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Update regarding the Transactions approved by Shareholders at the General Meeting and proposed revisions thereto
SOVEREIGN FOOD INVESTMENTS LIMITED
Incorporated in the Republic of South Africa
Registration Number 1995/003990/06
JSE Code: SOV
ISIN Number: ZAE000009221
(“Sovereign” or the “Company”)
UPDATE REGARDING THE TRANSACTIONS APPROVED BY SHAREHOLDERS AT THE GENERAL MEETING CONVENED ON
14 JANUARY 2016 AND PROPOSED REVISIONS THERETO
Unless otherwise indicated, capitalised words and terms contained in this announcement shall
bear the same meanings ascribed thereto in the circular to Sovereign shareholders dated
11 December 2015 (“Previous Circular”).
1. INTRODUCTION
Shareholders are referred to the SENS announcement released on 15 January 2016 (“Results
Announcement”), whereby Sovereign advised Shareholders that all Resolutions proposed at the
General Meeting were passed by an overwhelming majority of Shareholders and that the Offer
subsequently opened at 09h00 on 15 January 2016.
1.1.Continued Shareholder support for the Transactions
Prior to announcing the Transactions the Board pro-actively and constructively canvassed
and took into account a range of Shareholder opinions, including by obtaining irrevocable
undertakings in support of the Transactions from Sovereign’s largest Shareholders.
Although the Transactions obtained overwhelming support from Shareholders at the
General Meeting, Sovereign has been faced with frustrating action from persons directly
related to the controlling shareholder/s of a direct and hostile competitor of Sovereign
(“Competitor”) (“Competitor's Associates”) (as further elaborated on below), and public
criticism levelled at the Transactions by a small group of Dissenting Shareholders
representing less than 4% of Sovereign’s issued Shares (“Dissenting Group”).
In view of the above, the Board again engaged constructively and pro-actively with key
Shareholders (“Second Shareholder Interaction”), which interactions reaffirmed that:
- there continues to be overwhelming Shareholder support for the Transactions,
notwithstanding the criticism and opinions expressed by the Dissenting Group and the
Competitor’s Associates and notwithstanding numerous press articles that have
seemingly given credibility to the negative views expressed by the Dissenting Group; and
- the one-sided, negative press reporting and sensationalist views generally expressed by
the Dissenting Group and the Competitor’s Associates represent a distorted view of the
Transactions and Sovereign, supported by ulterior commercial agendas, and do not
represent the views of the general body of Sovereign’s Shareholders, all of whom are
themselves minority Shareholders.
Following the constructive and supportive Shareholder feedback received during the course
of the Second Shareholder Interaction, the Board has reaffirmed its resolve to, as stated in
the Results Announcement, not allow a Competitor and / or its associates to frustrate
Sovereign’s legitimate business strategies and initiatives. In the circumstances, the Board
has resolved to propose a revised form of the Transactions (“Revised Proposal”) as more
fully set out below.
During the course of the Second Shareholder Interaction the Board obtained support for the
Revised Proposal, in the form of irrevocable undertakings, from both institutional and other
Shareholders, collectively holding more than 70% of the Shares eligible to vote on the
Shareholders resolutions required to implement the Revised Proposal (“Irrevocables”).
1.2. Competitor's Frustrating Action
On 31 December 2015, being the last day to trade in order to be eligible to attend and vote
on the Resolutions pertaining to the Transactions at the General Meeting, the Competitor’s
Associates acquired a significant shareholding in Sovereign with the clear aim of attempting
the following:
- in the first instance, to vote against the Transactions in order to attempt to prevent
Sovereign from implementing the Transactions, which were aimed at advancing the
legitimate business interests of Sovereign (“First Frustrating Action”); and
- in the event that the First Frustrating Action failed, to then pro-actively frustrate the
implementation of the Transactions by, inter alia:
- abusing the Appraisal Rights process linked to a bona fide capital return to
Sovereign’s Shareholders, many of whom assisted Sovereign during two
recapitalisation exercises that occurred during the 2009-2011 period. In this regard
the Competitor’s Associates have informed Sovereign in writing that they intend
exercising their Appraisal Rights in respect of Shares amounting to approximately 8%
of all the Sovereign Shares in issue; and
- threatening to institute legal proceedings against Sovereign in the event that
Sovereign does not make an Appraisal Rights offer at a valuation / offer price
prescribed and insisted upon by the Competitor’s Associates, notwithstanding the fact
that the Companies Act stipulates the procedure for and timing of the determination of
fair value for purposes of an Appraisal Rights offer to Dissenting Shareholders,
(collectively, the “Second Frustrating Action”).
