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Fulfillment Of The Conditions Precedent In Respect Of The Unbundling Of Gameco And Finalisation Announcement
Niveus Investments Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1996/005744/06)
Share code: NIV
ISIN: ZAE000169553
(“Niveus” or the “Company”)
FULFILLMENT OF THE CONDITIONS PRECEDENT IN RESPECT OF THE
UNBUNDLING OF GAMECO AND FINALISATION ANNOUNCEMENT
1. Introduction
Shareholders of Niveus (“Shareholders”) are referred to the SENS
announcements released by Niveus on 27 June 2017 and 29 September 2017,
relating to the distribution by Niveus of its South African gaming interests (other
than its sports betting and lottery interests), currently housed in its wholly-owned
subsidiary Niveus Invest 19 Limited (“GameCo”) to its Shareholders
(“Unbundling”), prior to the implementation of certain transactions conditional
upon the implementation of the unbundling (“Tsogo Transaction”) (together the
“Proposed Transaction”).
Detailed information regarding the Unbundling and the Tsogo Transaction appears
in the circular issued to Shareholders on 16 August 2017 (“Circular”).
In terms of the agreement entered into between Tsogo Sun Holdings Limited
(“Tsogo”), Hosken Consolidated Investments Limited (“HCI”) and Niveus (the
“Parties”) in relation to the Proposed Transaction (“Agreement”), it is a condition
precedent that the Parties obtain a waiver from the Northern Cape Gambling Board
(“NCGB”) of the requirement that Tsogo’s indirect acquisition of Niveus Invest
Proprietary 1 Limited (“Niveus Invest”), which houses the Grand Oasis Casino,
Kuruman, be approved by the NCGB, by 30 October 2017 (“Long Stop Date”).
As at the time of the conclusion of the Agreement, the NCGB was dissolved and
up until 25 October 2017 new members of the NCGB had not been appointed. As
a result the Parties have not been able to obtain the relevant waiver from the NCGB
as required in terms of the Agreement.
2. Addendum to the transaction agreement
In order to prevent the Proposed Transaction from lapsing due to the failure to
obtain the waiver from the NCGB, the Parties have entered into a further
addendum to the Agreement (“Addendum”) and Niveus, Niveus Invest and
GameCo have entered into a sale agreement in terms of which:
• GameCo will sell to Niveus the entire issued share capital of Niveus Invest
(“Sale Share”) as well as GameCo’s claims on loan account against Niveus
Invest (“Sale Claims”) for a consideration of R94,963,327.76 in the aggregate
(“Purchase Consideration”). The Purchase Consideration will constitute an
interest free loan by GameCo to Niveus;
• GameCo will grant to Niveus a put option (“Put Option”) in terms of which
Niveus would be entitled to require GameCo to purchase the Sale Share and
the Sale Claims from Niveus for a purchase consideration equal to the
Purchase Consideration, which will be discharged by way of a set-off against
the amount owing by Niveus to GameCo in respect of the Purchase
Consideration;
• the exercise of the Put Option is conditional upon, inter alia, the requisite
approval or waiver, for the sale and purchase of the Sale Share and Sale claims
being obtained from the NCGB; and
• the Put Option must be exercised before 31 March 2018, failing which Niveus
will be obliged to pay the entire Purchase Consideration to GameCo.
The rationale for the Addendum is:
• to avoid the failure of the Proposed Transaction by reason solely of the non-
fulfilment of the condition precedent relating to the NCGB waiver, having regard
particularly to the reasoning for such non-fulfilment being the NCGB remained
dissolved up until 25 October 2017 when the new members of the NCGB were
appointed;
• to put the Shareholders in the same position as they would have been had the
condition precedent relating to the NCGB waiver been fulfilled, having regard
to the number of GameCo shares received by them pursuant to the Unbundling
(“GameCo Distribution Shares”) and consideration received upon
acceptance by a GameCo shareholder (including Niveus) of the offer that will
be made to GameCo shareholders by Tsogo post the Unbundling (“Tsogo
Minority Offer”);
• provide a period of time (which Tsogo, Niveus and HCI consider to be
reasonable) within which to obtain the requisite approvals to enable Niveus to
dispose of its share in and claims against Niveus Invest to GameCo; and
• to replace one asset held by GameCo, being the interest in Niveus Invest with
a different asset being a loan claim, which we equal in value to the value of the
interest in Niveus Invest held by GameCo.
The effect of the conclusion of the Addendum is that that there will be no change
in value of GameCo that is unbundled to Shareholders (effectively the value of the
interest in Niveus Invest is replaced with a loan claim equal to the same value).
Niveus is of the view that the Addendum is more appropriate than extending the
Long Stop Date for the following reasons:
• having regard to the existing terms of the Agreement, GameCo’s capital
expenditure has been held in abeyance until such time as the transaction is
implemented. Although Niveus has provided for a short period during which
capital expenditure need not be incurred, continuing to do so would be value-
destructive. Should the Long Stop Date be extended, significant changes will
need to be made to the Agreement to ensure that Niveus and Tsogo
shareholders are not prejudiced by such extension, and the business will likely
suffer as a result;
• the transaction has been structured in accordance with strict timelines. Should
the Long Stop Date have been extended, the GameCo shareholders who
accept the Tsogo Minority Offer will receive shares in Tsogo which may be
trading ex rights to the Tsogo interim dividend to be declared during the early
part of December 2017. The transaction has been structured to provide Niveus
shareholders who accept the Tsogo Minority Offer with an opportunity to
participate in the December Tsogo dividend, and if this is no longer the case,
then the addendum recording the extension to the Long Stop Date would have
needed to provide for the requisite changes to ensure that Niveus shareholders
will be the same position as they would have been had the extension not been
granted.
