SOVEREIGN FOOD INVESTMENTS LIMITED - Posting of the Response Circular and withdrawal of cautionary announcement

Posting of the Response Circular and withdrawal of cautionary announcement

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”)

 POSTING OF THE RESPONSE CIRCULAR AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT


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 Friday, 24 June 2016 (“Circular”)
and the announcement published by Sovereign on SENS on Friday, 22 July 2016.

1. POSTING OF THE RESPONSE CIRCULAR

   Shareholders are advised that the Response Circular, prepared by the independent board of directors of
   Sovereign that has been constituted in accordance with the Regulations (“Independent Board”),
   containing, inter alia:

   -  the fair and reasonable opinion of Mazars Corporate Finance Proprietary Limited (“Independent
      Expert”) in respect of the Offer Consideration, in accordance with Regulation 90, as read with sections
      114(2) and 114(3) of the Companies Act (“Fairness Opinion”);
   -  the Independent Board’s views regarding the Offer and the Offer Consideration and its opinion on the
      Offer Consideration, having, inter alia, obtained, and given due consideration to, the Fairness Opinion;
   -  the Independent Board’s comments on certain statements contained in the Offer Circular; and
   -  certain financial and other information and disclosures regarding the Company, as required in terms of
      Regulation 106(7),

   has been posted on Friday, 19 August 2016, to Shareholders recorded in the Register on Friday,
   12 August 2016. The Response Circular is also available on the Company’s website:
   www.sovereignfoods.co.za.

2. INDEPENDENT EXPERT’S OPINION

   The Independent Expert has, in accordance with Regulation 90, performed a valuation of the Offer Shares
   and provided its Fairness Opinion to the Independent Board.

   Taking into consideration the terms and conditions of the Offer and based on the results of the procedures
   performed, detailed valuation work and other considerations, as set forth in the Fairness Opinion, the
   Independent Expert is of the opinion that the Offer Consideration is fair and reasonable to Shareholders to
   whom the Offer has been made (“Eligible Shareholders”). A copy of the Fairness Opinion is included in
   the Response Circular.

   Shareholders are advised that certain factors have influenced the valuation of the Offer Shares since the
   previous valuation conducted by the Independent Expert (“Previous Valuation”) for purposes of the
   fairness opinion of the Independent Expert, dated Wednesday, 15 June 2016, pertaining to the Repurchase,
   which opinion was included in the Circular.

   In this regard, the Independent Board believes it necessary to communicate these factors to Eligible
   Shareholders, as detailed in paragraph 3.2 of the Response Circular, to assist Eligible Shareholders in
   assessing the valuation range disclosed in the Fairness Opinion vis-à-vis the Previous Valuation.

3. INDEPENDENT BOARD’S OPINION

    The Independent Board, after due consideration of the Fairness Opinion, has placed reliance on the opinion
    of the Independent Expert and is unanimously of the opinion that the Offer Consideration is fair and
    reasonable to Eligible Shareholders.

    Furthermore, to enable Eligible Shareholders to make an informed decision regarding the Offer, the
    Independent Board wishes to draw Eligible Shareholders’ attention to various factors which may be difficult
    to quantify or which are unquantifiable, as contemplated in Regulation 110(6), including, inter alia, the
    impact of the current market conditions, the current financial results and industry developments, as detailed
    in paragraph 3.3 of the Response Circular.

4. COMMENTS ON CERTAIN STATEMENTS IN OFFER CIRCULAR

    The Independent Board believes certain statements contained in the Offer Circular require clarification.
    Accordingly, Eligible Shareholders are referred to comments by the Independent Board in this regard, as
    detailed in paragraph 4 of the Response Circular.

5. RESPONSIBILITY STATEMENT

    The Independent Board, collectively and individually, accept responsibility for the information contained in
    this announcement and certify that, to the best of their knowledge and belief, the information contained in
    this announcement is true and nothing has been omitted which is likely to affect the importance of such
    information.

6. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT

    Shareholders are referred to the cautionary announcement published by Sovereign on SENS on Thursday,
    7 July 2016 and are advised that caution is no longer required to be exercised when dealing in the
    Company’s Shares.


Port Elizabeth
19 August 2016

Corporate advisor and sponsor
One Capital

Attorneys to Sovereign
Cliffe Dekker Hofmeyr Inc.

Date: 19/08/2016 02:40:00 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.