In corroboration of the above, it is important to note that the Competitor’s Associates
acquired the bulk of their Shares:
- after the publication of an announcement, which set out the objectives and mechanics of
the Transactions in detail, on 12 October 2015 (“Transaction Announcement”);
- with the full knowledge of the extensive institutional Shareholder support that the
Transactions enjoyed (as set out in detail in the Transaction Announcement); and
- subsequent to the publication of the Previous Circular, which set out the details regarding
the Transactions and contained additional irrevocable Shareholder support for the
Transactions.
Furthermore, the Competitor’s Associates are and have been aware that the Transactions
are subject to the condition precedent (“Condition Precedent”) that Shareholders holding
more than 5% of Sovereign’s Shares do not exercise their Appraisal Rights (“Dissenting
Percentage”). Although the Board may, at its election, waive the Condition Precedent, in
making its election the Board would have to take into account the burden that such a large
and unintended share buy-back would place on Sovereign’s balance sheet.
The Competitor’s Associates purposefully acquired sufficient Shares to exercise Appraisal
Rights in excess of the Dissenting Percentage with the objective of implementing the
Second Frustrating Action.
It is noteworthy that this is the second time that this Competitor (and / or acting through its
associates) has obtained, in an unsolicited manner and without engaging with the Board, a
significant shareholding block in Sovereign with a view to adversely affect or frustrate
Sovereign’s legitimate business strategies and initiatives, with potential significant and long-
term negative value consequences to Sovereign and its body of Shareholders. The previous
attempt also had a purposeful, direct bearing on Sovereign’s balance sheet and funding
capacity, as it occurred at a time when it was common cause that Sovereign needed a
capital injection and the Competitor and / or its associates attempted to frustrate Sovereign
from obtaining this capital.
The Board has reason to believe that the Competitor’s Associates are now attempting to
abuse a bona fide return of capital to Shareholders (in the form of the voluntary Repurchase
Offer and the Scheme), by means of the Second Frustrating Action, as a platform to
frustrate a number of Sovereign’s legitimate and positive commercial objectives, namely to:
- prevent Sovereign from returning a significant amount of capital to Shareholders at an
attractive valuation (“Capital Return Objective”);
- prevent other dissenting minority Shareholders from legitimately exercising Appraisal
Rights, as the ability to exercise Appraisal Rights will fall away in the event that the
Condition Precedent fails;
- prevent Sovereign from pro-actively reducing the future dilution that may arise from the
BEE Transaction (in year 7, upon the unwinding thereof) (“Dilution Prevention
Objective”);
- prevent Sovereign from immediately and significantly enhancing its earnings per Share
through the implementation of the Share Acquisition (“Earnings Enhancement
Objective”);
- prevent Sovereign from implementing the BEE Transaction; and
- prevent Sovereign from pro-actively and constructively remedying the historical executive
remuneration policy and reducing the financial burden of the current policy, whilst
securing a committed executive team that have their personal capital invested in
Sovereign.
In addition to actively working against Sovereign to thwart it from achieving these sound
commercial objectives, the Board notes that the Competitor’s Associates and the Dissenting
Group (the latter after publicly criticising the Company for the fees paid to non-executive
Directors), also voted against a voluntary reduction in the fees payable to Sovereign's non-
executive Directors, a resolution which was proposed by the Board to voluntarily and in
good faith reduce Sovereign’s general overhead costs. This resolution was adopted at the
General Meeting and has been implemented by the Board unconditionally (refer to
paragraph 2 below).
