NICTUS LIMITED - Specific repurchase of 12 826 440 ordinary shares, posting of circular and notice of special general meeting

Release Date: 28/08/2018 16:00
Code(s): NCS
 
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Specific repurchase of 12 826 440 ordinary shares, posting of circular and notice of special general meeting

Nictus Limited 
Incorporated in the Republic of South Africa 
Registration number: 1981/011858/06 
JSE share code: NCS   •   ISIN: NA0009123481 
(“Nictus” or “the Company” or “the Group”)  
 
SPECIFIC REPURCHASE OF 12 826 440 ORDINARY SHARES, POSTING OF CIRCULAR AND 
NOTICE OF SPECIAL GENERAL MEETING 
 
1.     INTRODUCTION 
 
Nictus shareholders (“Nictus Shareholders”) are advised that Nictus and Nictus Holdings 
Limited (“NHL”), a public company listed on the Namibian Stock Exchange, have entered 
into an agreement, dated 27 August 2018 (“Repurchase Agreement”), in terms of which 
Nictus will repurchase 12 826 440 ordinary shares (the “Repurchase Shares”) in the share 
capital of Nictus from NHL (“Repurchase”).  
 
The Repurchase will be undertaken in accordance with section 48(8)(b) and section 114, 
read with sections 115 and 164 of the Companies Act, No. 71 of 2008, as amended 
(“Companies Act”) and its regulations (“Regulations”) and paragraph 5.69 of the Listings 
Requirements of the JSE Limited (“Listings Requirements”). 
 
A circular setting out the details of the Repurchase (“Circular”) and incorporating a notice 
convening a special general meeting of Nictus Shareholders to approve the special and 
ordinary resolutions required to implement the Repurchase (“Special General Meeting”) will 
be distributed to Nictus Shareholders on or about Tuesday, 25 September 2018. 
 
2.     DETAILS OF THE REPURCHASE
 
2.1    Terms of the Repurchase
 
The Repurchase will be undertaken at a price of 58,25 cents per Repurchase Share 
(“Repurchase Price”) on the implementation date, on or about Monday, 12 November 2018 
(“Implementation Date”). The Repurchase Price represents a discount of 4,32% to the 
weighted average traded price of the Nictus ordinary shares (“Nictus Shares”) measured 
over the 30 business days prior to Monday, 27 August 2018, the date on which the 
Repurchase Price was agreed in writing between Nictus and NHL in terms of the Repurchase 
Agreement, of 60,88 cents per Nictus Share. The repurchase consideration will amount to 
R7 471 401,30 (“Repurchase Consideration”). 
 
The payment of the Repurchase Consideration by Nictus will be from contributed tax 
capital. Nictus will call for a cash amount equal to the Repurchase Consideration, and the 
expenses relating to the Repurchase, from a loan granted to Nictus Holdings. 
The Repurchase Shares will be delisted and cancelled on the Implementation Date. 
 
2.2    Rationale 

During 2012, an unbundling transaction took place whereby NHL was unbundled from 
Nictus. As a result of the unbundling, NHL acquired a 19,35% shareholding in Nictus. Since 
2015, Nictus has been profitable on an annual basis and maintained a consistent dividend 
distribution to Nictus Shareholders. Nictus formulated a long?term strategy to become a 
sought?after wealth creator for all stakeholders. The Repurchase is one of the steps Nictus is 
taking as part of the execution of this strategy with the direct result being the creation of 
additional Nictus Shareholder value, as illustrated in the pro forma financial information 
presented in paragraph 3 below. 
 
