Intention to repurchase 100% of the preference shares in the issued share capital of Imperial
Imperial Holdings Limited (“Imperial” or “the Company”)
Incorporated in the Republic of South Africa
Registration number: 1946/021048/06
Share code: IPL
Imperial preference shares
Share code: IPLP
Announcement relating to the intention to repurchase 100% of the preference shares in the
issued share capital of Imperial by way of a scheme of arrangement
1. Introduction and rationale
Shareholders are referred to the cautionary announcement, dated 21 June 2018, in relation to the
proposed unbundling of Imperial’s automotive business housed in its wholly-owned subsidiary,
Motus Holdings Limited (“Motus”) (“Unbundling”) and Imperial’s undertaking to engage with
Imperial preference shareholders (“Eligible Shareholders” or “Preference Shareholders”) in
Imperial is pleased to announce that, following consultation with selected Preference Shareholders
and Imperial ordinary shareholders, the board of directors of Imperial (“Board”) has resolved to
propose a repurchase of 100% of the outstanding non-redeemable, cumulative, non-participating
preference shares in the issued share capital of Imperial (“Preference Shares” or “Scheme
Shares”) by way of a scheme of arrangement (“the Scheme” or “the Repurchase”) in terms of
section 114(c) of the Companies Act, No. 71 of 2008 (“the Companies Act”).
Notwithstanding that Preference Shareholders are not entitled to participate in the Unbundling in
accordance with the Imperial Memorandum of Incorporation (“MOI”), the Board is of the opinion
that the Scheme will be an efficient means for:
- Imperial to simplify its capital structure (prior to the separation of Imperial’s combined
operations, into Imperial Logistics and Motus); and
- Preference Shareholders to dispose of the Preference Shares in an orderly and effective
Implementation of the Scheme is subject to the fulfilment (or waiver, where appropriate) of the
conditions precedent set out in paragraph 3 below, which conditions include, inter alia, that the
Scheme must be approved by the requisite majority of Eligible Shareholders at a meeting of Eligible
Shareholders and the associated Repurchase must be approved by the requisite majority of
Preference Shareholders, ordinary shareholders and the deferred ordinary shareholder
(collectively, “Shareholders”) entitled to vote on the relevant resolutions to be proposed at a
The Scheme constitutes an “affected transaction” as defined in section 117(1)(c)(iii) of the
Companies Act, and as such, the Scheme is regulated by the Companies Act and applicable
Takeover Regulations (contained in Chapter 5 of the Companies Regulations, 2011) (“Takeover
In connection with proposing the Scheme and convening the relevant shareholder meetings to
approve the relevant special resolutions required to approve implementation of the Scheme,
Imperial has prepared a shareholder circular in accordance with the relevant disclosure
requirements under the Listings Requirements of the JSE Limited (“Listings Requirements”), the
Companies Act and the applicable Takeover Regulations, which circular incorporates notices
convening the relevant shareholder meetings for purposes of proposing for approval at each of the
meetings the relevant resolutions required to implement the Scheme, and providing Shareholders
with the necessary statutorily-required information regarding the Scheme (“the Scheme
2. Scheme consideration and arrangement
The Scheme consideration shall compromise a ZAR cash consideration of (“Scheme
- a repurchase price offer of ZAR83.00 per Preference Share (“Offer Consideration”); plus
- a Preference Share dividend (calculated in terms of the MOI) amounting to ZAR2.53 per
Preference Share for the period from 26 June 2018 up to (and including) the expected Scheme
operative date (“Scheme Operative Date”) of 15 October 2018 (“the Pro Rata Preference
Dividend”)). Should the actual Scheme Operative Date not be 15 October 2018, the Pro Rata
Preference Dividend shall be calculated from 26 June 2018 up to (and including) the actual
Scheme Operative Date, which adjustment will be published through the Stock Exchange
News Service (“SENS”) of the JSE Limited (“JSE”).
The Offer Consideration represents a premium of 29% to the closing price of ZAR64.29 of the
Preference Shares as at 10 August 2018 (last trading date prior to this announcement) after
adjusting for the accrued preference dividend reflected in such share price, and a 18% premium
to the similarly adjusted volume weighted average price (“VWAP”) of ZAR70.31 of the Preference
Shares traded on the JSE during the 30 trading days up to (and including) 10 August 2018.
