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BEIGE HOLDINGS LIMITED - Announcement of Firm Intention by the Lion Match Company Limited

Release Date: 12/07/2016 16:30
Code(s): BEG     PDF:  
Wrap Text
Announcement of Firm Intention by the Lion Match Company Limited

BEIGE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/006871/06)
(“Beige” or “the Group”)
ISIN Code: ZAE 000034161 Share code: BEG



ANNOUNCEMENT OF FIRM INTENTION BY THE LION MATCH COMPANY PROPRIETARY LIMITED (“the
Offeror”) TO ACQUIRE ALL OF THE ISSUED SHARE CAPITAL OF BEIGE THAT THE OFFEROR DOES NOT
ALREADY OWN AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT



INTRODUCTION
Beige shareholders are advised that on 21 June 2016 the Board of Directors of Beige ("the Board") was advised of
a firm intention offer, which was subject to the provision of a bank guarantee, ("the firm intention") from the
Offeror to acquire all Beige ordinary shares that the Offeror does not already own ("Offer Shares"), ("the "Offer"
or "the Proposed Transaction"). The bank guarantee was provided to the Company on 11 July 2016.

The Offeror currently owns 4 111 289 057 shares in Beige which constitutes approximately 90.47% of the issued
ordinary share capital of Beige. The firm intention to pursue the Proposed Transaction will be implemented by
means of a scheme of arrangement in terms of section 114 of the Companies Act, 2008 ("the Companies Act")
("the Scheme").

OFFER CONSIDERATION
The consideration in terms of the Offer is R0.03 per ordinary share ("Offer Consideration"), payable in cash,
representing R12 987 250.53 in total. The Offer Consideration will be adjusted on a pro rata basis for any material
adjustment to the equity value of Beige by virtue of a dividend distribution, capital award, rights issue, scrip
dividend, or any other manner, between the date of signature of the firm intention and the date of
implementation of the Proposed Transaction.

The Offer Consideration is equal to the market price of 3 cents per share, being the closing price of Beige shares
traded on the JSE Limited ("JSE") on 11 July 2016, being the last business day prior to the date of this
announcement.

The Offer Consideration is at 26.6% premium to the 30 day VWAP of 2.37 cents of Beige shares traded on the JSE
up to 11 July 2016, being the last business day immediately prior to the date of this announcement.

RATIONALE FOR THE SCHEME
Beige is no longer suitable for listing due to the tough trading conditions over recent years and the resultant
substantial losses being incurred by the Group. In addition, the turnaround strategy is taking longer than
expected given the continued depressed economic environment. The listing fees and associated costs of being a
listed entity outweigh the current benefits of being listed and Beige does not currently have an acquisition
strategy, given market conditions.

CONDITIONS PRECEDENT TO THE SCHEME
The Scheme will be subject to the fulfilment or waiver (in whole or in part) by the Offeror, of the following
conditions precedent by Wednesday, 24 August 2016, or such later date as the Offeror and Beige may agree to
in writing:

-     the approval of the Scheme by the requisite majority of Beige shareholders, as contemplated in section
      115(2) of the Companies Act, and:

      o     to the extent required, the approval and the implementation of such resolution by the court as
            contemplated in section 115(3)(a) of the Companies Act; and
      o     if applicable, Beige not treating the aforementioned resolution as a nullity, as contemplated in
            section 115(5)(b) of the Companies Act;

-     Beige shareholders not having exercised appraisal rights by giving valid demands to this effect to Beige, in
      terms of section 164(7) of the Companies Act, in respect of more than 5% of the Beige Shares within 30
      business days following the Beige Scheme Meeting, provided that, in the event that any Beige
      shareholders give notice objecting to the Scheme, as contemplated in section 164(3) of the Companies
      Act, and those Beige shareholders vote against the resolution proposed at the Scheme Meeting to
      approve the Scheme, but do so in respect of no more than 5% of the Beige shares, this condition shall be
      deemed to have been fulfilled at the time of the Scheme Meeting; and

-     by the date on which each of the abovementioned conditions are fulfilled or waived (as the case may be),
      an adverse effect, fact, circumstance which is or might reasonably be expected (alone or together with any
      other such adverse effect, fact or circumstance) to be material with regard to the operations, continued
      existence, business, condition, assets and liabilities of Beige and its subsidiaries (whether as a consequence
      of the Scheme or not) has not occurred. For the purposes of this clause, to be material, the adverse effect,
      fact or circumstance must constitute a change in the laws of the Republic of South Africa (including,
      without limitation, laws relating to taxation) which has (or may reasonably be expected to have) a material
      adverse effect upon the Scheme such that the effective direct or indirect cost of the Scheme to the Offeror,
      including but not limited to the Offer Consideration, would increase by 15% or more.

