Wrap Text
Firm Intention Announcement
ASTRAPAK LIMITED RPC GROUP PLC
Incorporated in the Republic of South Africa Incorporated in England and Wales
(Registration number 1995/009169/06) (Company Number 2578443)
Share code: APK ISIN: ZAE000096962 ISIN: GB0007197378
Share code: APKP ISIN: ZAE000087201 LSE share code: RPC
(“Astrapak” or “the Company”) (“RPC”)
FIRM INTENTION ANNOUNCEMENT RELATING TO:
- AN OFFER BY RPC TO ACQUIRE ALL OF THE ISSUED ORDINARY SHARES OF ASTRAPAK
(OTHER THAN CERTAIN EXCLUDED ORDINARY SHARES OF ASTRAPAK); AND
INCLUDING INFORMATION PERTAINING TO:
- THE PROPOSED VOLUNTARY REPURCHASE BY ASTRAPAK OF ALL OF THE ISSUED
PREFERENCE SHARES OF ASTRAPAK;
- THE PROPOSED UNBUNDLING OF CERTAIN ASSETS OF ASTRAPAK AND THE LISTING OF
MASTER PLASTICS ON THE ALTERNATIVE EXCHANGE OF THE JSE; AND
- THE WITHDRAWAL OF THE ASTRAPAK CAUTIONARY ANNOUNCEMENT.
1. OFFER BY RPC TO ACQUIRE ALL OF THE ISSUED ORDINARY SHARES OF ASTRAPAK
(OTHER THAN CERTAIN EXCLUDED ORDINARY SHARES OF ASTRAPAK)
1.1 Introduction
Further to the cautionary announcement released on SENS on 22 January 2016 and the
subsequent renewals of such cautionary announcement, the last of which was dated
10 November 2016, the board of directors of RPC (“RPC Board”) and the board of directors
of Astrapak (“Astrapak Board”) are pleased to announce that RPC has made a firm offer
(“Offer”) to acquire, either itself or through its wholly-owned subsidiary (“RPC Nominee”), all
of the issued ordinary shares of Astrapak (“Astrapak Ordinary Shares”), excluding
12 837 424 Astrapak Ordinary Shares held as treasury shares (“Treasury Shares”) and
1 258 594 Astrapak Ordinary Shares held by the Astrapak Limited Linked Unit Trust (which
operates the Astrapak Limited Share Option Scheme) (“ASOS Trust”), being a total of
121 035 232 Astrapak Ordinary Shares (“Ordinary Scheme Shares”) (“Proposed Transaction”),
by way of a scheme of arrangement in terms of section 114 of the Companies Act, 2008 (Act
71 of 2008), as amended, (“Companies Act”), to be proposed by the Astrapak Board to the
holders (“Astrapak Ordinary Shareholders”) of Astrapak Ordinary Shares (“Ordinary
Share Scheme”).
The Offer, which was submitted to Astrapak on 13 December 2016, was accepted by
Astrapak on 14 December 2016 and became binding on 14 December 2016. RPC and
Astrapak have also concluded a written transaction implementation agreement
(“Implementation Agreement”) dated 14 December 2016 (“Signature Date”) in relation to
the Proposed Transaction.
The Offer has been submitted on the basis that:
1.1.1 the non-redeemable, non-participating, cumulative preference shares issued by
Astrapak, comprising a total of 1 500 000 preference shares with a par value of
R0.001 per share (“Astrapak Preference Shares”), will be voluntarily repurchased
by Astrapak prior to, or in parallel with, the implementation of the Proposed
Transaction at a repurchase consideration of R100.00 per Astrapak Preference
Share; and
1.1.2 Astrapak’s non-core assets comprising its direct or indirect interests in K2016323930
(South Africa) Proprietary Limited (to be renamed Master Plastics Proprietary
Limited) (“Master Plastics”), Peninsula Packaging, a division of Master Plastics
(“Peninsula Packaging”), Barrier Film Converters Proprietary Limited (“Barrier”),
the Coralline Investment division of Master Plastics (trading as “Plusnet Geotex”),
Micawber 451 (RF) Proprietary Limited, Micawber 430 Proprietary Limited and
certain immovable properties (as agreed between Astrapak and RPC) and such
other assets as further agreed between Astrapak and RPC (collectively the
“Non-Core Assets”) will prior to, or in parallel with, the Proposed Transaction, be
distributed to Astrapak Ordinary Shareholders.
Accordingly, the Astrapak Board has resolved, in addition to the Ordinary Share Scheme:
1.1.3 subject to the fulfilment of the conditions set out in paragraph 2.4 below, to
implement the voluntary repurchase of the Astrapak Preference Shares from the
holders (“Astrapak Preference Shareholders”) of the Astrapak Preference
Shares (“Repurchase of the Preference Shares”) by way of a scheme of
arrangement in terms of section 114 of the Companies Act to be proposed by the
Astrapak Board to the Astrapak Preference Shareholders (“Preference Share
Scheme”); and
1.1.4 to unbundle all its shares in Master Plastics, a recently established wholly-owned
subsidiary of Astrapak which will house all the Non-Core Assets, to Astrapak
Ordinary Shareholders by way of a distribution in specie in terms of
section 46(1)(a)(ii) of the Companies Act and section 46 of the Income Tax Act,
1962 (Act 58 of 1962), as amended, (“Income Tax Act”) (“Unbundling”), and
separately list the issued shares of Master Plastics on the Alternative Exchange of
the JSE (“AltX”) (“Listing”).