Furthermore, a Preference Share dividend of ZAR4.17 per Preference Share accrued for the
Preference Share dividend period from 26 December 2017 up to (and including) 25 June 2018 (the
“Accrued Preference Dividend”), shall be paid on 1 October 2018 to Preference Shareholders
recorded in the Company’s share register as at the Accrued Preference Dividend record date as
will be stipulated in the Scheme Circular.
3. Implementation of the Scheme and conditions precedent
The Scheme, if duly approved and implemented, will result in all Eligible Shareholders being
deemed to have disposed of, and transferred, all of their Scheme Shares to Imperial, and Imperial,
in turn, will be deemed to have repurchased all of the Scheme Shares, in exchange for the Scheme
As a consequence of the Scheme, in terms of paragraph 1.17(b) of the Listings Requirements,
Imperial shall apply to the JSE for approval of the suspension and the delisting of the Preference
Shares from the Main Board of the JSE, subject to the Scheme becoming operative.
Implementation of the Scheme is subject to, amongst other conditions precedent to be set forth in
the Scheme Circular:
- the Scheme being approved by way of the following Shareholder resolutions:
(i) a special resolution approved by the requisite majority of Eligible Shareholders in terms
of section 114(1) read with section 115(2)(a) of the Companies Act (“the Scheme
(ii) a special resolution approved by Shareholders (entitled to vote) (“the Repurchase
o in terms of paragraph 5.69(b) of the Listings Requirements and article 16.3 of the
MOI, to authorise the Scheme as a specific repurchase (“Special Resolution No.
o in terms of section 115(2)(a) of the Companies Act (as contemplated in sections
48(8) of the Companies Act), given that the Scheme would constitute the
repurchase of more than 5% of the issued Preference Shares, to authorise the
Scheme (“Special Resolution No. 2”).
- no written notice from any Shareholder/s being received by the Company in terms of section
164(3) of the Companies Act objecting to the relevant special resolutions. If any such objection
notices are received by the Company, then the chairperson of the relevant Meeting may close
the relevant Meeting without putting the relevant special resolutions to the vote;
- to the extent that the provisions of section 115(2)(c) of the Companies Act become applicable:
(i) the Scheme being approved by the relevant court unconditionally, or if subject to
conditions, the person on whom such conditions are imposed approves such conditions
and undertakes in writing to comply therewith; and
(ii) Imperial not treating the aforesaid special resolutions as a nullity in terms of section
115(5)(b) of the Companies Act; and
- the receipt of unconditional approvals, consents or waivers from all applicable regulatory
authorities as may be required in order to implement the Scheme or, to the extent that any
such approvals, consents or waivers are subject to conditions, such conditions being
acceptable to Imperial.
A separate class general meeting of the Eligible Shareholders entitled to vote on the Scheme
Resolution (“Eligible Shareholder General Meeting”) and a general meeting of Shareholders
entitled to vote on the Repurchase Resolutions (“Combined General Meeting”) will be held on
14 September 2018 (collectively, “the Meetings”) to consider the foregoing resolutions and notices
convening these Meetings will be set out more fully in the Scheme Circular.
Shareholders are advised to refer to the Scheme Circular for the full terms and conditions of the
4. Pro forma financial effects
The table below sets out the unaudited and unreviewed pro forma financial effects of the
Repurchase pursuant to the Scheme and has been prepared for illustrative purposes only, in order
to enable Shareholders to assess the impact the Scheme would have if it was implemented on the
dates indicated in the notes below. Although it does not form the subject of this announcement
(and the Scheme Circular), the table below also sets out the pro forma financial effects of the
Bonds redemption that has recently occurred, as described in notes 8, 9 and 10 below.
Due to their pro forma nature, the pro forma financial effects may not fairly present the financial
position or the effect on earnings, changes in equity or cash flows of Imperial following
implementation of the Scheme and the redemption of the Bonds.
The pro forma financial effects are presented in a manner that is consistent with the accounting
policies of Imperial for the six months ended 31 December 2017, being International Financial
Reporting Standards. For a full understanding of Imperial’s accounting policies, refer to Imperial’s
audited annual financial statements for the year ended 30 June 2017, which can be found on
Imperial’s website at http://www.imperial.co.za/pdf/investor-relations/annual-financial-
The preparation of the pro forma financial effects is the responsibility of the Board. Consistent with
the foregoing, the pro forma financial effects set out in the table below are based on available
information and certain assumptions and estimates, which the Board believe, are reasonable. The
pro forma figures below have been given no greater prominence than unadjusted financial figures,
are presented in a manner consistent with both the format and accounting policies adopted in the
historical financial information of Imperial and adjustments have been quantified on the same basis
as would normally be calculated in preparing financial statements.