2.3     Conditions precedent 

The Repurchase is subject to the following conditions precedent: 
•      JSE and Takeover Regulation Panel (“TRP”) approval of the necessary Circular to Nictus 
       Shareholders in compliance with the Listings Requirements and the Companies Act;  
•      the passing of a special resolution, in accordance with the requirements of sections 
       48(8)(b), 114 and 115 of the Companies Act and paragraph 5.69(c) of the Listings 
       Requirements at the Special General Meeting, by the requisite majority of holders of 
       Nictus Shares other than those held by the Tromp family, as detailed in paragraph 2.4 
       below (“Independent Nictus Shareholders”);  
•      in the event where the provisions of section 115(2)(c) of the Companies Act become 
       applicable, the High Court of South Africa (“Court”) approving the Repurchase, 
       providing the Company has not treated the Repurchase resolution as a nullity in terms 
       of section 115(5)(b) of the Companies Act; 
•      the Board not having resolved at the time of the Special General Meeting to revoke 
       the Repurchase resolution in circumstances where more than 5% of the Independent 
       Nictus Shareholders have, in terms of section 164(3) of the Companies Act, objected 
       to the Repurchase; 
•      the Board not having resolved at the time of the Special General Meeting to revoke 
       the Repurchase resolution in circumstances where more than 5% of the Independent 
       Nictus Shareholders have exercised their appraisal rights in terms of, and in 
       compliance with, section 164(5) of the Companies Act; 
•      the Board not having resolved to treat the Repurchase resolution as a nullity in terms 
       of section 115(5)(b), in the circumstances where the Repurchase resolution was 
       opposed by at least 15% of the voting rights that were exercised at the Special General 
       Meeting and, within 5 Business Days of the Special General Meeting, any Independent 
       Nictus Shareholder who voted against the Repurchase resolution requiring the 
       Company to seek Court approval; and 
•      the issuance of a compliance certificate by the TRP in terms of section 119(4)(b) of the 
       Companies Act read together with regulation 102(13) in relation to the Repurchase. 
 
2.4     Interests in Nictus and NHL shares
 
At the date of this announcement, Nictus had no interest in any listed securities of NHL and 
NHL held the Repurchase Shares (equivalent to 19,35% of the total issued Nictus Shares) in 
Nictus. 
 
At the date of this announcement, Nicolaas Cornelius Tromp, Gerard Rochelle de Villiers 
Tromp and Philippus Johannes de Witt Tromp and their associates, as defined in the JSE 
Listings Requirements (the “Tromp Family”), controlled 80,96% of the Nictus Shares and 
57,05% of NHL’s shares. 
 
Although not an “acquiring party” as defined in the Companies Act, or persons related to an 
acquiring party, or persons acting in concert with either of them, the Nictus Shares held by 
the Tromp Family, including the Tromp Family’s Nictus Shares held through NHL, will not be 
included in calculating the percentage of voting rights 
•     required to be present, or actually present, in determining whether the applicable 
       quorum requirements for the Special General Meeting are satisfied; or 
•     required to be voted in support of a resolution, or actually voted in support of the 
       resolution. 
 
2.5     Nictus Shareholder approval 

As the Repurchase is being undertaken in terms of section 114 of the Companies Act, 
Independent Nictus Shareholders, are required to pass a special resolution to authorise 
Nictus to undertake the Repurchase. In addition, the Independent Nictus Shareholders are 
required to approve the Repurchase in terms of paragraph 5.69(b) of the JSE Listings 
Requirements. 
 
3.      PRO FORMA FINANCIAL INFORMATION 

The pro forma financial effects of the Repurchase are provided for illustrative purposes only 
and, because of their nature, may not fairly present the Group’s financial position or results 
of its operations. 
 
The pro forma financial information has been prepared to illustrate the impact  
of the Repurchase on the assumption that the Repurchase took place on 
1 April 2017 for statement of profit or loss and other comprehensive income  
purposes and 31 March 2018 for statement of financial position purposes. 
The pro forma financial information has been prepared using the accounting policies of 
Nictus which comply with IFRS and are consistent with those applied in Nictus’ annual 
financial statements for the year ended 31 March 2018. 
 
The pro forma financial information is the responsibility of the Nictus board of directors 
(“Nictus Board”). 
 