Further details of the Preference Share Scheme, the Unbundling and the Listing are set out
in paragraphs 2 and 4, respectively, below.
The purpose of this announcement is to, inter alia, advise Astrapak Ordinary Shareholders
and Astrapak Preference Shareholders (collectively “Astrapak Shareholders”), of the terms
and conditions of the Offer (“Firm Intention Announcement”), the terms and conditions of
the Preference Share Scheme, and the salient details of the Unbundling and the Listing.
Summary of the financial impact of the Ordinary Share Scheme, the Preference Share
Scheme and the Unbundling
The Ordinary Share Scheme could, if implemented, and if all amounts in paragraphs 1.2.1.1
to 1.2.1.4 below are paid in full, deliver an estimated consideration, pursuant to the Ordinary
Share Scheme, of R7.65 per Ordinary Scheme Share held on the record date in respect of
the Ordinary Share Scheme (“Ordinary Share Scheme Record Date”). In addition,
Astrapak Ordinary Shareholders will receive ordinary shares in Master Plastics via the
Unbundling. To clarify, the Ordinary Share Scheme could, if implemented, deliver a minimum
cash consideration of no less than R6.40 per Ordinary Scheme Share (“Ordinary Share
Scheme Minimum Consideration”), for each Ordinary Scheme Share held on the Ordinary
Share Scheme Record Date, plus R0.59 in respect of the Denver Property Amount detailed
in paragraph 1.2.1.3 below, plus the further potential amounts of R0.33 attributable to the
Completion Calculation Amount detailed in paragraph 1.2.1.2 below (calculated with
reference to Astrapak’s management accounts as at 31 October 2016) and R0.33
attributable to the Agterskot Litigation Consideration detailed in paragraph 1.2.1.4 below.
As per the pro forma financial effects set out in paragraph 4.4 below, Master Plastics had a
net asset value of R246.91 million as at 31 August 2016, representing R2.04 per Ordinary
Scheme Share. The net asset value of Master Plastics will vary to the date of Unbundling as
the financial position of Master Plastics changes. As at the close of trade on 14 December
2016, Astrapak Ordinary Shares were trading at R5.40 per Astrapak Ordinary Share.
Astrapak Preference Shareholders will receive R100.00 per Astrapak Preference Share,
together with all dividends accruing up to the day prior to the voluntary Repurchase of the
Preference Shares. As at the close of trade on 14 December 2016, Astrapak Preference
Shares were trading at R84.00 per Astrapak Preference Share.
1.2 Potential Aggregate Ordinary Share Scheme Consideration
1.2.1 In terms of the Offer, the total consideration has been determined with reference to
an enterprise value of the operational assets being acquired by RPC of
R1,370 million, on a cash free debt free basis. The enterprise value has been
determined based on, inter alia, the audited FY16 earnings before interest taxation
depreciation and amortisation (“EBITDA”) of the manufacturing operations of
R219 million, equivalent to an enterprise value to EBITDA FY16 multiple of
approximately 6.3 times. Astrapak Ordinary Shareholders will / may potentially
receive, if the Ordinary Share Scheme is implemented, the aggregate of:
1.2.1.1 the Ordinary Share Scheme Minimum Consideration;
1.2.1.2 the “Completion Calculation Amount”, being the difference between the
“Ordinary Share Scheme Consideration” (as defined in and which will
be determined in accordance with paragraph 1.2.6 below) and the
Ordinary Share Scheme Minimum Consideration, which amount will be
calculated and paid as set out in paragraphs 1.2.6 and 1.2.7 below;
1.2.1.3 the “Denver Property Amount”, being an amount equal to the purchase
consideration, net of any applicable taxes, received or to be received by
the Company after the Signature Date in respect of the sale of certain of
the Company’s properties located in Denver and Doornfontein, in the
aggregate amount of R72 040 925 (“Denver Property”), which amount
will be paid as set out in paragraph 1.2.8 below; and
1.2.1.4 the potential “Agterskot Litigation Consideration”, being a maximum
aggregate amount equal to R40 000 000 which is attributable to certain
litigation matters and/or disputes to which the Astrapak Group, as at the
Signature Date, is a party (“Existing Litigation Matter(s)”), which
amount will be adjusted and paid as set out in paragraph 1.2.9 below,
which amounts, in each instance, are free of exchange and bank commission and
without any set off and/or deduction.
1.2.2 The Completion Calculation Amount, the Denver Property Amount and the potential
Agterskot Litigation Consideration are collectively referred to hereinafter as the
“Agterskot Consideration”.