Scheme at Unaudited Adjustments Adjustments Pro Forma %
ZAR85.53 per Interim for the for the Interim Change
Preference Share Results1 Scheme2 3 4 5 redemption Results
of the (After
Bonds8 9 10 Scheme)
Net Asset Value 10,179 31 -5 10,205 0.3%
(“NAV”) 6 9 per
Tangible NAV 5,546 31 -5 5,572 0.5%
(“NTAV”)6 9 per
Earnings per share 671 35 -3 703 4.8%
(“EPS”)7 10 (cents)
Diluted EPS7 10
652 34 -3 683 4.8%
Basic Headline 717 35 -3 749 4.5%
EPS 7 10 (cents)
Diluted basic 698 34 -3 729 4.4%
Headline EPS7 10
Weighted average 194.7 194.7 0%
number of Ordinary
Weighted diluted 200.2 200.2 0%
number of Ordinary
Notes and assumptions:
1. The financial information, in the unaudited interim results (Before Scheme) column, has been based on
the unaudited interim results for the six months ended 31 December 2017 without adjustment as
published on SENS on 20 February 2018.
2. If the Scheme becomes operative, Preference Shares are bought back at ZAR85.53 per Preference
3. Scheme costs of R2 million have been expensed for the Scheme. The transaction costs will have no
continuing effect on the Company.
4. The Scheme Shares are treated as a financial liability for accounting purposes, due to the cumulative
nature of dividends.
5. The settlement of the Scheme Consideration will be through existing debt facilities.
6. The NAV and NTAV includes the once-off profit on redemption (R64 million) and transaction costs (R2
million), as though the Repurchase transaction took place effective 31 December 2017.
7. The Headline EPS and EPS includes the once-off profit on redemption (R64 million) and the reduced
cost of the replacement funding, as though the Repurchase transaction took place effective 1 July 2017.
8. Reference to ”Bonds” means the domestic medium term notes issued by Imperial Group Proprietary
Limited and guaranteed by the Company. All of the Bonds that were in issue, amounting to R3.5 billion,
were redeemed on 6 August 2018.
9. The NAV and NTAV includes the after tax once-off loss on redemption of the Bonds (R13 million) and
transaction costs (R1 million) as though the Bonds transaction took place effective 31 December 2017.
10. The Headline EPS and EPS includes the once-off loss on redemption (R13 million), transaction costs
(R1 million) and the reduced cost of the replacement funding (R7 million) as though the Bonds
transaction took place effective 1 July 2017.
5. Important dates and times
Posting record date for the purposes of receiving the Scheme Circular Friday, 10 August
Scheme Circular posted to Shareholders Thursday, 16 August
Last day to trade in Preference Shares to be recorded in the register on Tuesday, 4 September
the Meetings record date
Record date for purposes of determining the Shareholders entitled to Friday, 7 September
attend, speak and vote at the Meetings
Last day and time to give notice to participate in the Meetings Monday, 10 September
electronically by 14:00
For administrative purposes, form of proxy (green) for Eligible Shareholder Wednesday, 12 September
General Meeting and/or form of proxy (white) for Combined General
Meeting should be (but not required to be) received by 10h00 CAT (note
Last day for a Shareholder to deliver a written notice to Imperial objecting Friday, 14 September
to the Scheme Resolution and/or the Special Resolution No. 2 in the
Notice of Combined General Meeting in accordance with section 164(3) of
the Companies Act before the relevant resolution is to be voted on at either
the Eligible Shareholder General Meeting or the Combined General
Eligible Shareholder General Meeting held at 10h00 CAT Friday, 14 September
Combined General Meeting at 10h30 CAT Friday, 14 September
Results of Eligible Shareholder General Meeting and Combined General Friday, 14 September
Meeting announced on SENS
Results of Eligible Shareholder General Meeting and Combined General Monday, 17 September
Meeting published in South African press
If the Scheme and Repurchase is duly approved by Shareholders at
Last date for Shareholders who voted against the Scheme Resolution or Friday, 21 September
Special Resolution No. 2 in the Notice of Combined General Meeting to
require Imperial to seek Court approval for the Scheme in terms of section
115(3)(a) of the Companies Act, if the requisite special resolutions in terms
of section 115 of the Companies Act were opposed by at least 15% of the
voting rights that were exercised