The Board believes that the Appraisal Rights remedies have been grossly abused. Appraisal
Rights have not been designed to be taken advantage of by a Competitor acting outside of a
general offer to all Shareholders. The Appraisal Rights arose from a bona fide attempt by
the Board to achieve the objectives set out above, including the Capital Return Objective
which was at the core of Shareholder criticism aired to the Board prior to publication of the
Transaction Announcement, including by representatives of the Dissenting Group. Indeed it
has come to the Board's attention that certain members of the Dissenting Group have also
sought to benefit from Appraisal Rights (at the expense of the Company and the vast
general Shareholder body) by attempting to purchase additional Shares after the General
Meeting, thereby increasing the number of Shares which they can demand that the
Company repurchase from them at an inflated price.
Against this background, the Board has resolved to make the Revised Proposal to
Shareholders. The essence of the Revised Proposal is to propose that Shareholders re-
approve the BEE Transaction, on the same key commercial terms previously approved by
Shareholders at the General Meeting, however in conjunction with a reduced Share buy-
back, the latter being in continued pursuit of the Capital Return Objective, the Earnings
Enhancement Objective and the Dilution Prevention Objective, but in a manner that does
not allow the Competitor’s Associates to:
- dictate or potentially scupper Sovereign’s legitimate business strategies and objectives,
including the implementation of the BEE Transaction;
- unduly benefit from selling their Shares to the Company at a price which is inflated and
higher than that at which the Competitor’s Associates purchased their Shares on market;
or
- generally frustrate the implementation of the BEE Transaction by, inter alia, utilising court
proceedings relating to their Appraisal Rights (an intention already expressed by the
Competitor’s Associates).
2. REVISED PROPOSAL
In order to implement the Revised Proposal, the Board, supported by Irrevocables by
Shareholders holding more than 70% of the eligible voting Shares, will propose:
- that Shareholders revoke all the Ordinary Resolutions and Special Resolutions passed at the
General Meeting pertaining to the Repurchase, the BEE Transaction and the New Executive
Remuneration Policy (“Revocation”); and
- a revision to the Transactions, in terms of which Sovereign will:
- repurchase up to 5% of the total number of Shares in issue from Shareholders, excluding
Exco Members, the ESOP Trust and Crown Chickens (“Eligible Shareholders”)
(“Revised Repurchase”), at a repurchase price of R8.50 per Share (“Repurchase
Consideration”), as further detailed in paragraph 3 of this announcement; and
- implement the BEE Transaction, on substantially the same terms as those set out in the
Previous Circular; and
- implement the New Executive Remuneration Policy, on substantially the same terms as
those set out in the Previous Circular,
(collectively, the “Revised Transactions”).
The implementation of the Revocation and approval of the Revised Transactions will be inter-
conditional. However, the implementation of the BEE Transaction and the New Executive
Remuneration Policy will not be conditional on the number of tenders received in terms of the
Revised Repurchase nor the completion of the Revised Repurchase.
For the avoidance of doubt, it is recorded that the Special Resolution relating to the approval of
the NED Fee Policy, passed at the General Meeting, has been implemented and will not be
affected by the Revocation nor the Revised Transactions.
2.1.Rationale for the Revocation and the Revised Transactions
The specific circumstances regarding the unsolicited, hostile actions of the Competitor’s
Associates, as set out above, have resulted in the Revised Proposal, which may result in the
implementation of the Revised Transactions.
Pursuant to the terms of the Transactions, as set out in the Previous Circular, the approval
and implementation of the Repurchase, the BEE Transaction and the New Executive
Remuneration Policy are inter-conditional. The revocation of the Repurchase alone would
therefore result in the non-fulfilment of the conditions precedent relating to the BEE
Transaction and the New Executive Remuneration Policy.