1.2.3 The aggregate consideration actually paid to "Ordinary Share Scheme
Participants", being holders of Ordinary Scheme Shares who are entitled to such
consideration pursuant to the Ordinary Share Scheme, will not be less than the
Ordinary Share Scheme Minimum Consideration.
1.2.4 The Ordinary Share Scheme Minimum Consideration has been calculated with
reference to Astrapak’s management accounts as at 31 October 2016.
1.2.5 The potential consideration, comprising the aggregate of the Ordinary Share
Scheme Minimum Consideration and the Agterskot Consideration, calculated with
reference to Astrapak’s management accounts as at 31 October 2016, and on the
basis outlined in the Implementation Agreement, is R7.65 per Ordinary Scheme
Share.
1.2.6 Astrapak's management representatives will prepare a document setting out the
calculation (“Calculation Document”) of the consideration payable to Ordinary
Share Scheme Participants in respect of the Ordinary Share Scheme (excluding the
Denver Property Amount and the Agterskot Litigation Consideration) (“Ordinary
Share Scheme Consideration”), which will be determined by:
1.2.6.1 updating the illustrative table of debt and debt-like items used to calculate
the Ordinary Share Scheme Minimum Consideration to reflect the
relevant amounts set out in the unaudited management accounts of
Astrapak and the entities and businesses forming part of Astrapak’s core
assets (“Astrapak Group”) as at and for the period which commenced on
the day after 29 February 2016 and ends on the date on which the last of
the suspensive conditions to which the implementation of the Ordinary
Share Scheme will be subject (“Ordinary Share Scheme Conditions”),
has been fulfilled or waived, if applicable (“Ordinary Share Scheme
Conditions Fulfilment Date”) (“Completion Accounts”); and
1.2.6.2 calculating the Ordinary Share Scheme Consideration, on the basis
outlined in the Implementation Agreement, with reference to the
Completion Accounts.
The Calculation Document and the Completion Accounts are collectively referred to
hereinafter as the “Ordinary Share Scheme Completion Documents”. The
Ordinary Share Scheme Completion Documents will be prepared within seven days
of the Ordinary Share Scheme Conditions Fulfilment Date, after which RPC and
Lereko Metier Capital Growth Fund Managers Proprietary Limited, in its capacity as
the Astrapak Ordinary Shareholder representative and the asset manager of the
largest Astrapak Ordinary Shareholder, will be afforded a seven day time period to
consider the Ordinary Share Scheme Completion Documents. Any disputes
regarding the Ordinary Share Scheme Completion Documents will be resolved by an
independent expert, in accordance with the expedited process provided for in the
Implementation Agreement.
1.2.7 Should the Ordinary Share Scheme Consideration calculated in accordance with the
Ordinary Share Scheme Completion Documents:
1.2.7.1 exceed the Ordinary Share Scheme Minimum Consideration, RPC will,
within seven days of the Ordinary Share Scheme Consideration being
finally agreed, determined or deemed to have been determined, pay the
Completion Calculation Amount to Astrapak’s Transfer Secretaries
(“Transfer Secretaries”) to be distributed to the Ordinary Share Scheme
Participants in respect of the Astrapak Ordinary Shares held by them on
the Ordinary Share Scheme Record Date; or
1.2.7.2 be less than the Ordinary Share Scheme Minimum Consideration, the
Ordinary Share Scheme Minimum Consideration will constitute the
Ordinary Share Scheme Consideration and no further amounts, other
than the potential Agterskot Litigation Consideration and the Denver
Property Amount (to the extent applicable), will be payable to the
Ordinary Share Scheme Participants.
1.2.8 If the purchase price in respect of the Denver Property:
1.2.8.1 has been received by the Astrapak Group prior to the Ordinary Share
Scheme Conditions Fulfilment Date, RPC will pay the Denver Property
Amount to the Transfer Secretaries by the fifth Business Day after the
Ordinary Share Scheme Conditions Fulfilment Date, for the Transfer
Secretaries to make payment to the Ordinary Share Scheme Participants
on the date on which the Ordinary Share Scheme is implemented
(“Ordinary Share Scheme Implementation Date”); or
1.2.8.2 has not been received by the Astrapak Group prior to the Ordinary Share
Scheme Conditions Fulfilment Date, RPC will pay the Denver Property
Amount as soon as possible but in any event by no later than five
Business Days of receipt thereof from the purchaser of the Denver
Property, to the Transfer Secretaries for the Transfer Secretaries to make
payment to the Ordinary Share Scheme Participants as soon as
reasonably possible after receipt thereof and in accordance with the
timetable to be approved by the JSE and/or the Takeover Regulation
Panel (“TRP”).
