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Firm Intention Offer by Alpine Asset Management Ltd to Acquire 100% of Issued Share Capital & Withdrawal of Cautiona
CULLINAN HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1902/001808/06)
Share code: CUL ISIN Code: ZAE 000013710
Preference share code: CULP ISIN Code: ZAE000001947
("Cullinan" or "the company")
ANNOUNCEMENT OF FIRM INTENTION OFFER BY ALPINE ASSET MANAGEMENT LIMITED ("THE
OFFEROR") TO ACQUIRE 100% OF THE ISSUED ORDINARY SHARE CAPITAL OF CULLINAN NOT
ALREADY HELD BY IT AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Shareholders are advised that on 22 November 2017 the board of directors
of the company ("the board") received an offer ("the offer") to acquire 100%
of the issued ordinary shares of the company not already held by it ("the offer
shares" and "the proposed transaction").
It is intended that the proposed transaction will be implemented by way of a
scheme of arrangement in terms of sections 114 and 115 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 Ms. Anita Mendiratta and Messrs. Mervyn Burton
and Rudewaan Arendse, 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 proposed transaction and the scheme
and make appropriate recommendations to the independent committee on
behalf of 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 Cullinan
containing the terms and conditions governing the proposed transaction and
the scheme ("the scheme circular") which will be distributed to shareholders
subject to the fulfilment of the conditions set out in paragraph 5 below.
2. OFFER CONSIDERATION
The consideration in terms of the offer is R1,30 per ordinary share ("the offer
consideration"), payable in cash. In addition, should the scheme be approved
and implemented in accordance with its terms and conditions, an additional
amount of R18 083 000 will be required to discharge the liability arising out
of the deemed vesting and exercise of the options referred to in paragraph 3
below.
The aggregate consideration payable on successful implementation of the
scheme will therefore be R38 157 543.
The offer consideration is at a premium of 18,18% to the closing price of
110 cents per Cullinan share traded on the Johannesburg Stock Exchange
("the JSE") on 21 September 2017, being the last business day immediately
prior to the date of the cautionary announcement released on 22 September
2017.
3. OPTIONS
In terms of the Share Scheme 2013, which was approved by shareholders on
24 February 2014, certain employees of the company were granted options to
acquire ordinary shares in the company, which options have not yet vested in
the employees.
It is intended that, should the scheme be implemented, these options
(which were granted at 90 cents per option) will be deemed to have vested
and been exercised, in pursuance of which such option holders shall become
entitled to receive the offer consideration in respect of the ordinary shares
which are the subject matter of such options.
4. INFORMATION REGARDING THE OFFEROR AND RATIONALE FOR
THE SCHEME
The offeror is a wholly-owned subsidiary of The Travel Corporation, which is
the ultimate holding company of Cullinan.
The recent purchase of large shareholdings in the company by Alpine has seen
its interest in the company rising to 98,08%, which effectively removes the
reason for maintaining a listing on the JSE. In addition, the limited tradability of
Cullinan shares acts as a disincentive for employees owning Cullinan shares or
options to acquire Cullinan shares.
In view of these facts, the offeror considers that maintaining the listing of the
company is of little value and it has therefore made the offer to the board.
In the circumstances, the proposed transaction is in the view of the board
worthy of consideration by shareholders as envisaged above.
5. CONDITIONS PRECEDENT TO THE POSTING OF THE SCHEME
CIRCULAR
The posting of the scheme circular is subject to the fulfilment of the following
conditions precedent:
5.1 the requisite approvals being received from the TRP and the JSE;
5.2 the expert will have prepared and submitted a fair and reasonable
opinion to the independent committee; and
5.3 the independent committee and the board will have resolved to
recommend acceptance of the offer to shareholders.
6. CONDITIONS PRECEDENT TO THE SCHEME
The scheme will be subject to the fulfilment of the following conditions
precedent by 31 March 2018, or such later date as the offeror and the
company may agree to in writing:
6.1 approval of the scheme by the requisite majority of Cullinan 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
6.2 Cullinan 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 15% of the shares within
30 business days following the scheme meeting, provided that, in the
event that any Cullinan 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 15% of the Cullinan
shares, this condition shall be deemed to have been fulfilled at the time
of the scheme meeting; and
6.3 the TRP having issued a compliance certificate as required in terms of
section 121(b) of the Act.
7. SHAREHOLDINGS, ACTING AS PRINCIPAL AND CONCERT PARTIES
The offeror confirms that it presently owns 788 296 429 ordinary shares in the
company (98,08% of the issued ordinary share capital), that it is the ultimate
proposed purchaser of all the offer shares and options and is not acting in
concert with, or as an agent or broker for, any other party.
8. FUNDING THE OFFER CONSIDERATION
The maximum scheme consideration will be R38 157 543. 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,
in compliance with Regulations 111(4) and 111(5) of the Act, Fluxmans Inc.
Attorneys has provided to the TRP the necessary irrevocable unconditional
confirmation that such cash is held in escrow.
9. IRREVOCABLE UNDERTAKINGS
The offeror and the company intend to approach larger shareholders in the
company in order to secure irrevocable undertakings to attend the general
meeting convened to consider the scheme and to support the scheme as
the general meeting has both quorum and voting requirements to be fulfilled.
Details of any such undertakings will be contained in the scheme circular.
10. TERMINATION OF THE LISTING OF CULLINAN
Should the scheme be implemented as contemplated in this announcement,
Cullinan will become a wholly-owned subsidiary of the offeror and the listing of
the company on the JSE will be terminated.
11. SCHEME CIRCULAR
The scheme circular relating to the proposed transaction, incorporating the
terms of the scheme, the notice of the scheme meeting, a form of surrender
and a form of proxy will be posted to Cullinan shareholders on or about
29 December 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.
12. 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.
13. WITHDRAWAL OF FURTHER CAUTIONARY ANNOUNCEMENT
The further cautionary announcement issued on 10 November 2017 is hereby
withdrawn.
By order of the board
Bradley Allison
Company secretary
Johannesburg
24 November 2017
Sponsor
ARBOR Capital
Auditors
Mazars
Attorneys
Fluxmans
Date: 24/11/2017 11:56:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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