Accordingly, Sovereign will propose that Shareholders:
- revoke all the Ordinary Resolutions and Special Resolutions passed at the General
Meeting relating to the Repurchase, the BEE Transaction and the New Executive
Remuneration Policy; and
- approve the Revised Transactions.
3. SALIENT TERMS OF THE REVISED REPURCHASE
3.1.Revised Repurchase
The Revised Repurchase will be implemented on the basis that Sovereign will offer to
acquire a maximum of 3 811 113 Shares (“Revised Repurchase Shares”) from Eligible
Shareholders, representing no more than 5% of the total Shares in issue.
The total consideration payable by Sovereign pertaining to the Revised Repurchase
amounts to no more than R32 394 460.50. Sovereign will utilise available cash resources to
fund the Revised Repurchase.
The approval of the Revised Repurchase is conditional on the approval of the Revocation,
the BEE Transaction and the New Executive Remuneration Policy at a new general meeting
of Shareholders (“New General Meeting”).
3.2.Tender process
The Revised Repurchase will be implemented on the basis that Eligible Shareholders will be
entitled to elect whether or not to sell all or any of their Shares to Sovereign in exchange for
the Repurchase Consideration. If an Eligible Shareholder wishes to sell Shares, then such
Eligible Shareholder will be required to tender such number of Shares it wishes to dispose of
in terms of the Revised Repurchase, to Sovereign (“Tender”).
To the extent that Eligible Shareholders, in aggregate, Tender:
- more than the Revised Repurchase Shares, then Sovereign will repurchase, from each
Shareholder that validly Tendered Shares (“Participating Shareholder”), a portion of
the Shares Tendered by each such Participation Shareholder which is pro rata to the
total number of Shares Tendered by all Participating Shareholders; or
- less than or equal to the Revised Repurchase Shares, then Sovereign will repurchase,
from each Participating Shareholder, all the Shares Tendered by such Participating
Shareholder and Sovereign will not expropriate the balance of the Shares from
Shareholders.
Importantly, Shareholders will not be forced to sell any of their Shares in terms of the
Revised Transactions and no expropriation of any Shareholder’s Shares will occur (e.g.
through a scheme of arrangement).
This means that all Shareholders are entitled to elect whether or not to participate in the
Capital Return Objective (and, if so, to what extent they may wish to Tender their Shares) or
to continue to hold (all or some of) their Shares.
4. SALIENT TERMS OF THE BEE TRANSACTION AND THE NEW EXECUTIVE REMUNERATION POLICY
The terms of the BEE Transaction and the New Executive Remuneration Policy remain
substantially the same as those set out in the Previous Circular.
The approval of the BEE Transaction and the New Executive Remuneration Policy is
conditional on Shareholders approving the Revocation and the Revised Repurchase at the New
General Meeting. However, the implementation of the BEE Transaction and the New Executive
Remuneration Policy will not be conditional on the number of Tenders received nor the
completion of the Revised Repurchase.
5. DISSENTING SHAREHOLDERS
If the Revocation and the Revised Transactions are approved at the New General Meeting,
Dissenting Shareholders’ rights in respect of their Shares will be reinstated in accordance with
sections 164(9) and (10) of the Companies Act. In such event, the Company shall not proceed to
implement the Repurchase (including the Scheme) nor the Notional Funding Repurchase (in
excess of 5% (five percent) of the issued Shares) and the Company will not be required to offer
to make payment to Dissenting Shareholders of an amount considered by the Directors to be the
fair value of their Shares, as envisaged in section 164(11) of the Companies Act.
6. CONDITIONS PRECEDENT
6.1.The Revocation
The Revocation will be subject to the fulfilment of, inter alia, the condition precedent that
Shareholders approve the Revocation and the Revised Transactions at the New General
Meeting.
If the condition precedent to the Revocation is not fulfilled, Sovereign may proceed to
implement the Transactions as approved at the General Meeting.