                                                            Before the    After the      % 
                                                          Repurchase  Repurchase change
  Earnings per Nictus Share (“EPS”)                              8,17         8,98      10
  Diluted earnings per Nictus Share (“DEPS”)                     8,17         8,98      10
  Headline earnings per Nictus Share (“HEPS”)                    8,17         8,98      10
  Diluted headline earnings per Nictus Share (“DHEPS”)           8,17         8,98      10
  Net asset value per Nictus Share (“NAV”)                       1,55         1,77      14
  Net tangible asset per Nictus Share (“NTAV”)                   1,55         1,77      14
  Number of Nictus Shares in issue                         66 269 940   53 443 500     (19)
Weighted average number of Nictus Shares in issue          66 269 940   53 443 500     (19)
 
Notes: 
1.     The “Before the Repurchase” financial information has been extracted, without 
       adjustment, from the published financial information of Nictus for the year ended and 
       as at 31 March 2018. 
2.     The “After the Repurchase” EPS, DEPS, HEPS and DHEPS include an adjustment for the 
       reduction in interest earned by Nictus due to Nictus calling for a cash amount equal to 
       the Repurchase Consideration and the amount required to settle the expenses 
       relating to the Repurchase, from the loan granted to NHL. The interest adjustment has 
       been calculated using an interest rate of 10.32%, being the average South African 
       prime interest rate for the period 1 April 2017 to 31 March 2018. Taxation has been 
       adjusted for the interest adjustment. These adjustments will have a continuous effect 
       on the Nictus statement of profit or loss and other comprehensive income. 
3.     The “After the Repurchase” NAV and NTAV per Nictus Share include adjustments to 
       cash and cash equivalents and loans and receivables for the Repurchase Consideration 
       amounting to R7,471 million and the transaction costs amounting to R795 000. 
4.     Stated capital has been decreased by the amount originally paid by Nictus Holdings 
       for the Repurchase Shares and the expenses relating to the Repurchase which have 
       been capitalised in terms of IAS 32: Financial Instruments Presentation, amounting to 
       R22,741 million, and retained earnings has been increased for the gain on the 
       Repurchase amounting to R14,475 million. 
5.     The weighted average number of Nictus Shares in issue and the number of Nictus 
       Shares in issue have been adjusted for the repurchase of the 12 826 440 Nictus Shares 
       in terms of the Repurchase. 
 
4.      OPINIONS AND RECOMMENDATIONS 
 
As required in terms of the Companies Act and the Regulations, the Nictus Board has 
identified those members of the Nictus Board, namely Prof. Barend Johannes Willemse, 
Gerard Swart and John Day Mandy, who are independent (“Independent Board”) for 
purposes of evaluating the Repurchase.  
 
The independent Board has appointed BDO Corporate Finance Proprietary Limited 
(“Independent Expert”) in terms of section 114 of the Companies Act, regulation 90 of the 
Regulations and section 5.69 of the JSE Listings Requirements, to provide a fair and 
reasonable opinion in regard to the Repurchase (“Opinion”) and to make appropriate 
recommendations to the Independent Board for the benefit of the Independent Nictus 
Shareholders. In this regard, the Independent Expert has advised the Independent Board 
that it has considered the terms and conditions of the Repurchase and is of the opinion that 
these terms and conditions are fair and reasonable to Independent Nictus Shareholders. The 
text of the Opinion and the views of the Independent Board will be detailed in the Circular. 
 
5.      RECOMMENDATION OF THE INDEPENDENT BOARD 
 
The Independent Board, taking into account the Opinion of the Independent Expert, has 
considered the terms and conditions of the Repurchase and is unanimously of the opinion 
that the terms and conditions of the Repurchase are fair and reasonable to Independent 
Nictus Shareholders. In particular, the Independent Board has considered the fair value 
range determined by the Independent Expert and is in agreement with the fair value range 
so determined and has placed reliance on the valuation performed by the Independent 
Expert. 
 
Accordingly, the Independent Board recommends that Independent Nictus Shareholders 
vote in favour of the resolutions to be proposed at the Special General Meeting. Those 
Independent Board members who hold Nictus Shares intend to vote in favour of the 
resolutions to be proposed at the Special General Meeting, to be held in the boardroom, 
Nictus Building, Corner of Dover and Pretoria Street, Randburg on Wednesday 24 October 
2018 at 11:00. 
 
