To view the PDF file, sign up for a MySharenet subscription.

GRAND PARADE INVESTMENTS LIMITED - Category 1 Transaction Announcement: Proposed Acquisition by GPI of shares in Spur Corporation Limited

Release Date: 31/10/2016 17:22
Code(s): GPL     PDF:  
Wrap Text
Category 1 Transaction Announcement: Proposed Acquisition by GPI of shares in Spur Corporation Limited

GRAND PARADE INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1997/003548/06)
Share code: GPL
ISIN: ZAE000119814
(“GPI”)

CATEGORY 1 TRANSACTION ANNOUNCEMENT: PROPOSED ACQUISITION BY GPI OF
SHARES IN SPUR CORPORATION LIMITED AND CAUTIONARY ANNOUNCEMENT

1.   Introduction

     GPI is pleased to announce that it has entered into an agreement
     with Coronation Fund Managers Limited ("Coronation") to purchase
     between 16 380 620 and 19 465 119 ordinary shares in the issued
     share capital of Spur Corporation Limited (“Spur”) for a purchase
     consideration of R40 per share (“Proposed Transaction”).

     GPI, through a wholly owned subsidiary, already holds
     approximately 10% of the issued ordinary share capital of Spur
     for which it subscribed in 2014. Following the implementation of
     the Proposed Transaction, assuming that GPI acquires 19 465 119
     ordinary shares in Spur, GPI will hold approximately 28.82% of
     the issued ordinary share capital of Spur.

2.   Description of the business carried on by Spur

     Spur is a leading multi-brand restaurant franchisor,
     headquartered in Cape Town, and listed in the travel and leisure
     sector of the JSE Limited (“JSE”). Spur franchises five table
     service sit down restaurant brands: Spur Steak Ranches, Panarottis
     Pizza Pasta, John Dory’s Fish Grill Sushi, The Hussar Grill
     Steakhouse and Roco Mama’s. Spur is also the franchisor of Captain
     DoRego’s.

     Spur also manufactures, bottles and distributes certain of the
     sauces used in group restaurants. In addition, the group supports
     franchisees by managing the procurement function between
     suppliers, the group’s outsourced logistics service provider and
     its franchisees.

3.   Particulars of the Proposed Transaction

     In terms of the Proposed Transaction GPI will purchase between
     16 380 620 and 19 465 119 ordinary shares in the issued share
     capital of Spur (“Spur Shares”) from Coronation, for a purchase
     consideration of R40 per Spur Share which, assuming that GPI
     acquires 19 465 119 Spur Shares, equates to a total purchase
     consideration of R778 604 760 (“Purchase Consideration”).

     Coronation holds the Spur Shares on behalf of its clients and as
     such:

     i.   the total number of Spur Shares held by Coronation may include
          shares which are encumbered by its clients and not capable
          of sale to GPI; and

     ii.  Coronation may be required to dispose of a portion of the
          Spur Shares should a client terminate its mandate after this
          announcement.

     If at any time on or before the date of the implementation of the
     Proposed Transaction the number of Spur Shares held by Coronation
     and capable of being sold to GPI is less than 16 380 620 Spur
     Shares, GPI shall be under no obligation to purchase such lesser
     number of Spur Shares or to proceed with the Proposed Transaction.
     GPI may waive such right to not proceed with the Proposed
     Transaction in its discretion at any time prior to the date of
     implementation of the Proposed Transaction.

     The Purchase Consideration will be settled in cash, funded from
     a combination of cash reserves and debt.

     If the Purchase Consideration is not paid by 1 January 2017, then
     interest will accrue on such Purchase Consideration at the prime
     rate of interest as published by the Standard Bank of South Africa
     Limited, with effect from 1 January 2017.

4.   Rationale for the Proposed Transaction

     GPI has a track record of adding value to its investments and the
     board believes that the Proposed Transaction represents an
     attractive investment opportunity to increase its interest in
     Spur. The Proposed Transaction is in-line with GPI’s strategy to
     grow and diversify its investment portfolio beyond the gaming
     sector, focussing on businesses that meet management’s target IRR
     and other strategic objectives.

     GPI has identified a number of advantages relating to the Proposed
     Transaction which include, without limitation, the following:

     i.   the Proposed Transaction allows GPI to become a strategic
          shareholder in a well-established, multi-brand restaurant
          franchisor with solid growth prospects and a track record of
          delivering value to shareholders;

     ii.  Spur has a resilient operating model, proven over time and
          through difficult trading conditions;

     iii. a potential opportunity to form a strategic partnership with
          a leading franchise restaurant operator with extensive
          experience across Africa; and

     iv.  the potential to exploit synergies between Spur’s operations
          and certain of GPI’s existing businesses in the supply chain
          and quick service restaurant market and related food sectors.

5.   Condition precedent

     The Proposed Transaction is subject to the fulfilment of the
     condition precedent (“Condition Precedent”) that GPI obtains any
     and all necessary statutory and regulatory approvals for the
     implementation of the Proposed Transaction (including shareholder
     approval in terms of the JSE Listings Requirements).

     The Condition Precedent must be fulfilled by not later than
     31 January 2017, which date may be extended by either party in
     writing to the other party.

6.   Effective date of the Proposed Transaction

     Delivery and payment in respect of the Spur Shares shall take
     place on the 1st business day following the date on which the
     Condition Precedent is fulfilled.

7.   Pro forma financial effects

     As at the date of this announcement, the pro forma financial
     effects of the Proposed Transaction in relation to GPI have not
     yet been finalised and shareholders are hereby advised that the
     pro forma financial information will be announced in due course.

8.   Classification of the Proposed Transaction

     As the value of the Proposed Transaction exceeds 30% of GPI’s
     market capitalisation, it meets the definition of a category 1
     transaction as contemplated in section 9 of the JSE Listings
     Requirements.

     As a result, a general meeting of GPI shareholders will be
     convened and an ordinary resolution in respect of the Proposed
     Transaction will be required to be approved by GPI shareholders
     at the general meeting.

9.   Circular

     A circular containing the full details of the Proposed
     Transaction, incorporating a notice convening the required GPI
     general meeting, will be posted to shareholders in due course and
     the date of the general meeting will be announced on SENS once
     the circular is posted.

10. Cautionary

     GPI shareholders are advised that, due to the fact that the pro
     forma financial effects of the Proposed Transaction have not yet
     been announced, to exercise caution when dealing in their
     securities until such time as the pro forma financial information
     of the Proposed Transaction have been announced.

Cape Town
31 October 2016

Sponsor & Transaction Adviser
PSG Capital Proprietary Limited

Date: 31/10/2016 05:22:00 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.

Share This Story