6.2.The Revised Repurchase
The Revised Repurchase will be subject to the fulfilment of, inter alia, the condition
precedent that Shareholders approve the Revocation and the Revised Transactions at the
New General Meeting.
If the condition precedent to the Revised Repurchase is not fulfilled, Sovereign may proceed
to implement the Transactions as approved at the General Meeting.
6.3.The BEE Transaction and New Executive Remuneration Policy
The BEE Transaction and the New Executive Remuneration Policy are subject to the
fulfilment of, inter alia, the following conditions precedent:
- Shareholders approving the Revocation and the Revised Transactions at the New
General Meeting; and
- the Transaction Agreements, as amended, becoming unconditionally operative in
accordance with their terms.
If the conditions precedent to the BEE Transaction and the New Executive Remuneration
Policy are not fulfilled, Sovereign may proceed to implement the Transactions as approved
at the General Meeting.
7. PRO FORMA FINANCIAL INFORMATION
The table below sets out the summary pro forma financial effects of the Revised Transactions,
assuming all the Revised Repurchase Shares are acquired by Sovereign in terms of the Revised
Repurchase, on Sovereign’s basic earnings, headline earnings, diluted earnings, diluted headline
earnings, net asset value and net tangible asset value per Share, both inclusive and exclusive of
once-off costs. Once-off costs include a BEE share based payment charge in terms of
IFRS 2: Share-based payment and transaction costs.
The summary pro forma financial effects have been prepared to illustrate the impact of the Revised
Transactions, assuming all the Revised Repurchase Shares are acquired by Sovereign in terms of
the Revised Repurchase, on the unaudited, published financial information of Sovereign for the six
months ended 31 August 2015, had the Revised Transactions occurred on 1 March 2015 for
purposes of the statement of comprehensive income and on 31 August 2015 for purposes of the
statement of financial position.
For the avoidance of doubt, the pro forma financial effects account for the cumulative costs
incurred by Sovereign should the Revocation and the Revised Transactions be implemented.
Accordingly these costs include the initial costs associated with the Transactions incorporated in
the pro forma financial effects set out in the Previous Circular as well as estimated incremental
costs pertaining to the Revised Transactions.
The summary pro forma financial effects have been prepared using the accounting policies that
comply with International Financial Reporting Standards and that are consistent with those applied
in the audited, published financial statements of Sovereign for the year ended 28 February 2015.
The summary pro forma financial effects set out below are the responsibility of the Directors and
have been prepared for illustrative purposes only and because of their nature may not fairly present
the financial position, changes in equity and results of operations or cash flows of Sovereign after
the Revised Transactions.
Before the After the
Revised After Revised Revised Overall %
Transactions Repurchase % change Transactions % change change
Actual Pro forma Pro forma Pro forma Pro forma Pro forma
Notes 1,7 2 3 4 5 6
Excluding once-off costs
Earnings per Share (cents) 89.6 93.7 4.5% 96.0 2.4% 7.1%
Diluted earnings per Share (cents) 89.6 93.7 4.5% 96.0 2.4% 7.1%
Headline earnings per Share (cents) 89.7 93.8 4.5% 96.0 2.4% 7.1%
Diluted headline earnings per Share (cents) 89.7 93.8 4.5% 96.0 2.4% 7.1%
Net asset value per Share (cents) 1 000.7 1 008.8 0.8% 1 040.8 3.2% 4.0%
Net tangible asset value per Share (cents) 1 000.7 1 008.8 0.8% 1 040.8 3.2% 4.0%
Including once-off costs
Earnings per Share (cents) 89.6 93.6 4.4% 64.6 (30.9%) (27.9%)
Diluted earnings per Share (cents) 89.6 93.6 4.4% 64.6 (30.9%) (27.9%)
Headline earnings per Share (cents) 89.7 93.6 4.4% 64.7 (30.9%) (27.9%)
Diluted headline earnings per Share (cents) 89.7 93.6 4.4% 64.7 (30.9%) (27.9%)
Net asset value per Share (cents) 1 000.7 1 004.5 0.4% 1 014.1 1.0% 1.3%
Net tangible asset value per Share (cents) 1 000.7 1 004.5 0.4% 1 014.1 1.0% 1.3%
Number of Shares in issue 76 222 266 72 411 153 97 046 539
Number of Shares in issue less treasury Shares 74 662 466 70 851 353 69 550 558
Weighted average number of Shares in issue 75 218 838 71 407 725 70 106 930
Notes:
1. The “Before the Revised Transactions” basic earnings, headline earnings, diluted earnings, diluted headline earnings per Sovereign Share have been
extracted without adjustment from the unaudited, published financial information of Sovereign for the six months ended 31 August 2015. The “Before
the Revised Transactions” net asset value and net tangible asset value per Sovereign Share have been calculated from the financial information
presented in the unaudited, published financial information of Sovereign as at 31 August 2015.