The Conditions other than of a regulatory nature are stipulated for the benefit of the Offeror and may be waived
by the Offeror in its sole discretion by notice in writing to Beige. Conditions that are of a regulatory nature
cannot be waived.

CONDITIONS PRECEDENT TO THE POSTING OF THE SCHEME CIRCULAR TO BEIGE SHAREHOLDERS
The posting of the circular to Beige shareholders in relation to the Scheme ("Scheme Circular") is subject to the
fulfilment of various conditions precedent, namely the requisite approvals being received from the JSE, the
Takeover Regulation Panel ("TRP") and the Financial Surveillance Department of the South African Reserve Bank
for the posting of the Scheme Circular.

These conditions are of a regulatory nature and cannot be waived. The Scheme will also require a fair and
reasonable opinion to be provided by an independent professional expert.

SHAREHOLDINGS, ACTING AS PRINCIPAL AND CONCERT PARTIES
The Offeror is the beneficial owner of 4 111 289 057 Beige ordinary shares, comprising approximately 90.47% of
the ordinary share capital of Beige.

The Offeror confirms that it is the ultimate proposed purchaser of all the Offer Shares and is not acting in concert
with, or as an agent or broker for, any other party.

FUNDING THE OFFER CONSIDERATION
The maximum Scheme Consideration will be R12 987 250.53. The Offeror has confirmed to Beige that sufficient
cash resources are available for the payment of the Scheme Consideration in terms of the Scheme, and, as
required in terms of the Companies Act and the Regulations, Absa Bank Limited has provided the necessary
guarantee to the TRP to satisfy the full Offer Consideration payable in compliance with Regulations 111(4)
and 111(5) of the Takeover Regulations.

INDEPENDENT BOARD AND INDEPENDENT EXPERT
The Offer is classified as an affected transaction in terms of the Companies Act and the Board has formed an
Independent Board comprising Messrs Muhammed Akram Sultan, Ajith Heeralal, Jacob van Wyk and Raoof Jagot
("the Independent Board"). Whilst Messrs Ajith Heeralal and Jacob van Wyk are directors of the Offeror, they are
not shareholders in the Offeror or Beige and have been declared as independent. As such, they are declared
non-independent in relation to the Offeror’s board.

The Independent Board has appointed Mazars Incorporated as the Independent Expert, for the purposes of
providing a fair and reasonable opinion on the terms of the Offer, including the Offer Consideration.

The opinions of the Independent Expert and the Independent Board will be included in the Scheme Circular to be
distributed to Beige shareholders.

UNDERTAKINGS
The Offeror has received irrevocable undertakings to vote in favour of the Scheme and the resolutions to be
proposed at the Scheme Meeting from the following Beige shareholders:

-     the Ceejay Trust, who, at the date of this Firm Intention Announcement, holds 89 252 082 Beige shares;
-     Noorsons Investment Trust, who, at the date of this Firm Intention Announcement, holds 5 000 000 Beige
      shares;
-     Orion Properties 33 Proprietary Limited, who, at the date of this Firm Intention Announcement, holds
      4 842 489 Beige shares; and
-     Mr David Hermanus Jacobs, who, at the date of this Firm Intention Announcement, holds 28 384 365 Beige
      shares,

representing approximately 29.45% of the Beige shareholders entitled to vote at the Scheme Meeting.

The Beige Board and Beige management have undertaken not to solicit any offer, or initiate any discussions with
any third party, in connection with the sale of any shares in, or part or the whole of the business of, Beige from
the signature date of the firm intention offer letter until Wednesday, 24 August 2016.

TERMINATION OF THE BEIGE LISTING
On completion of the Proposed Transaction, Beige will be delisted from the JSE.

SCHEME CIRCULAR TO SHAREHOLDERS
The Scheme Circular relating to the Proposed Transaction incorporating the terms of the Scheme, a notice of
Scheme Meeting and a form of proxy will be posted to Beige shareholders on or around Wednesday, 20 July
2016. The salient dates and times in relation to the Scheme will be published on the date of posting the Scheme
Circular and will also be contained in the Scheme Circular to Beige shareholders relating to the Scheme.

RESPONSIBILITY STATEMENT
The Offeror and the Independent Board of Beige accept responsibility for the information contained in this firm
intention announcement, and to the best of their respective knowledge and belief, the information is true and,
where appropriate, this firm intention announcement does not omit anything likely to affect the importance of
the information included.

WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Following the release of this firm intention announcement, the cautionary announcements previously published
by Beige on 13 May 2016 and 22 June 2016 on the Stock Exchange News Service is hereby withdrawn.

Johannesburg
12 July 2016

Designated Advisor
Arbor Capital Sponsors Proprietary Limited

Date: 12/07/2016 04:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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