1.2.9 If the Existing Litigation Matter(s):
1.2.9.1 have been finally determined or settled and the relevant Agterskot
Litigation Consideration payable to the Ordinary Share Scheme
Participants in respect of such Existing Litigation Matter(s) has been
agreed, determined or deemed to be determined prior to the Ordinary
Share Scheme Conditions Fulfilment Date, an amount equal to the
relevant Agterskot Litigation Consideration so agreed, determined or
deemed to be determined shall be paid to the Transfer Secretaries by the
fifth Business Day after the Ordinary Share Scheme Conditions Fulfilment
Date, for the Transfer Secretaries to make payment to the Scheme
Participants on the Ordinary Share Scheme Implementation Date; or
1.2.9.2 have not been finally determined or settled and the relevant Agterskot
Litigation Consideration has not been agreed, determined or deemed to
be determined prior to the Ordinary Share Scheme Conditions Fulfilment
Date, the amount equal to the Agterskot Litigation Consideration relating
to the outstanding Existing Litigation Matter(s) will be paid within five
Business Days after the Ordinary Share Scheme Conditions Fulfilment
Date, into the trust bank account ("Escrow Account") held with the Legal
Advisor to RPC (“Escrow Agent”) for onward payment from time to time
by the Escrow Agent to the Transfer Secretaries once each outstanding
Existing Litigation Matter(s) have been finally determined or settled and
the applicable Agterskot Litigation Consideration payable to the Scheme
Participants agreed, determined or deemed to be determined, for the
Transfer Secretaries to make payment to the Scheme Participants, as
soon as reasonably possible after receipt thereof and in accordance with
the timetable to be approved by the JSE and/or the TRP.
1.3 Background and rationale for the Ordinary Share Scheme
With annualised revenues of approximately £2.5 billion (pro forma adjusted for acquisitions)
for the year ended March 2016 and a market capitalisation of over £3.5 billion, RPC is an
international plastic products design and engineering company listed on the London Stock
Exchange. RPC operates in 31 countries and employs over 20 000 people. RPC serves a
wide range of customers, including many blue chip organisations across food and non-food
packaging, personal and healthcare and other segments, and has a strong track record of
technical expertise and product innovation across multiple polymer conversion processes.
RPC’s strategy is to grow and develop leading positions in its chosen product-markets and
geographies in the plastics’ industry by establishing strong long-term relationships with its
customers and by developing high quality, innovative products that meet customers’ needs.
The RPC Board believes that Astrapak is an excellent fit in terms of their strategy to increase
the company’s manufacturing footprint outside Europe, with South Africa becoming an
increasingly important market. In addition, the Proposed Transaction would enable RPC to
establish a platform for growth in Sub-Saharan Africa, positioning the combined group to
expand further into the high growth African markets.
The RPC Board has followed the progress that Astrapak has made in implementing its
restructuring initiatives. Notwithstanding such progress, the RPC Board believes that
Astrapak would benefit further from the additional development opportunities that the
Proposed Transaction would provide. Furthermore, Astrapak would also benefit from greater
economies of scale and market access under the RPC umbrella, as well as enhanced
innovation capabilities. The intention of the RPC Board is, as it has done with each of the
companies it has acquired over the last several years, to support the further development of
Astrapak.
1.4 Conditions to the distribution of the circular to Astrapak Shareholders
1.4.1 The distribution of the circular to Astrapak Shareholders as detailed in paragraph 3
below (“Schemes Circular”) is subject to the suspensive conditions (“Posting
Conditions”) that:
1.4.1.1 by not later than 23:59 on 31 January 2017:
1.4.1.1.1 in terms of the facility agreement between Nedbank
Limited and Astrapak which requires consent where there
is a change in control, Nedbank Limited has consented to
the implementation of the Proposed Transaction;
1.4.1.1.2 a written non-recourse warranty and indemnity policy with
an insurer has been concluded by Astrapak and RPC;
1.4.1.1.3 the independent expert as referred to in section 114(2) of
the Companies Act (“Independent Expert”) appointed by
the independent directors of the Astrapak Board
(“Astrapak Independent Board”) issues a report dealing
with the matters set out in section 114(3) of the Companies
Act (“Independent Expert Report”) in respect of:
1.4.1.1.3.1 the Offer; and
1.4.1.1.3.2 the voluntary Repurchase of the Preference
Shares;
1.4.1.1.4 the Independent Expert confirms, in writing, that the
minimum Ordinary Share Scheme Consideration, including
as potentially adjusted pursuant to the potential Agterskot
Consideration is, in its opinion, fair and reasonable to the
Astrapak Ordinary Shareholders;
1.4.1.1.5 the Astrapak Independent Board has made, in writing, an
unqualified and unconditional recommendation to the
Astrapak Board and the Astrapak Ordinary Shareholders
that the Astrapak Ordinary Shareholders should vote in
favour of the special resolution required to approve the
Ordinary Share Scheme ("Independent Board
Recommendation") at the meeting to be convened to
approve the Proposed Transaction (“General Meeting of
Ordinary Shareholders”);
1.4.1.1.6 the requisite exchange control approvals have been
obtained; and
1.4.1.1.7 the Schemes Circular has been approved by the JSE, the
TRP and the South African Reserve Bank (“SARB”).