2. The financial information included in the “After Revised Repurchase” column has been prepared based on Sovereign’s unaudited, published financial
information for the six months ended 31 August 2015 and taking into account the following:
a. The repurchase of 3 811 113 Shares, namely the Revised Repurchase Shares.
b. Payment of once-off transaction costs attributable to the Revised Repurchase amounting to R2 935 465.
c. Net finance costs incurred amounting to R706 599 in respect of the net cash amount paid relating to the Revised Repurchase, which adjustment is
expected to have a continuing effect on the financial information of Sovereign.
d. Recognition of taxation at a rate of 28%.
e. Once-off recognition of securities transfer tax at a rate of 0.25%.
3. The percentage change is measured as the difference between the “After Revised Repurchase” column and the “Before the Revised Transactions”
column as a percentage of the “Before the Revised Transactions” column.
4. The financial information included in the “After the Revised Transactions” column has been prepared based on Sovereign’s unaudited, published
financial information for the six months ended 31 August 2015, taking into account those adjustments set out in point 2 above and the following:
a. The acquisition by BEE Trust of 1 300 795 Contributed Shares, which Shares will be recognised as treasury Shares.
b. The subscription by BEE Trust of 758 031 Exco Funded Shares, which Shares will be recognised as treasury Shares.
c. The subscription by BEE Trust of 23 877 355 Notionally Funded Shares, which Shares will be recognised as treasury Shares, funded through the
subscription by Sovereign for 23 877 355 Preferent Units, in terms of the Notional Funding and the consolidation of BEE Trust in terms of
IFRS 10: Consolidated Financial Statements.
d. Termination of the LTIS in terms of the New Executive Remuneration Policy and the consequent reversal of costs and an accrual relating thereto
in an amount of R2 801 250, arising in terms of the LTIS Awards which vested during the six months ended 31 August 2015, which adjustment is
expected to have a continuing effect on the financial information of Sovereign.
e. Amendment to the STIS in terms of the New STIS Policy as it relates to Exco by reversing costs and an accrual relating thereto in an amount of
R2 801 250 and recognising costs and an accrual of R1 834 200 (based on the maximum of 30% of the total cost to company), which adjustments
are expected to have a continuing effect on the financial information of Sovereign.
f. Recognition of a once-off and recurring share based payment charges in terms of IFRS 2: Share-Based Payments, amortised for the six months
ended 31 August 2015. The recurring share based payment charge will have a continuing effect on the financial information of Sovereign.
g. Payment of once-off transaction costs attributable to the BEE Transaction amounting to R15 168 471.
h. Once-off payment in cash of a maximum of R500 000 in respect of capital gains tax or income tax payable by Exco Members as a result of the
disposal of the Contributed Shares.
i. Net finance costs incurred amounting to R185 057 in respect of the net cash amount paid relating to the BEE Transaction. The net finance costs
are expected to have a continuing effect on the financial information of Sovereign.
j. Recognition of taxation at a rate of 28%.
k. Once-off recognition of securities transfer tax at a rate of 0.25%.