Last day to trade Preference Shares cum-Accrued Preference Dividend Tuesday, 25 September
Preference Shares commence trading ex-Accrued Preference Dividend Wednesday, 26 September
Accrued Preference Dividend record date Friday, 28 September
Payment date for the Accrued Preference Dividend Monday, 1 October
Last date for Shareholders who voted against the Scheme Resolution or Monday, 1 October
Special Resolution No. 2 in the Notice of Combined General Meeting to be
granted leave by a Court to apply for a review of the Scheme in terms of
section 115(3)(b) of the Companies Act
Last date for Imperial to give notice of adoption of the special resolutions Monday, 1 October
(in terms of section 115 of the Companies Act) approving the Scheme and
the Repurchase in terms of section 164(4) of the Companies Act to
Shareholders who delivered written notices to the Company objecting to
the special resolutions in accordance with section 164 of the Companies
If no Shareholders exercise their rights in terms of section 115(3) of
the Companies Act and all conditions precedent to the Scheme are
Takeover Regulation Panel compliance certificate delivered in terms of Tuesday, 2 October
section 121(b) of the Companies Act
Scheme finalisation date announcement published on SENS Tuesday, 2 October
Last day to trade Preference Shares on the JSE to be recorded in the Tuesday, 9 October
register on the Scheme record date to receive the Scheme Consideration
Suspension of listing of Preference Shares from the Main Board of the JSE Wednesday, 10 October
at commencement of trading
Last day to deliver Form of Surrender (pink) and Documents of Title (in Friday, 12 October
order to receive Scheme Consideration on the Scheme Operative Date) to
be recieved by the Transfer Secretaries, by 12:00
Friday, 12 October
Scheme record date, being the date and time on which Eligible
Shareholders must be recorded in the register to receive the Scheme
Consideration, by 17:00
Monday, 15 October
Scheme Operative Date
Monday, 15 October
Dematerialised Scheme participants to have their accounts (held at their
CSDP or broker) debited with the Scheme Shares and credited with the
Monday, 15 October
Payment of the Scheme Consideration electronically or posted to
certificated Scheme participants (if the Form of Surrender (pink) and
Documents of Title received by the transfer secretaries on or before 12:00
CAT on the Scheme record date)
Tuesday, 16 October
Termination of listing of the Preference Shares on the Main Board of the
JSE at the commencement of trade
1. All times shown in this announcement are South African times, unless otherwise stated.
2. The above dates and times are subject to amendment. Any material amendment will be announced on SENS
and published in the South African press.
3. Proxies may also be handed to the chairman at the commencement of the Meetings.
6. Independent Expert’s report, Independent Board and recommendations
The Board has appointed PricewaterhouseCoopers Corporate Finance Proprietary Limited as the
independent expert (“Independent Expert”) for purposes of preparing an opinion in respect of the
Scheme and the Offer Consideration in accordance with sections 114(2) and 114(3) of the
Companies Act and regulation 90 of the Takeover Regulations (“Independent Expert Report”).
Having considered the terms and conditions of the Scheme and based upon and subject to the
terms and conditions set out in the Independent Expert Report, the Independent Expert is of the
opinion that the Scheme and Offer Consideration are fair and reasonable to Shareholders.
Imperial has constituted an independent board (“Independent Board”), comprised of S.P. Kana,
P. Cooper, G.W. Dempster, P. Langeni, M.V. Moosa, T. Skweyiya and R.J.A. Sparks, to consider
the Scheme and Offer Consideration.
The Independent Board, after due consideration of the Independent Expert Report, are of the
opinion that the terms and conditions of the Scheme are fair and reasonable to Shareholders and
recommend that Shareholders vote in favour of the relevant resolutions required to implement the
Scheme. The full Independent Expert Report and the basis for its conclusions will be set out in the
7. Cash guarantee
Imperial has provided the Takeover Regulation Panel with an irrevocable, unconditional bank
guarantee (in conformity with Regulations 111(4) and 111(5) of the Takeover Regulations) issued
by Nedbank Limited in favour of Imperial, to satisfy, in full, the Scheme Consideration.
