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Mandatory and comparable offer to be made to the shareholders of Rex Trueform
REX TRUEFORM CLOTHING COMPANY LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1937/009839/06)
JSE share code: RTO ISIN: ZAE000006144
JSE share code: RTN ISIN: ZAE000009700
JSE share code: RTOP ISIN: ZAE000006151
(“Rex Trueform” or the “Company”)
MANDATORY AND COMPARABLE OFFER TO BE MADE TO THE SHAREHOLDERS OF REX TRUEFORM
1. INTRODUCTION
Rex Trueform and a consortium (“Consortium” or the “Offeror”) consisting of Geomer Investments (Pty) Ltd (”Geomer
Investments”), The Ceejay Trust (“Ceejay Trust”), Gingko Trading (Pty) Ltd (“Gingko Trading”) and Gingko
Investments No. 2 (Pty) Ltd (“Gingko Investments”), advise shareholders that the Consortium has increased their
shareholding in Rex Trueform such that its economic interest has increased to 30.3% and it holds shares with a voting
power of 17.6%. This was predicated through the acquisition of 242 062 Rex Trueform Ordinary shares from Brimstone
Investment Corporation Limited (“Brimstone”) at R12.14 per share and 2 646 354 Rex Trueform N Ordinary shares at
R11.10 per share from Brimstone and Lion of Africa Insurance Company Limited (“Lion of Africa”). The Consortium
now holds 498 194 Rex Trueform Ordinary shares and 5 753 555 Rex Trueform N Ordinary shares.
A concert party arrangement has formally been established amongst the Consortium’s members in accordance with
Regulation 84 of the Companies Regulations.
Shareholders are referred to the announcement made on 22 April 2016 advising shareholders of the increase by the
Consortium of its voting power in African and Overseas Enterprises Limited (“African and Overseas”) to more than 35%
(“African and Overseas Transaction”). As African and Overseas controls (as contemplated in regulation 81(e) of the
Companies Regulations (the “Companies Regulations”) promulgated in terms of Sections 120 and 223 of the Companies
Act No. 71 of 2008, as amended, (the "Companies Act")) Rex Trueform, Rex Trueform qualifies as a controlled company
(as contemplated in regulation 81(f) of the Companies Regulations as read with regulation 81(w)), recognising that African
and Overseas holds shares entitling it to exercise 72.0% of the voting rights in Rex Trueform (and with an economic
interest of 54.9% in Rex Trueform). Consequently, in terms of regulation 85 of the Companies Regulations, the Consortium
is obligated to make a mandatory offer and a comparable offer to all Rex Trueform shareholders to acquire all of the
Ordinary and N Ordinary shares of Rex Trueform, other than those that it already owns (the “Offer Shares”), on the terms
set out in paragraph 3.1 below (the “Offer”).
The Consortium has notified the board of directors of Rex Trueform of its obligation to proceed with the proposed
acquisition of the Offer Shares. The Offer is an affected transaction as defined in section 117(1)(c) of the Companies Act
and, accordingly, will be regulated by the Companies Act, the Companies Regulations and the Takeover Regulation Panel
("TRP").
2. RATIONALE FOR THE OFFER
As mentioned above, the Consortium is obliged to make the Offer.
The Offeror does not anticipate any change to the nature of Rex Trueform’s business following the Offer.
3. THE OFFER
3.1. Terms of the Offer
The Consortium has issued a firm intention letter undertaking to make an offer to acquire all of the Offer Shares in
exchange for the Offer consideration of R12.14 per Rex Trueform Ordinary share and R11.10 per Rex Trueform N
Ordinary share, respectively, (“Offer Consideration”) in cash. Rex Trueform shareholders may elect to accept the
Offer in whole or in part. The Offer will not be subject to any conditions.
The Offer Consideration represents a premium to the Rex Trueform Ordinary share closing price of R11.50 and to the
Rex Trueform N Ordinary share closing price of R11.00 as at close of business on 14 April 2016.
Rex Trueform Ordinary shares
Closing price R11.50
Offer price R12.14
Premium 5.57%
Rex Trueform N Ordinary Shares
Closing price R11.00
Offer price R11.10
Premium 0.97%
The Consortium is of the view that it has calculated the Offer Consideration with reference to the requirements of the
Companies Act and the Companies Regulations relating to comparable offers and has further notified the Company
that in the Consortium's view it is not obliged to make a comparable offer (and accordingly will not make an offer) for
the preference shares issued by the Company. The Company is seeking advice as to whether the Offer Consideration,
as proposed by the Consortium, is correct having regard to the requirements of the Companies Act and the Companies
Regulations relating to comparable offers. In addition, the Company is seeking advice as to whether the Consortium
is obliged to extend a comparable offer in respect of the preference shares issued by the Company. It is noted that the
Companies Regulations only require comparable offers to be made for all classes of issued securities that have voting
rights or could have voting rights in the future.