5. The percentage change is measured as the difference between the “After the Revised Transactions” column and the “After Revised Repurchase”
column as a percentage of the “After Revised Repurchase” column.
6. The percentage change is measured as the difference between the “After the Revised Transactions” column and the “Before the Revised
Transactions” column as a percentage of the “Before the Revised Transactions” column.
7. There are no other post balance sheet events that require adjustments to pro forma financial information.
The financial effect of the Notional Funding Repurchase has not been included in the above summary pro forma financial information, however if the
Notional Funding Repurchase were to be implemented in the future, the effect would be a cash payment of a total of R1 (one Rand) for all Notionally
Funded Shares repurchased by Sovereign and the reduction in the number of Shares in issue by all Notionally Funded Shares repurchased in terms of
the Notional Funding Repurchase.
8. INDEPENDENT EXPERT OPINION
8.1.The Revised Repurchase
The Revised Repurchase is a specific repurchase of Shares from Eligible Shareholders, which
include Shareholders who hold in excess of 10% of the issued share capital of Sovereign.
Accordingly, the Revised Repurchase is considered to be a specific repurchase of Shares
from related parties, as defined in paragraph 10.1(b)(i) of the Listings Requirements, at a
premium to the 30 day VWAP as at 8 February 2016.
In the circumstances, the Board is required to retain an independent expert to provide a
fairness opinion in respect of the Revised Repurchase, in compliance with paragraph 5.69(e)
of the Listings Requirements.
8.2.The BEE Transaction
The Exco Members, LM Nyhonyha and Prof. MP Madi are considered related parties to
Sovereign in terms of paragraph 10.1(b)(ii) of the Listings Requirements and the BEE Trust is
considered a related party to Sovereign in terms of paragraph 10.1(b)(vii) of the Listings
Requirements.
The BEE Transaction incorporates a specific issue of shares for cash to related parties, as
well as the provision of financial assistance for purposes of funding the Specific Issue, by way
of the Notional Funding. Accordingly, a fairness opinion is required in respect of the BEE
Transaction, in accordance with the guidance letter issued by the JSE, dated
11 November 2010.
Sovereign has appointed Mazars Corporate Finance as the independent expert to opine on the
fairness of the Revised Repurchase and the BEE Transaction ("Independent Expert"). The reports
of the Independent Expert as well as the recommendations of the Board will be included in the
Revised Transactions circular to be sent to Shareholders in due course ("New Circular").
9. IRREVOCABLE UNDERTAKINGS
Shareholders holding more than 70% of the eligible voting Shares have provided Irrevocables in
support of the Revised Transactions.
10. SALIENT DATES AND TIMES
The salient dates and times regarding the Revocation, the Revised Transactions and the New
General Meeting as well as the posting of the New Circular will be published on SENS in due
course.
11. CHANGES TO THE BOARD
Pursuant to the Transaction Announcement Shareholders were informed that Mr Charles Peter
Davies (“Mr Davies”) had indicated his wish to retire from the Board with effect on
29 February 2016. In light of the practical implications of a change to the Board during the course
of incomplete corporate actions and specifically in view of the frustrating actions by the
Competitor, the Board does not consider it prudent to undergo any changes to the Board and
requested Mr Davies to withdraw his notice of resignation and to remain available to serve on the
Board indefinitely. The Board is pleased to announce that Mr Davies has acceded to this request
and will continue to serve on the Board as an independent non-executive Director.
12. RESPONSIBILITY STATEMENT
Each member of the Board, collectively and individually, accepts full responsibility for the
accuracy of the information given in this announcement and certifies that, to the best of his
knowledge and belief, there are no facts that have been omitted that would make any statement
in this announcement false or misleading and that all reasonable enquiries to ascertain such
facts have been made and that this announcement contains all information required by law and
the Listings Requirements.
Port Elizabeth
9 February 2016
Corporate advisor and Sponsor
One Capital
Attorneys to Sovereign
Cliffe Dekker Hofmeyr Inc.
Date: 09/02/2016 08:00:00 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
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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