1.5 Conditions to the implementation of the Ordinary Share Scheme
1.5.1 The implementation of the Ordinary Share Scheme is subject to the suspensive
conditions (“Ordinary Share Scheme Conditions”) that:
1.5.1.1 by not later than 23:59 on 31 March 2017 or such later date as Astrapak
and RPC may agree to in writing (“Long-Stop Date”):
1.5.1.1.1 in respect of the voluntary Repurchase of the Preference
Shares at a repurchase price of R100.00 per Preference
Share:
1.5.1.1.1.1 the Astrapak Board passes a written resolution
in accordance with the provisions of section 46
of the Companies Act:
1.5.1.1.1.1.1 authorising the voluntary
repurchase of the Preference
Shares by the Company; and
1.5.1.1.1.1.2 acknowledging that it has
applied the solvency and
liquidity test, as set out in
section 4 of the Companies
Act, and has reasonably
concluded that the Company
will satisfy the solvency and
liquidity test immediately after
the voluntary repurchase of the
Preference Shares;
1.5.1.1.1.2 a special resolution has been passed by the
requisite majority of Astrapak Ordinary
Shareholders and Astrapak Preference
Shareholders entitled to vote on the voluntary
Repurchase of the Preference Shares
approving the voluntary repurchase in
accordance with section 48 of the Companies
Act;
1.5.1.1.1.3 a special resolution has been passed by the
requisite majority of Astrapak Preference
Shareholders entitled to vote on the voluntary
Repurchase of the Preference Shares,
approving the voluntary repurchase in
accordance with section 114 and
section 115(2)(a) of the Companies Act and
(i) to the extent required, the implementation of
such special resolution is approved by a court
of competent jurisdiction (“Court”); and (ii) if
applicable, Astrapak has not elected to treat
such special resolution as a nullity pursuant to
section 115(5)(b) of the Companies Act; and
1.5.1.1.1.4 Astrapak has not elected to treat the special
resolution in paragraph 1.5.1.1.1.3 above as a
nullity pursuant to section 115(5) of the
Companies Act and a Court has granted its
approval pursuant to section 115(3) of the
Companies Act in circumstances where:
1.5.1.1.1.4.1 the special resolution referred
to in paragraph 1.5.1.1.1.3
above is opposed by 15% or
more of the voting rights that
were exercised in respect of
that special resolution; and
1.5.1.1.1.4.2 an Astrapak Preference
Shareholder who voted against
the special resolution requires
Astrapak, within five Business
Days after the vote, to seek
Court approval pursuant to
section 115(3) of the
Companies Act;
1.5.1.1.1.5 if the special resolution referred to in paragraph
1.5.1.1.1.3 above is not opposed by 15% or
more of the voting rights that were exercised in
respect of that special resolution, no leave is
granted by a Court to any Astrapak Preference
Shareholder who voted against that special
resolution to apply to such Court for a review of
the Preference Share Scheme pursuant to
section 115(6), read together with
section 115(3)(a), of the Companies Act;
1.5.1.1.1.6 RPC has elected in writing to proceed with the
Proposed Transaction in circumstances where,
within the time period prescribed in
section 164(7) of the Companies Act, Astrapak
Preference Shareholders have exercised
appraisal rights, by giving valid demands
pursuant to sections 164(5) to (8) of the
Companies Act, in respect of 5% or more of all
the Preference Shares;
1.5.1.1.2 the Unbundling is fully implemented;
1.5.1.1.3 a special resolution has been passed, at the General
Meeting of Ordinary Shareholders, by the requisite majority
of Astrapak Ordinary Shareholders entitled to vote on the
Ordinary Share Scheme, approving the Ordinary Share
Scheme in accordance with section 115(2)(a) of the
Companies Act (including to the extent required, an
amendment to the ASOS Trust for the repurchase by Master
Plastics of any of its shares distributed to the ASOS Trust
pursuant to the Unbundling) and (i) to the extent required,
the implementation of such special resolution is approved by
a Court; and (ii) if applicable, Astrapak has not elected to
treat such special resolution as a nullity pursuant to
section 115(5)(b) of the Companies Act; and
1.5.1.1.4 Astrapak has not elected to treat the special resolution in
paragraph 1.5.1.1.3 above as a nullity pursuant to
section 115(5) of the Companies Act and a Court has
granted its approval pursuant to section 115(3) of the
Companies Act in circumstances where:
1.5.1.1.4.1 the special resolution referred to in paragraph
1.5.1.1.3 above is opposed by 15% or more of
the voting rights that were exercised in respect
of such special resolution; and
1.5.1.1.4.2 an Astrapak Ordinary Shareholder who voted
against the special resolution requires
Astrapak, within five Business Days after the
vote, to seek Court approval pursuant to
section 115(3) of the Companies Act;
1.5.1.1.5 if the special resolution referred to in paragraph 1.5.1.1.3
above is not opposed by 15% or more of the voting rights
that were exercised in respect of that special resolution, no
leave has been granted by a Court to any Astrapak
Ordinary Shareholder who voted against that special
resolution to apply to such Court for a review of the
Proposed Transaction pursuant to section 115(6), read
together with section 115(3)(a), of the Companies Act;
1.5.1.1.6 RPC has elected to proceed with the Proposed
Transaction in circumstances where, within the time period
prescribed in section 164(7) of the Companies Act,
Astrapak Ordinary Shareholders have exercised appraisal
rights, by giving valid demands pursuant to sections 164(5)
to (8) of the Companies Act, in respect of 5% or more of all
the Ordinary Scheme Shares;
1.5.1.1.7 the Proposed Transaction has been unconditionally
approved by the South African Competition Authorities, or
conditionally approved on terms and conditions which are
acceptable to RPC; and
1.5.1.2 by not later than 23:59 on the third Business Day following the fulfilment
(or waiver, as the case may be) of the last of the Ordinary Share Scheme
Conditions set out in paragraph 1.5.1.1 above, the TRP has issued a
compliance certificate with respect to the Proposed Transaction pursuant
to section 119(4)(b) of the Companies Act; provided that, if such
compliance certificate is issued conditionally or on terms, this Ordinary
Share Scheme Condition will not be regarded as having been fulfilled
unless RPC confirms in writing (by not later than the said date and time)
that such conditions and terms are acceptable to RPC, which confirmation
will not be unreasonable withheld or delayed.
