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Mandatory offer to acquire all the issued ordinary shares in Torre Industries Limited not already held by Stellar
Stellar Capital Partners Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/015580/06)
Share code: SCP
ISIN: ZAE000198586
("Stellar" or “the Company”)
MANDATORY OFFER TO ACQUIRE ALL THE ISSUED ORDINARY SHARES IN TORRE INDUSTRIES LIMITED
(“TORRE”) NOT ALREADY HELD BY STELLAR
1 INTRODUCTION
Shareholders are referred, inter alia, to the joint announcement (“Firm Intention
Announcement”) released on the Stock Exchange News Service (“SENS”) by Stellar and Torre on
23 June 2016 regarding Stellar’s acquisition of 8 368 102 additional shares (“Acquired Shares”) in
Torre in exchange for 1.25 Stellar shares for each Acquired Share held (“Acquisition”).
As a consequence of the Acquisition, which was concluded in equal part with two parties
unrelated to Stellar namely the Inhimwe Trust and the Creeky Glen Trust, Stellar’s interest in Torre
has increased from 177 654 276 Torre ordinary shares or 33.86% to 186 022 378 Torre ordinary
shares, representing approximately 35.46% of the issued ordinary share capital of Torre.
The Company is therefore obliged to make a mandatory offer, as contemplated in section 123 of
the Companies Act 71 of 2008 (“Companies Act”) and the Companies Regulations, 2011
(“Takeover Regulations”), to Torre shareholders to acquire all the Torre shares (“Offer Shares”)
not already owned by Stellar (“Offer”).
2 THE ACQUISITION AND THE OFFER
The Acquisition consideration was settled through the issue of 10 460 127 existing Stellar shares,
held in treasury, representing 1.25 Stellar shares per Acquired Share.
In terms of the Takeover Regulations, Stellar is obliged to offer to acquire all of the Offer Shares
through the issue of 1.25 new Stellar shares (“Stellar Shares”) for each Offer Share held (“Offer
Consideration”), effectively valuing each Offer Share at R2.25 at the date of the Firm Intention
Announcement.
The Offer Consideration represents a slight premium of 2.3% to Torre’s closing share price at 21
June 2016.
Stellar is of the view that it is not obliged to make a comparable offer (and accordingly will not
make an offer) for the existing awards made in terms of share appreciation awards and bonus
share plans. These awards will continue to be governed under their existing plans.
3 DESCRIPTION OF TORRE
Torre is an industrial group that specialises in the value added distribution of branded capital
equipment and industrial consumable products, the supply of top quality parts and components to
the equipment and automotive aftermarkets and the provision of critical analytical and testing
services to the mining and industrial markets across Africa. Torre employs approximately 1,600
people in 8 business units and serves several end-markets including the automotive, mining,
construction, manufacturing and agricultural sectors. Torre has an established presence across
South Africa and in 13 other African countries. Torre’s strategy is to remain a predominantly Africa
focused business and it has a growing track record of delivering organic growth via its businesses
on the continent.
4 RATIONALE FOR THE ACQUISITION AND THE OFFER
Stellar purchased the Acquired Shares in order to increase its holding in Torre at a relatively
attractive valuation. As a result Stellar’s shareholding in Torre has increased to more than 35% and
the Company is therefore required, in terms of the Companies Act and the Takeover Regulations,
to make a mandatory offer to Torre shareholders for the Offer Shares at the highest price paid by
Stellar in the six months preceding the date of the Firm Intention Announcement.
Stellar does not anticipate any change to the nature of Torre’s business nor its board of directors
following implementation of the Offer. Stellar anticipates that Torre will remain listed on the JSE
following the completion of the Offer, subject to Torre continuing to meet the public shareholder
spread and related requirements of the JSE Limited Listings Requirements.
5 FINANCIAL INFORMATION OF TORRE
As per Torre’s audited annual financial statements as at 30 June 2015, Torre had recorded the
following:
- Revenue of R1,332,407,000;
- Profit after tax of R102,407,000; and
- Net assets of R1,341,924,000.
6 CONDITIONS PRECEDENT TO THE OFFER
The Offer will be subject to the fulfilment of the condition precedent that, inter alia, the Takeover
Regulation Panel, the South African Competition Authorities and the Competition Authorities in
other relevant jurisdictions in which Torre operates provide their approvals (which costs hereto
will be borne by Stellar), and that any special resolutions that may be needed in connection with
the Offer are passed by the requisite majority of Torre shareholders on or before 30 September
2016 or such later date as required and extended by Stellar, to the extent these approvals are
required.
7 CATEGORISATION
The Acquisition and the Offer constitute a Category 1 transaction for Stellar in terms of the JSE
Limited Listings Requirements. In terms of Stellar’s investment policy, as detailed in its annual
report and approved by the JSE and shareholders, a circular to shareholders and shareholder
approval for the Category 1 transaction is not required.
8 SALIENT DATES
The salient dates pertaining to the Offer will be released on SENS and published in the press in due
course.
Johannesburg
23 June 2016
Financial Adviser and Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Legal Adviser
Cliffe Dekker Hofmeyr
Date: 23/06/2016 10:15:00 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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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,
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