WINHOLD LIMITED - Firm Intention Announcement to acquire 100% of Issued Share Capital and Withdrawal of Cautionary

Release Date: 15/06/2017 14:57
Code(s): WNH
 
Wrap Text
Firm Intention Announcement to acquire 100% of Issued Share Capital and Withdrawal of Cautionary

WINHOLD LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1945/019679/06)
Share code: WNH  ISIN Code: ZAE 000033916
("Winhold" or "the company")

ANNOUNCEMENT OF FIRM INTENTION BY WAFIMA MANUFACTURING AND DISTRIBUTION
HOLDINGS PROPRIETARY LIMITED ("the offeror") TO ACQUIRE 100% OF THE ISSUED ORDINARY
SHARE CAPITAL OF WINHOLD AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT

1.  INTRODUCTION
    Shareholders are advised that on 12 May 2017 the board of directors of the
    company ("the board") was advised of a firm intention offer ("the offer")
    which was subject to the provision of a bank guarantee from the offeror, which
    guarantee has since been provided by the offeror's bank, to acquire 100%
    of the issued ordinary shares of the company ("the offer shares" and "the
    proposed transaction").

    It is intended that the proposed transaction will be implemented by means of
    a scheme of arrangement in terms of section 114 of the Companies Act, 2008
    ("the Act" and "the scheme").

    The proposed transaction is classified as an affected transaction in terms of
    the Act, and the board has therefore appointed a sub-committee of the board,
    comprising of Mr. H Jeena, Ms. R Naidoo and Ms. M Fry who are independent
    non-executive directors ("the independent committee"), to oversee
    the process, which will involve the appointment of an independent expert
    acceptable to the Takeover Regulation Panel ("the TRP" and "the expert").
    The expert will provide the independent committee with advice in regard to
    the offer and the scheme and make appropriate recommendations to the
    independent committee on behalf of Winhold shareholders.

    The recommendations of the board, the independent committee and the
    report of the expert will be included in a circular to the shareholders of Winhold
    containing the terms and conditions governing the offer and the scheme
    ("the scheme circular") which will be distributed to shareholders subject to
    the fulfilment of the conditions set out in paragraph 4 below.

2.  OFFER CONSIDERATION
    The consideration in terms of the offer is R1,25 per ordinary share
    ("offer  consideration"), payable in cash, an aggregate consideration of
    R156 882 236.

    The offer consideration is at a 50,66% premium to the 30 day VWAP of 83,
    cents per Winhold share traded on the Johannesburg Stock Exchange ("the
    JSE") on 25 May 2017, being the last business day immediately prior to the
    date of the cautionary announcement released on 26 May 2017.

3.  INFORMATION REGARDING THE OFFEROR AND RATIONALE FOR THE
    SCHEME
    The offeror is a special purpose company incorporated and controlled by
    Mr. Zola Fubu, who is one of the members of the BEE Consortium introduced
    into Winhold, through its subsidiaries, Inmins Trading Proprietary Limited and
    Gundle Plastics Group Proprietary Limited, in 2006. The BEE Consortium,
    together with qualifying employees of the subsidiaries, holds 25,1% of the
    issued share capital of each subsidiary. The effective interest of Mr. Fubu in
    each subsidiary is 5,8%, making him the biggest individual black shareholder in
    the subsidiaries. He operates as an independent distribution agent of Winhold
    through Fubu Plastics Group Proprietary Limited.

    The board and the major shareholders of the company have for some time
    been of the view that the share price of the company has not fully reflected the
    intrinsic value of the company.

    The issue of remaining listed in an environment where this reflection of value is
    not present has also been a concern.

    In the circumstances, the offer by the offeror is in the view of the board worthy
    of consideration by shareholders as envisaged above.

4.  CONDITIONS PRECEDENT TO THE POSTING OF THE SCHEME
    CIRCULAR
    The posting of the scheme circular is subject to the fulfilment of various
    conditions precedent, namely:

    4.1 the requisite approvals being received from the TRP and the JSE;
    4.2 the expert will have prepared and submitted a fair and reasonable opinion
         to the independent committee; and
    4.3 the independent committee and the board will have resolved to
         recommend acceptance of the offer to shareholders.