1.6 Astrapak Ordinary Shareholder Undertakings
To date, irrevocable undertakings to vote in favour of the Ordinary Share Scheme have been
received from the following Astrapak Ordinary Shareholders holding in aggregate 62 044 166
Astrapak Ordinary Shares, representing 51.26% of the voting power if all Ordinary Scheme
Shares are voted at the General Meeting of Ordinary Shareholders or any adjournment
thereof.
Ordinary
Ordinary Share
Date of Shares Scheme
irrevocable subject to voting
Ordinary Shareholder undertaking undertaking rights (%)
Lereko Metier Capital Growth Fund 13 December 2016 39 264 394 32.44
Prudential Investment Managers 13 December 2016 9 371 616 7.74
Element Investment Managers 13 December 2016 7 158 253 5.91
Sanlam Investment Management 13 December 2016 6 249 903 5.16
62 044 166 51.26
1.7 Astrapak Ordinary Shareholder Letter of Comfort
A letter of comfort dated 12 December 2016, confirming the intent to vote in favour of the
Ordinary Share Scheme, has been received from Coronation Asset Management Proprietary
Limited which holds, on behalf of its clients, in aggregate 34 379 967 Astrapak Ordinary
Shares, representing 28.40% of the voting power if all Ordinary Scheme Shares are voted at
the General Meeting of Ordinary Shareholders or any adjournment thereof.
1.8 Guarantees and confirmation to the TRP
Absa Bank Limited, has delivered an irrevocable, unconditional bank guarantee in the
amount of R1 400 000 000.00 (“Cash Guarantee”) to the TRP in compliance with
regulations 111(4) and 111(5) of the Takeover Regulations.
1.9 Termination of the Astrapak Ordinary Shares
Following implementation of the Ordinary Share Scheme, application will be made to the
JSE to terminate the listing of the Astrapak Ordinary Shares on the JSE.
1.10 Acting as principal
RPC confirms that it is, through its wholly-owned subsidiary, RPC Nominee, the ultimate
proposed purchaser of all the Astrapak Ordinary Shares and that it is not acting as agent or
broker for any other party. No party is acting in concert with RPC.
1.11 Recommendation and Independent Expert Opinion
The Astrapak Independent Board has appointed Grant Thornton as the Independent Expert,
as required in terms of section 114(2) of the Companies Act and the Takeover Regulations,
to issue a report dealing with the matters set out in section 114(3) of the Companies Act and
to express an opinion on whether the Offer is fair and reasonable.
The contents of the Independent Expert's advice and opinion and the final views of the
Astrapak Independent Board will be detailed in the Schemes Circular referred to in
paragraph 3 below.
1.12 Astrapak Independent Board responsibility statement
The Astrapak Independent Board, consisting of Phumzile Langeni, Thabo Mokgatlha, Craig
McDougall and Günter Steffens, accepts responsibility for the information contained in this
Firm Intention Announcement to the extent that it relates to Astrapak. To the best of its
knowledge and belief, the information contained in this Firm Intention Announcement is true
and nothing has been omitted that is likely to affect the import of the information.
1.13 RPC responsibility statement
The RPC Board accepts responsibility for the information contained in this Firm Intention
Announcement to the extent that it relates to RPC. To the best of its knowledge and belief,
the information contained in this Firm Intention Announcement is true and nothing has been
omitted that is likely to affect the import of the information.