8. Notice of Meetings and posting of Scheme Circular
The Scheme Circular will be posted to Shareholders, and will contain the relevant notices to
convene the Meetings to be held at 10h00 and 10h30, respectively, on Friday, 14 September 2018
in the boardroom of Imperial, Imperial Place, Jeppe Quondam, 79 Boeing Road East, Bedfordview,
Gauteng, for the purpose of considering and, if deemed fit, passing with or without modification,
the relevant special resolutions required to implement the Scheme, as described in more detail in
paragraph 3 above and in the Scheme Circular.
9. Responsibility statement
The Board and Independent Board accepts responsibility for the information contained in this
announcement to the extent that it relates to Imperial, and certify, to the best of their knowledge
and belief, that the information contained in this announcement is true and nothing has been
omitted which is likely to affect the importance of the information.
10. Cautionary announcement
Further to the renewal of cautionary announcement dated 3 August 2018, Preference Shareholders
are advised that they no longer need to exercise caution when dealing in the Preference Shares as
the details of the Scheme (and the associated Repurchase) have been set out in this
Imperial ordinary shareholders are advised to continue to exercise caution when trading in their
securities until a further announcement in respect of the Unbundling and separate listing of Motus
on the JSE is implemented.
13 August 2018
Financial advisors and transaction sponsor
The Standard Bank of South Africa Limited
PricewaterhouseCoopers Corporate Finance (Pty) Limited
Independent Reporting Accountants
Deloitte & Touche
Merrill Lynch SA (Pty) Limited
Nothing in this announcement constitutes (or forms part of) any offer for the sale of, or solicitation of any offer to
purchase or subscribe for, any securities of Imperial in any jurisdiction.
The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law and
therefore persons in any such jurisdictions into which this announcement is released, published or distributed
should inform themselves about and observe such restrictions. Failure to comply with the applicable restrictions
may constitute a violation of the securities laws of any such jurisdiction.
This announcement contains statements about Imperial that are or may be forward-looking statements. All
statements, other than statements of historical fact, are, or may be deemed to be, forward-looking statements,
including, without limitation, those concerning: strategy; the economic outlook for the relevant business; cash costs
and other operating results; growth prospects and outlook for operations, individually or in the aggregate; liquidity
and capital resources and expenditure and the outcome and consequences of any pending litigation proceedings.
These forward-looking statements are not based on historical facts, but rather reflect current expectations
concerning future results and events and generally may be identified by the use of forward-looking words or phrases
such as “believe”, “aim”, “expect”, “anticipate”, “intend”, “foresee”, “forecast”, “likely”, “should”, “planned”, “may”,
“estimated”, “potential” or similar words and phrases.
Examples of forward-looking statements include statements regarding a future financial position or future profits,
cash flows, corporate strategy, estimates of capital expenditures, acquisition strategy, or future capital expenditure
levels, and other economic factors, such as, inter alia, interest rates.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and
depend on circumstances that may or may not occur in the future. Imperial cautions that forward-looking statements
are not guarantees of future performance. Actual results, financial and operating conditions, liquidity and the
developments within the industry in which Imperial operates may differ materially from those made in, or suggested
by, the forward-looking statements contained in this announcement.
All these forward-looking statements are based on estimates and assumptions, all of which, although Imperial may
believe them to be reasonable, are inherently uncertain. Such estimates, assumptions or statements may not
eventuate. Many factors (including factors not yet known to Imperial, or not currently considered material) could
cause the actual results, performance or achievements to be materially different from any future results,
performance or achievements expressed or implied in those estimates, statements or assumptions.
Shareholders should keep in mind that any forward-looking statement made in this announcement or elsewhere is
applicable only at the date on which such forward-looking statement is made. New factors that could cause the
business of Imperial, or other matters to which such forward-looking statements relate, not to develop as expected
may emerge from time to time and it is not possible to predict all of them. Further, the extent to which any factor or
combination of factors may cause actual results to differ materially from those contained in any forward-looking
statement are not known. Imperial has no duty to, and does not intend to, update or revise the forward-looking
statements contained in this announcement after the date of this announcement, except as may be required by
law. Any forward-looking statements have not been reviewed nor reported on by the external auditors.
Date: 13/08/2018 07:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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