6.     IRREVOCABLE UNDERTAKINGS 
 
Nictus has secured irrevocable undertakings from the parties listed below, representing 
approximately 30,37% of voting Nictus Independent Shareholders, to vote in favour of the 
resolutions at the Special General Meeting. 
 
                                                     Number of 
                                                  Nictus Shares 
                                                    at the date  
                                                        of this 
  Nictus Independent Shareholder                   announcement           %
  Franke Trust                                        1 304 190       10,34
 Oreon Place Investments Proprietary Limited          1 000 000        7,93
 Haida Investments cc                                   941 144        7,46
 Wilbur Okkie Izaaks                                    413 586        3,28
 Hartman Eckhart Prozesky                               172 000        1,36
  Total                                               3 830 920       30,37 
 
7.      FUNDING OF THE REPURCHASE CONSIDERATION AND CASH CONFIRMATION 
 
Nictus will fund the Repurchase Consideration out of cash resources and has provided a 
written confirmation from Corporate Guarantee (South Africa) Limited to the TRP that the 
Company has the cash resources necessary to meet their obligations under the Repurchase. 
 
8.      INDEPENDENT BOARD’S RESPONSIBILITY STATEMENT 
 
The Independent Board accepts responsibility for the information contained in this firm 
intention announcement and confirms that, to the best of its knowledge and belief, the 
information is true and does not omit anything likely to affect the importance of the 
information. 
 
9.      SALIENT DATES 

The salient dates of the Repurchase are as follows: 
                                                                                      2018
                                                                                 Friday, 17 
Record date to be entitled to receive notice of the Special General Meeting      September
                                                                                 Tuesday, 25 
Circular posted to Nictus Shareholders on                                        September 
Last day to trade Nictus Shares in order to be eligible to participate and       Tuesday, 16 
vote at the Special General Meeting                                              October
Record date to be entitled to participate in and vote at the Special General     Friday, 19 
Meeting                                                                          October
Forms of proxy for the Special General Meeting must be received by 11:00         Monday, 22 
on                                                                               October
Last date and time for Independent Nictus Shareholders to give notice to 
Nictus objecting to the special resolution approving the Repurchase if the 
Repurchase resolution was proposed or if proposed and not retracted or           Wednesday, 
treated as a nullity by 11:00 on                                                 24 October
                                                                                 Wednesday, 
Special General Meeting to be held at 11:00 on                                   24 October 
                                                                                 Wednesday, 
Results of the Special General Meeting released on SENS on                       24 October
If the Repurchase is approved by Independent Nictus Shareholders at the 
Special General Meeting 
Last date for Independent Nictus Shareholders who voted against the 
Repurchase to require the Company to seek Court approval for the 
Repurchase in terms of section 115(3) of the Companies Act, if at least 15% 
of the total votes of Nictus Shares at the Special General Meeting were          Wednesday, 
exercised against the Repurchase                                                 31 October
Last day for the Company to send notice of adoption of the Repurchase 
resolution to Independent Nictus Shareholders who validly exercise their         Wednesday, 7 
appraisal rights in accordance with section 164(4) of the Companies Act          November
Last day for Independent Nictus Shareholders who voted against the 
Repurchase to apply to Court for leave to apply to the Court for a review of     Wednesday, 7 
the Repurchase in terms of section 115(3)(b) of the Companies Act                November
                                                                                 Thursday, 8 
Expected unconditional date of the Repurchase                                    November
                                                                                 Monday, 12 
Expected Implementation Date of the Repurchase                                   November
 
Notes 
   1.     These dates and times are subject to amendment. Any such amendment will be 
          released on SENS. 
           
10.     WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT 
 
Nictus Shareholders are advised that the cautionary announcement has been withdrawn. 
 
Randburg 
28 August 2018 
 
  Sponsor on the JSE and Legal Advisor 
  KPMG Services Proprietary Limited 
   
  Independent Expert 
  BDO Corporate Finance Proprietary Limited 
   
  Reporting accountant to Nictus 
  KPMG Inc. 
 

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