2 THE VOLUNTARY REPURCHASE BY ASTRAPAK OF ALL OF THE ISSUED PREFERENCE
SHARES OF THE COMPANY
2.1 Introduction
The Preference Share Scheme will, if implemented, result in the voluntary repurchase by
Astrapak of all the Astrapak Preference Shares, whereby the Preference Shareholders will
be obliged to sell to the Company, 100% of the issued Preference Shares for the Preference
Share Scheme Consideration, as detailed in paragraph 2.2 below.
2.2 Preference Share Scheme Consideration
In terms of the Preference Share Scheme, Astrapak Preference Shareholders will, if the
Preference Share Scheme is implemented, receive for each Preference Scheme Share held
by them on the Preference Share Scheme consideration record date (“Preference Share
Scheme Record Date”), a cash consideration of R100.00 per Preference Scheme Share on
the date that the Preference Share Scheme is implemented (“Preference Share Scheme
Implementation Date”) (“Preference Share Scheme Consideration”).
All dividends that fall due to Preference Shareholders prior to the Preference Share Scheme
Implementation Date will be paid in the ordinary course, in compliance with their terms.
2.3 Background and rationale for the Preference Share Scheme
As set out in paragraph 1.1 above, the Offer was submitted by RPC on the basis that, inter
alia, the Astrapak Preference Shares will be voluntarily repurchased by Astrapak prior to, or
in parallel with, the implementation of the Ordinary Share Scheme.
Accordingly, the Astrapak Board has resolved to implement the voluntary repurchase of the
Astrapak Preference Shares via the Preference Share Scheme.
2.4 Conditions to the implementation of the Preference Share Scheme
2.4.1 The implementation of the Preference Share Scheme is subject to the suspensive
conditions (“Preference Share Scheme Conditions”) that:
2.4.1.1 by not later than 23:59 on the Long-Stop Date:
2.4.1.1.1 the fulfilment or waiver (as the case may be) of the matters
set out in paragraph 1.5.1.1.1 above; and
2.4.1.1.2 the requisite unconditional written approvals have been
obtained from, inter alia, all governmental and regulatory
bodies, including but not limited to the JSE, the TRP and the
SARB.
2.5 Astrapak Preference Shareholder Undertakings
To date, irrevocable undertakings to vote in favour of the Preference Share Scheme have
been received from the following Astrapak Preference Shareholders holding in aggregate
462 496 Astrapak Preference Shares, representing 30.83% of the voting power if all
Preference Scheme Shares are voted at the General Meeting of Preference Shareholders or
any adjournment thereof.
Preference
Preference Share
Shares Scheme
Date of irrevocable subject to voting
Preference Shareholder undertaking undertaking rights (%)
Aylett & Co 13 December 2016 190 475 12.70
Element Investment Managers 13 December 2016 154 744 10.32
Prudential Investment Managers 13 December 2016 75 750 5.05
Momentum Asset Management 13 December 2016 41 527 2.77
462 496 30.83
2.6 Astrapak Preference Shareholder Letter of Comfort
A letter of comfort dated 12 December 2016, confirming the intent to vote in favour of the
Preference Share Scheme, has been received from Coronation Asset Management
Proprietary Limited which holds, on behalf of its clients, in aggregate 48 375 Astrapak
Preference Shares, representing 3.23% of the voting power if all Preference Scheme Shares
are voted at the General Meeting of Preference Shareholders or any adjournment thereof.
2.7 Guarantees and confirmation to the TRP
Nedbank Limited has delivered an irrevocable, unconditional bank guarantee in the amount
of R150 000 000.00 (“Preference Share Cash Guarantee”), to the TRP in compliance with
regulations 111(4) and 111(5) of the Takeover Regulations. The sole purpose of the
Preference Share Cash Guarantee is to discharge the Preference Share Scheme
Consideration.
2.8 Termination of the Astrapak Preference Shares
Following implementation of the Preference Share Scheme, application will be made to the
JSE to terminate the listing of the Astrapak Preference Shares on the JSE.
2.9 Recommendation and Independent Expert Opinion
The Astrapak Independent Board has appointed Grant Thornton as the Independent Expert,
as required in terms of section 114(2) of the Companies Act and the Takeover Regulations,
to issue a report dealing with the matters set out in section 114(3) of the Companies Act and
to express an opinion on whether the Preference Share Scheme Consideration is fair and
reasonable.
The contents of the Independent Expert's advice and opinion and the final views of the
Astrapak Independent Board will be detailed in the Schemes Circular referred to in
paragraph 3 below.
3 DOCUMENTATION
Details of the Proposed Transaction and the voluntary Repurchase of the Preference Shares will
be included in the Schemes Circular which will contain, inter alia, details of the Ordinary Share
Scheme, details of the Preference Share Scheme, a notice of the General Meeting of Ordinary
Shareholders, a notice of the General Meeting of Preference Shareholders, the relevant forms of
proxy in respect of the General Meetings of Ordinary Shareholders and Preference Shareholders,
and the relevant forms of surrender and transfer for use by certificated Ordinary Shareholders and
certificated Preference Shareholders, as the case may be. The Schemes Circular is expected to be
distributed to Astrapak Shareholders on or about 27 January 2017.
