LODESTONE REIT LIMITED - Lodestone/ Fortress - Finalisation announcement, salient dates and times, notice to invoke section 124(1)

Release Date: 25/11/2016 15:33
Code(s): LDO FFA FFB
 
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Lodestone/ Fortress - Finalisation announcement, salient dates and times, notice to invoke section 124(1)

LODESTONE REIT LIMITED                                  FORTRESS INCOME FUND LIMITED
(Incorporated in the Republic of South Africa)          (Incorporated in the Republic of South Africa)
(Registration number: 2010/017830/06)                   (Registration number: 2009/016487/06)
JSE share code: LDO ISIN: ZAE000197935                   JSE share codes: FFA ISIN: ZAE000192787
(Approved as a REIT by the JSE)                                           FFB ISIN: ZAE000192795
(“Lodestone”)                                           (Approved as a REIT by the JSE)
                                                        (“Fortress”)


FINALISATION ANNOUNCEMENT, SALIENT DATES AND TIMES OF THE GENERAL OFFER TO LODESTONE SHAREHOLDERS, NOTICE TO INVOKE SECTION 124(1) 
OF THE COMPANIES ACT AND APPORTIONMENT OF PROCEEDS


Introduction

Shareholders of Lodestone are referred to the announcement, released on SENS on 18 November 2016, advising
Lodestone shareholders that the general offer by Fortress to Lodestone shareholders to acquire all Lodestone shares by
exchange of 1 Fortress A ordinary share and 1 Fortress B ordinary share for every 6.66667 Lodestone shares held (the
“general offer”) had been accepted in respect of 91.20% of Lodestone shares, excluding Lodestone shares held before
the general offer by Fortress, persons which are related or inter-related to Fortress and persons deemed to be acting in
concert with Fortress.

Provisional results of general offer

As at 13:00 on Friday, 25 November 2016, Fortress has received acceptances from Lodestone shareholders in respect
of 232 519 529 Lodestone shares, representing 98.88% of all Lodestone shares in issue and 98.67% of Lodestone
shares excluding Lodestones shares held before the general offer by Fortress, persons which are related or inter-related
to Fortress and persons deemed to be acting in concert with Fortress.

Notice in terms of section 124(1) of the Companies Act

The general offer has been accepted by Lodestone shareholders holding at least 90% of the Lodestone shares other
that Lodestone shares held before the general offer by Fortress, persons which are related or inter-related to Fortress
and persons deemed to be acting in concert with Fortress. Accordingly, Fortress has elected to invoke section
124(1)(a) of the Companies Act, 71 of 2008 (the “Companies Act”) in order to compulsorily acquire the all of the
remaining Lodestone shares it does not already own (the “remaining offer shares”) on the same terms and conditions
as the general offer (the “compulsory acquisition”). Accordingly, notice to invoke section 124(1)(a) of the
Companies Act (the “notice of compulsory acquisition”) has been distributed to the holders of the remaining offer
shares (“remaining Lodestone shareholders”).

The remaining Lodestone shareholders are hereby advised that they are entitled to make an application to the Court in
terms of section 124(2) of the Companies Act within 30 business days after receiving the notice of compulsory
acquisition, being by 19 January 2017.

Upon the expiration of six weeks after the date on which the notice of compulsory acquisition was given, if:

-     no application has been made to court, or
-     such application has been made and the application has been disposed of; or
-     such application is pending,

then after:

-     it has been disposed of;
-     the date on which the demand in terms of section 124(4)(b) of the Companies Act has been received,

as the case may be, Fortress shall be entitled and bound to compulsorily acquire from the remaining Lodestone
shareholders the remaining offer shares in accordance with the provisions of section 124 of the Companies Act on the
same terms and conditions as the general offer.

Apportionment of proceeds

In accordance with regulation 102(12) of the Takeover Regulations, the general offer consideration will be settled
within six business days of acceptance thereof by a Lodestone shareholder. Thus, whilst all Lodestone shareholders
will receive 1 Fortress A ordinary share and 1 Fortress B ordinary share in exchange for every 6.66667 Lodestone
shares held, the apportionment of proceeds of the general offer would vary depending on what date a Lodestone
shareholder accepts the general offer. For the avoidance of doubt, the swap ratio in terms of the general offer as well
as the compulsory acquisition remains unchanged.

