraph
5.69 of the Listings
Requirements
Special Resolution 62 916 633 85.4% 14.6% -
number 2: 82.5%
Approval of the
Scheme in terms of
sections 48(8)(b),
114(1)(c), 114(1)(e),
114(1)(f) and 115(2)(a)
of the Companies Act
Special Resolution 62 916 633 85.4% 14.6% -
number 3: 82.5%
Directors’ authority to
issue Shares in terms
of sections 41(1) and
41(3) of the Companies
Act
Special Resolution 62 916 633 85.6% 14.4% -
number 4: 82.5%
Financial assistance in
terms of sections
44(3)(a)(ii) and
45(3)(a)(ii) of the
Companies Act
Special Resolution 62 916 633 85.4% 14.6% -
number 5: 82.5%
Approval of the
Notional Funding
Repurchase in terms of
sections 48(8)(b),
114(1)(e) and 115(2)(a)
of the Companies Act
Special Resolution 61 991 633 85.2% 14.8% -
number 6: 81.3%
Specific repurchase of
Notionally Funded
Shares pursuant to the
Notional Funding
Repurchase, in terms
of paragraph 5.69 of
the Listings
Requirements
Special Resolution 62 916 633 85.4% 14.6% -
number 7: 82.5%
Approval of NED Fee
Policy in terms of
section 66(9) of the
Companies Act
Ordinary Resolution 60 690 431 84.9% 15.1% 0.005%
number 1: 79.6%
Specific issue of the
Subscription Shares in
terms of paragraph
5.51 of the Listings
Requirements
Ordinary Resolution 62 916 226 85.4% 14.6% 0.005%
number 2: 82.5%
Approval of New
Executive
Remuneration Policy
DETAILS OF THE OFFER
Shareholders are hereby advised that the Offer will open at 09:00 on Friday, 15 January 2016 and will
close at 12:00 on Friday, 26 February 2016. Shareholders are reminded that implementation of the
Repurchase (and the Scheme) remains subject to the fulfilment of certain conditions precedent as
more fully set out in the Circular.
Shareholders are requested to take note of the provisions regarding the actions required by
Shareholders, commencing on page 3 of the Circular, in relation to the election to participate in the
Offer.
Port Elizabeth
15 January 2016
Corporate advisor and sponsor
One Capital
Attorneys to Sovereign
Cliffe Dekker Hofmeyr Inc.
Date: 15/01/2016 07:07:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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