5.  CONDITIONS PRECEDENT TO THE SCHEME
    The scheme will be subject to the fulfilment of the following conditions
    precedent by 30 September 2017, or such later date as the offeror and the
    company may agree to in writing:

    5.1 approval of the scheme by the requisite majority of Winhold shareholders,
        as contemplated in section 115(2) of the Act, and:
        - to the extent required, the approval and the implementation of such
          resolution by the court as contemplated in section 115(3)(a) of the
          Act; and
        - if applicable, the company not treating the aforementioned resolution
          as a nullity, as contemplated in section 115(5)(b) of the Act; and
    5.2 Winhold shareholders not having exercised appraisal rights by giving
        valid demands to this effect to the company, in terms of section 164(7)
        of the Companies Act, in respect of more than 5% of the shares within
        30  business days following the scheme meeting, provided that, in the
        event that any Winhold shareholders give notice objecting to the scheme,
        as contemplated in section 164(3) of the Act, and those shareholders vote
        against the resolution proposed at the scheme meeting to approve the
        scheme, but do so in respect of no more than 5% of the Winhold shares,
        this condition shall be deemed to have been fulfilled at the time of the
        scheme meeting,

    5.3 by the date on which each of the abovementioned conditions is fulfilled
        or waived (as the case may be), an adverse effect, fact, circumstance
        which is or might reasonably be expected (alone or together with any
        other such adverse effect, fact or circumstance) to be material with regard
        to the operations, continued existence, business, condition, assets and
        liabilities of the company and its subsidiaries (whether as a consequence
        of the scheme or not) has not occurred. For the purposes of this clause,
        to be material, the adverse effect, fact or circumstance must constitute
        a change in the laws of the Republic of South Africa (including, without
        limitation, laws relating to taxation) which has (or may reasonably be
        expected to have) a material adverse effect upon the scheme such that
        the effective direct or indirect cost of the scheme to the offeror, including
        but not limited to the offer consideration, would increase by 15% or more.

The conditions other than those of a regulatory nature are stipulated for the benefit
of the offeror and may be waived by the offeror in its sole discretion by notice in
writing to the company. Conditions that are of a regulatory nature cannot be waived.

SHAREHOLDINGS, ACTING AS PRINCIPAL AND CONCERT PARTIES
The offeror confirms that it presently has no interest in any shares in the company,
that it is the ultimate proposed purchaser of all the offer shares and is not acting in
concert with, or as an agent or broker for, any other party.

FUNDING THE OFFER CONSIDERATION
The maximum scheme consideration will be R156 882 236. The offeror has
confirmed to the company that sufficient cash resources are available for the
payment of the scheme consideration in terms of the scheme, and The Standard
Bank of South Africa Limited has provided the necessary guarantee to the TRP to
satisfy the full offer consideration payable in compliance with Regulations 111(4) and
111(5) of the Act.

UNDERTAKINGS
The offeror has received irrevocable undertakings to vote in favour of the scheme
and the resolutions to be proposed at the scheme meeting from the following
Winhold shareholders:

- Astra Group Holdings Proprietary Limited, which at the date of this announcement
  holds 41 571 677 Winhold shares (32,94%);
- Mr. WAR Wenteler, who at the date of this announcement holds and controls
  17 373 466 Winhold shares (13,76%);
- Mr. AR Rapp, who at the date of this announcement holds and controls
  16 914 573 Winhold shares (13,40%);
- Mr. K Heynen who at the date of this announcement holds and controls
  6 002 000 Winhold shares (4,75%);
- Kendase Trust who at the date of this announcement holds and controls
  4 007 151 Winhold shares (3,17%);

representing approximately 68,02% of the Winhold shareholders entitled to vote at
the scheme meeting.

TERMINATION OF THE LISTING OF WINHOLD
Should the scheme be implemented as contemplated in this announcement,
Winhold will become a wholly-owned subsidiary of the offeror and application will be
made to the JSE to de-list the company.

SCHEME CIRCULAR
The scheme circular relating to the proposed transaction incorporating the terms of
the scheme, the notice of the scheme meeting and a form of proxy will be posted
to Winhold shareholders on or about 31 July 2017. The salient dates and times in
relation to the scheme will be published on the date of posting the scheme circular
and will also be contained in the scheme circular.

RESPONSIBILITY STATEMENT
The board, the independent committee and the offeror accept responsibility for the
information contained in this announcement, and certify that, to the best of their
respective knowledge and belief, the information is true and, where appropriate,
this announcement does not omit anything likely to affect the importance of the
information included.

WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
The cautionary announcement issued on 26 May 2017 is hereby withdrawn.

By order of the board
John O'Connor
Company secretary

Germiston
15 June 2017

Sponsor
ARBOR CAPITAL SPONSORS

Auditors             Attorneys
MAZARS               Fluxmans ATTORNEYS


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