The purpose of this section of the announcement is to notify Lodestone shareholders of Lodestone’s calculation of the
apportionment of the proceeds received by Lodestone shareholders pursuant to the general offer, assuming the general
offer was accepted on 18 November 2016, as an illustrative worked example.

In this illustrative example, the apportionment of the proceeds has been calculated based on the closing prices of
Fortress A shares and Fortress B shares on 17 November 2016, being the date before the general offer is assumed to
have been accepted. For each 6.66667 Lodestone shares disposed of in terms of the general offer, the amount received
is R16.18 relating to the Fortress A ordinary share received (35.15863% of the proceeds per disposed Lodestone
share) and R29.84 relating to the Fortress B ordinary shares received (64.84137% of the proceeds per disposed
Lodestone share.

The tax treatment for Lodestone shareholders participating in the general offer is dependent on the individual
circumstances and jurisdiction of such Lodestone shareholders. It is recommended that if Lodestone shareholders are
uncertain about the tax treatment of the receipt of the Fortress A ordinary consideration shares and the Fortress B
ordinary consideration shares, they seek appropriate advice in this regard.

Salient dates and times for the general offer and compulsory acquisition

Lodestone shareholders are advised that the closing date of the general offer will be at 12:00 on Friday,
9 December 2016. The salient dates and times for the general offer and the compulsory acquisition are as follows:

                                                                                                                         2016
General offer opens                                                                                     Tuesday, 20 September

General offer declared unconditional                                                                    Thursday, 10 November

Maximum number of general offer consideration shares listed                                               Monday, 14 November

Notice given in terms of section 124 of the Companies Act and announced on SENS                           Friday, 25 November
Last day to trade in Lodestone shares in order to participate in the general offer                        Tuesday, 6 December
Listing of Lodestone shares suspended on the JSE with effect from the commencement
of trade on                                                                                             Wednesday, 7 December

General offer closes at 12:00 on                                                                           Friday, 9 December
General offer consideration record date on which Lodestone shareholders must hold
Lodestone shares in order to accept the general offer                                                      Friday, 9 December
                                                                                                 The first business day after
                                                                                                             the closing date
General offer consideration credited to dematerialised general offer participants’
account with the relevant CSDP or broker with last payment on                                                See note 5 below
General offer consideration posted to certificated general offer participants (subject to
                                                                                                 The first business day after
receipt by Lodestone’s transfer secretaries of documents of title on or prior to 12:00 on
                                                                                                             the closing date
the closing date and a duly completed form of acceptance, surrender and transfer) with
last payment on                                                                                              See note 5 below
                                                                                                                         2017
Last day to apply to Court in terms of section 124(2) of the Companies Act                               Thursday, 19 January
Compulsory acquisition of the Lodestone shares held by the remaining Lodestone
shareholders who have not accepted the general offer implemented in accordance with
section 124(5) of the Companies Act and JSE settlement procedures prior to the
closing date, at the commencement of business on                                                           Friday, 20 January
Date of payment of the general offer consideration to remaining Lodestone
shareholders who have submitted forms of surrender and/or whose details are known
and/or holding dematerialised Lodestone shares (unclaimed general offer consideration
shares to be held in trust subject to the provisions of section 124(8) of the Companies
Act and to be paid on demand)                                                                              Monday, 23 January
Termination of listing of Lodestone shares on the JSE from the commencement of
trade on                                                                                                  Tuesday, 24 January

Notes:

1.   All times indicated above are South African times.
2.   Any change to the above dates and times will be agreed upon by Fortress and the TRP and advised to Lodestone shareholders
     by release on SENS and, if required, published in the press.
3.   No dematerialisation or rematerialisation of Lodestone shares will take place between the first business day after the last day
     to trade and the record date, both days inclusive.
4.   The Lodestone shares that will be acquired from general offer participants will be acquired cum any distribution on the
     Lodestone shares in respect of which the record date for participation in such distribution occurs on or after the opening date,
     including the interim distribution to Lodestone shareholders for the period 1 April 2016 to 30 September 2016.
5.   The general offer consideration will be settled by way of the allotment and issue of the general offer consideration shares,
     within 6 business days of the acceptance of the general offer, prior to the closing date.

25 November 2016


Corporate advisor and sponsor to Fortress and designated advisor to Lodestone                   
Java Capital


Legal advisors to Fortress and Lodestone
Cliffe Dekker Hofmeyr        

Date: 25/11/2016 03:33:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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