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SHOPRITE HOLDINGS LIMITED - Proposed specific repurchase of Shoprite Holdings ordinary shares

Release Date: 05/05/2017 15:30
Code(s): SHP     PDF:  
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Proposed specific repurchase of Shoprite Holdings ordinary shares

SHOPRITE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1936/007721/06
ISIN: ZAE000012084
JSE Share code: SHP
NSX Share code: SRH
LuSE Share code: SHOPRITE
(“Shoprite Holdings” or the “Company”)

Proposed specific repurchase of Shoprite Holdings ordinary shares

1.   Introduction and background

     Shareholders are advised that Shoprite Holdings intends proposing a specific repurchase of
     8 683 327 Shoprite Holdings ordinary shares (“Shares”) from Bassgro Proprietary Limited
     (“Bassgro”) (“Specific Repurchase”) at a general meeting of the Company (“General
     Meeting”).

     In terms of an employment agreement concluded between Shoprite Holdings and Dr J.W.
     Basson (“Dr Basson”) in December 2003, Dr Basson is entitled to put Shares held either directly
     or indirectly by himself to Shoprite Holdings whilst still in the employ of Shoprite Holdings (“Put
     Option”), and Shoprite Holdings is obliged to repurchase such Shares at the middle market price
     of the Shares on the date of exercise of the Put Option (“Middle Market Price”).

     Dr Basson, in his personal capacity and as a duly authorised director of Bassgro, of which the
     Wellwood Basson Familietrust is the ultimate shareholder, notified Shoprite Holdings of the
     exercise of the Put Option on 2 May 2017 at the Middle Market Price of R211.01 per Share. The
     Shares do not represent the entire shareholding of Dr Basson or that of any related parties.

     The Specific Repurchase will further be subject to the provisions of the Memorandum of
     Incorporation of the Company, the Companies Act, No. 71 of 2008, as amended, and the JSE
     Limited (“JSE”) Listings Requirements, where applicable, including, inter alia, Shoprite Holdings’
     shareholder approval.

2.   Terms of the Specific Repurchase

     2.1     The Specific Repurchase will be effected through the repurchase by the Company from
             Bassgro of 8 683 327 Shares at a price of R211.01 per Share, being the Middle Market
             Price on 2 May 2017, at a total value of R1 832 268 830.27.

     2.2     The Specific Repurchase represents 1.447% of Shoprite Holdings Shares currently in
             issue.

     2.3     Application will be made to the JSE for the delisting of the Shares once the Specific
             Repurchase has been effected.

     2.4     The Specific Repurchase has no impact on the number of Shoprite Holdings treasury
             shares, which is 35 436 572 treasury shares.

     2.5     The date upon which the Specific Repurchase is to be made will be as soon as possible
             after the compliance with all required formalities, including the obtaining of Shoprite
             Holdings shareholder approval.

3.   Fairness opinion

     In terms of section 5.69(e) of the JSE Listings Requirements, if the Specific Repurchase:
     3.1     is from a “related party” as defined in section 10.1(b) of the JSE Listings Requirements;
             and
     3.2     is at a price which is at a premium to the weighted average traded price (“VWAP”) of the
             Shares measured over the 30 business days prior to the date that the Specific
             Repurchase is agreed,

     the board of directors of Shoprite Holdings (“Board”) must obtain a fairness opinion.

     In this regard, Bassgro (being an “associate” of Dr Basson, as defined in the JSE Listings
     Requirements) is deemed to be a “related party” to Shoprite Holdings. In addition, the Specific
     Repurchase will take place at the Middle Market Price of R211.01 per Share, which is at a 5.32%
     premium to the 30 day VWAP of the Shares up to an including 2 May 2017, being R200.36 per
     Share.

     In order to fulfil its obligations under the JSE Listings Requirements, the Board confirms that the
     Specific Repurchase will be subject to the inclusion of a statement by the Board in a circular to
     be posted to shareholders (“Circular”) confirming whether the Specific Repurchase is fair insofar
     as Shoprite Holdings shareholders are concerned and that the Board has been so advised by an
     independent expert. The Board is currently in the process of appointing an independent expert to
     obtain a fairness opinion.

4.   The impact of the Specific Repurchase on financial information

     It is intended to fund the Specific Repurchase through the use of existing bank facilities. As
     such, the impact of the Specific Repurchase on the financial information of Shoprite Holdings is
     as follows:

     4.1     an increase in interest charged of approximately R144 million per annum, assuming a
             weighted average interest rate of 7.87% per annum; and
     4.2     a decrease in Shoprite Holdings’ issued Shares by 8 683 327 Shares.


     The above financial information has not been reported on by the Company’s auditors.

5.   Salient dates and times

     A further announcement will be published in due course setting out the salient dates and times
     of the Specific Repurchase.

6.   Circular

     A circular proposing the Specific Repurchase, including full details of the Specific Repurchase
     and a fairness opinion as required by the JSE Listings Requirements, will be despatched to
     shareholders and the shareholders will also be advised of the date of the General Meeting in due
     course.


Cape Town

5 May 2017

Corporate Advisor and Sponsor
Nedbank Corporate and Investment Banking

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