3.2. Posting of circular and Offer period
It is expected that the Offer circular will be posted on or about 17 May 2016 and the Offer is expected to be open for
acceptance from 09:00 on or about 18 May 2016 with the initial closing date expected to be at 17:00 on or about
1 July 2016 ("Closing Date") which is the minimum offer period in terms of the Companies Regulations of 30
business days.
3.3. Payment of the Offer Consideration and guarantee
Investec Bank Limited has furnished the TRP with an irrevocable guarantee that the Consortium has sufficient cash
resources and/or facilities to conclude the Offer.
As detailed in paragraph 4, the Consortium has received from shareholders who collectively hold 7.1% of the
economic interest in the Rex Trueform shares (with 3.4% of the voting power) irrevocable confirmations that they
will not accept the Offer.
4. SHAREHOLDINGS IN AFRICAN AND OVERSEAS AND REX TRUEFORM
The concert parties comprising the Offeror have the following beneficial interests in African and Overseas shares:
Beneficial interest in Beneficial interest Percentage of
African and in African and voting rights Percentage of
Overseas Ordinary Overseas N (net of treasury economic
Concert party shares Ordinary shares shares) interest
Geomer Investments 177 888 2 579 050 14.67% 24.21%
Ceejay Trust 169 237 4 026 311 14.56% 36.84%
Gingko Trading - - - -
Gingko Investments 76 238 1 612 950 6.48% 14.83%
Total 423 363 8 218 311 35.71% 75.88%
The concert parties comprising the Offeror have the following beneficial interests in Rex Trueform shares:
Percentage of
Beneficial interest in Beneficial interest voting rights Percentage of
Rex Trueform in Rex Trueform (net of treasury economic
Concert party Ordinary shares N ordinary shares shares) interest
Geomer Investments 169 443 1 852 448 5.97% 9.8%
Ceejay Trust 254 463 2 084 610 8.85% 11.3%
Gingko Trading 592 - 0.02% -
Gingko Investments 73 696 1 816 497 2.76% 9.2%
Total 498 194 5 753 555 17.6% 30.3%
None of the concert parties hold any options to purchase any other Rex Trueform shares.
The following Rex Trueform shareholder has irrevocably undertaken in favour of the Offeror not to accept the Offer:
Percentage of
Beneficial interest in Beneficial interest voting rights Percentage of
Rex Trueform in Rex Trueform (net of treasury economic
Name Ordinary shares N ordinary shares shares) interest
Transvaal Clothing Industries 1979
Proprietary Limited 96 446 1 371 797 3.4% 7.1%
Total 96 446 1 371 797 3.4% 7.1%
No Rex Trueform shareholders have given any undertaking to accept the Offer.
5. APPOINTMENT OF INDEPENDENT BOARD, CORPORATE ADVISOR AND INDEPENDENT EXPERT TO ADVISE ON THE FAIRNESS AND REASONABLENESS
OF THE OFFER
An independent sub-committee of the Rex Trueform board of directors comprising at least 3 directors of Rex Trueform (the
“Independent Board”) will be formed for the purposes of considering the Offer in accordance with the requirements of the
Companies Regulations.
Java Capital Proprietary Limited has been appointed to advise the board of directors of Rex Trueform on matters relating to
the Offer.
The Independent Board will appoint an independent expert acceptable to the TRP (as required in terms of section 114(2) of
the Companies Act, read with regulations 91(1) and 110 of the Companies Regulations) (the “Independent Expert”), to
advise and report to the Independent Board on the Offer by way of a fair and reasonable opinion. The Independent
Expert’s full report as well as the Independent Board’s opinion on the Offer and Offer Consideration will be included in the
offeree response circular. If feasible, the offeree response circular will be incorporated within the Offer circular as a
combined offer circular.
6. RESPONSIBILITY STATEMENT
The Consortium and, to the extent that the information relates directly to Rex Trueform, the board of directors of Rex
Trueform, accept responsibility for the information contained in this announcement. To the best of their respective
knowledge and belief, the information contained in this announcement is true and nothing has been omitted which is likely
to affect the import of the information.
22 April 2016
Corporate Advisor and Sponsor to Rex Trueform
Java Capital
Legal Advisor to Rex Trueform
MICHAEL KRAWITZ & CO
Corporate Advisor to the Consortium
Investec Bank Limited
Legal Advisor to the Consortium
Webber Wentzel
Date: 22/04/2016 11:58:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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