3. Shareholder support for the Addendum
Shareholders holding at least 75% of Niveus, including HCI and various minority
shareholders, have indicated that they are supportive of the Addendum and would
vote in favour of the Addendum, to the extent permissible and they elect to vote,
were such shareholders to be requested to vote on same.
4. Fulfilment of conditions precedent
Following the conclusion of the Addendum Shareholders are hereby advised that
all conditions precedent to the Proposed Transaction have been fulfilled and/or
waived and the Unbundling and the Tsogo transaction are now unconditional and
will be implemented in accordance with their terms.
5. Important Dates and Times
Shareholders are referred to the table below setting out important dates and times
in relation to the implementation of the Unbundling:
Salient dates and times 2017
Finalisation announcement in respect of the Unbundling Monday, 30 October
released on SENS on
Last day to trade Niveus shares in order to be recorded Tuesday, 7 November
in the securities register to participate in the Unbundling
on
Niveus shares trade ex right to GameCo Distribution Wednesday, 8 November
Shares
Unbundling Record Date Friday, 10 November
Unbundling completion date on which Shareholders will Monday, 13 November
have their accounts at their CSDP or broker updated to
reflect the GameCo Distribution Shares
Detailed timetable in relation to the Tsogo Minority Offer will be announced in
due course.
Notes:
1. All dates and times indicated above are South African Standard Time.
2. The above dates and times are subject to amendment at the discretion of Niveus. Any
such amendment will be released on SENS and published in the South African press.
3. Shareholders should note that as transactions in shares are settled in the electronic
settlement system used by Strate, settlement of trades takes place three business days
after such trade. Therefore, Shareholders who acquire Niveus shares after close of trade
on Tuesday, 7 November 2017 will not be eligible to participate in the Unbundling.
4. Share certificates may not be dematerialised or rematerialised between Wednesday,
8 November 2017 and Friday, 10 November 2017, both days inclusive.
6. Distributions to Foreign Shareholders
As noted in the Circular, the release, publication or distribution of the Circular in
jurisdictions other than South Africa may be restricted by law and therefore any
persons who are subject to the laws of any jurisdiction other than South Africa
should inform themselves about, and observe, any applicable requirements. Any
failure to comply with the applicable requirements may constitute a violation of the
securities laws of any such jurisdiction.
The distribution of GameCo Distribution Shares to Shareholders not resident in
South Africa (“Foreign Shareholders”) in terms of the Unbundling may be affected
by the laws of such Foreign Shareholders’ relevant jurisdiction. We reiterate that
those Foreign Shareholders should consult their professional advisers as to
whether they require any governmental or other consents or need to observe any
other formalities to enable them to take up their entitlements.
It is the responsibility of any Foreign Shareholder (including, without limitation,
nominees, agents and trustees for such persons) to satisfy themselves as to full
observance of the applicable laws of any relevant territory, including obtaining any
requisite governmental or other consents, observing any other requisite formalities
and paying any issue, transfer or other taxes due in such territories. Foreign
Shareholders are obliged to observe the applicable legal requirements of their
relevant jurisdictions.
Foreign Shareholders who are not entitled to receive GameCo Distribution Shares
pursuant to the Unbundling should dispose of their Niveus shares such that they
are no longer reflected as a holder of Niveus shares on the Unbundling Record
Date, or alternatively, to the extent lawful under the applicable laws of the relevant
territory, require the applicable CSDP and/or nominees, agents and trustees for
such persons receiving the GameCo Distribution Shares on behalf of the
shareholder to approach the transfer secretaries to dispose of the GameCo
Distribution Shares on behalf of and for the benefit of the relevant Foreign
Shareholder as soon as is reasonably practical after the implementation of the
Unbundling (which may include accepting the Tsogo Minority Offer).
Niveus reserves the right, but shall not be obliged, to treat as invalid any distribution
of GameCo Distribution Shares, in terms of the Unbundling, which appears to
Niveus or its agents to have been executed, effected or dispatched in a manner
which may involve a breach of the securities laws or regulations of any jurisdiction
or if Niveus believes or its agents believe that the same may violate applicable
legal or regulatory requirements.
7. Market value of GameCo Distribution Shares
Niveus will notify Shareholders of the market value of the GameCo Distribution
Shares by way of an announcement to be released on SENS by no later than the
Unbundling Completion Date.
8. Minority Offer Consideration
As explained in the Circular, read with the SENS announcement released by
Niveus on 29 September 2017, Tsogo has undertaken to submit an offer to all
GameCo shareholders (other than HCI) to acquire their shares in GameCo
pursuant to the completion of the Unbundling. The Cash Based Alternative payable
by Tsogo to Niveus and other Gameco Minority Shareholders electing the Cash
Based Alternative in respect of their GameCo Shares shall be increased by an
amount equal to 72% of the prime rate of interest calculated on such cash portion,
from 20 October 2017 until the first Friday after the Tsogo Minority Offer opens for
acceptance by shareholders, which is anticipated to be Friday, 17 November 2017.
The final offer price will be calculated and stipulated in the combined offer circular
to be issued by Tsogo and GameCo to Gameco Minority Shareholders shortly after
the Unbundling Completion Date.
Cape Town
30 October 2017
Sponsor
PSG Capital
Legal advisor
ENSafrica
Date: 30/10/2017 05:45:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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