The salient dates pertaining to the Ordinary Share Scheme and the Preference Share Scheme will
be released on SENS and published in the press prior to the distribution of the Schemes Circular.
4 THE PROPOSED UNBUNDLING AND LISTING
4.1 Introduction
In terms of the Listings Requirements of the JSE, where assets are unbundled and listed,
shareholder approval is not required. Furthermore, as the Unbundling does not constitute a
section 112 disposal in terms of the Companies Act, Astrapak Shareholders’ approval of the
Unbundling is not required. However, the successful completion of the Unbundling and
Listing will be subject to, inter alia, approval by the relevant regulatory authorities (including
the approval by the JSE of the Master Plastics pre-listing statement), as the case may be.
4.2 Background to and rationale for the Unbundling
As set out in Astrapak’s condensed unaudited interim results for the six months ended
31 August 2016, the Company’s three remaining flexibles operations namely, Peninsula
Packaging, Barrier and Plusnet Geotex (“Flexible Operations”), which were classified as
held-for-sale, are performing well and in line with budget in the aggregate.
The last 24 months of the implementation of Astrapak’s restructuring initiatives have seen
significant re-investment into, restructuring and repositioning of these Flexibles Operations,
thereby creating competitive operations which have the ability to be market leaders. These
operations, which are focussed on niche best-in-class technologies, have a wide geographic
footprint and are led by experienced management teams who are experts in their field.
The Unbundling will provide Astrapak Ordinary Shareholders with the opportunity to
participate directly in the Flexibles Operations.
4.3 Salient dates and documentation
The salient dates pertaining to the Unbundling and the Listing will be released on SENS and
published in the press prior to the distribution of the Master Plastics pre-listing statement,
which is expected to be distributed to Astrapak Shareholders in the first quarter of 2017.
4.4 Pro forma financial effects of the Unbundling
The following unaudited pro forma financial effects have been prepared to illustrate the
impact of the Unbundling on the reported financial information of Astrapak for the six months
ended 31 August 2016, had the Unbundling occurred on 1 March 2016 for statement of
comprehensive income purposes and as at 31 August 2016 for statement of financial
position purposes.
The unaudited pro forma financial effects have been prepared using accounting policies that
comply with IFRS and that are consistent with those applied in the annual financial
statements of Astrapak for the financial year ended 29 February 2016. The unaudited pro
forma financial effects, which are the responsibility of the Astrapak Board, are provided for
illustrative purposes only and, because of their pro forma nature, may not fairly present
Astrapak’s actual financial position, changes in equity, results of operations or cash flow.
Six months ended 31 August 2016
Before the After the Percentage
Unbundling Unbundling change (%)
Basic earnings per share (cents) (3.6) (8.2) (126.9)
Continuing operations (4.1) (5.8) (40.5)
Discontinued operations 0.5 (2.3) (569.6)
Headline earnings per share (cents) 4.5 (8.7) (293.3)
Continuing operations (4.7) (6.3) (34.0)
Discontinued operations 9.2 (2.3) (125.0)
Net asset value per share (cents) 837 633 (24.3)
Tangible net asset value per share (cents) 786 584 (25.7)
Weighted average number of shares in issue
(000’s) 121 035 121 035
Total number of shares in issue (000’s) 135 131 135 131
Notes:
1. The figures set out in the “Before the Unbundling” column were extracted from Astrapak’s
unaudited interim results for the six months ended 31 August 2016.
2. The effects on basic earnings per share and headline earnings per share are calculated based
on the assumption that the Unbundling was effected on 1 March 2016.
3. The effects on net asset value per share and tangible net asset value per share are calculated
based on the assumption that the Unbundling was effected as at 31 August 2016.
4. The figures set out in the “After the Unbundling” column reflect the financial effects of the
Unbundling on Astrapak and are based on the following assumptions:
4.1 As assets are to be unbundled by way of an in-specie dividend distribution no proceeds will
be received as this does not represent a disposal.
4.2 Transaction costs, which are once off in nature, will be for the account of Astrapak.
4.3 All financial effects, with the exception of the transaction costs, are ongoing.
5 WITHDRAWAL OF ASTRAPAK CAUTIONARY ANNOUNCEMENT
Astrapak Shareholders are referred to the cautionary announcement released on SENS on
22 January 2016 and the subsequent renewals of the cautionary announcement, the last of which
was dated 10 November 2016. Given the detail contained in this announcement, Astrapak
Shareholders are advised that they no longer need to exercise caution when dealing in the
Company’s securities.
Johannesburg
15 December 2016
Corporate Advisor and Transaction Sponsor to Astrapak
Merchantec Capital
Legal Advisor to Astrapak
Webber Wentzel
Corporate Advisor to RPC
Rothschild (South Africa) Proprietary Limited
Legal Advisor to RPC
Werksmans Inc.
Date: 15/12/2016 04:54:00 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.
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