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Repurchase offer to Sasfin preference shareholders and withdrawal of cautionary
SASFIN HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number 1987/002097/06)
JSE share code: SFN ISIN: ZAE000006565
Preference share code: SFNP ISIN: ZAE000060273
(“Sasfin” or “the Company”)
FIRM INTENTION ANNOUNCEMENT BY SASFIN IN RESPECT OF A REPURCHASE OFFER TO SASFIN
PREFERENCE SHAREHOLDERS TO ACQUIRE THEIR PREFERENCE SHARES, TO BE IMPLEMENTED
BY WAY OF A SCHEME OF ARRANGEMENT OR A STANDBY GENERAL OFFER, AND WITHDRAWAL
OF CAUTIONARY ANNOUNCEMENTS
1. INTRODUCTION
1.1. Sasfin shareholders (“Shareholders”) are referred to the cautionary announcements
published on the Stock Exchange News Service of the JSE Limited (“SENS”) on 30 September
2020 (“First Cautionary Announcement”), 13 November 2020, 29 December 2020 and 10
February 2021 (collectively the “Cautionary Announcements”).
1.2. The board of directors of Sasfin (“Board”) is pleased to announce that it is has resolved to
propose a repurchase (“Proposed Repurchase”) of all or some of the non-redeemable, non-
cumulative, non-participating, variable rate preference shares in the issued share capital of
Sasfin (“Preference Shares”) by way of two separate but concurrent offers comprising:
1.2.1. an offer to all of the holders of Preference Shares (“Eligible Shareholders”) to
acquire all of their Preference Shares (“Scheme Shares”) for a cash
consideration of R71.00 per Scheme Share (“Scheme Consideration”), in
accordance with the provisions of sections 114(1)(c) and (e) and section
115(2)(a) of the Companies Act, No. 71 of 2008, as amended
(“Companies Act”), by way of a scheme of arrangement (“Scheme”), which if
successfully implemented will result in all Preference Shares being repurchased,
cancelled and removed from the issued Preference Shares of Sasfin and
subsequently delisted from the securities exchange operated by the JSE Limited
(“JSE”); and
1.2.2. separate to the Scheme, but concurrently with it, a general offer
(“Standby Offer”) by Sasfin to Eligible Shareholders, to acquire all (or a portion)
of the Preference Shares (“Standby Offer Shares”) for a cash consideration of
R68.00 per Standby Offer Share (“Standby Offer Consideration”), in
accordance with the provisions of sections 48(8)(b), 114 and 115 of the
Companies Act, which Standby Offer may be accepted or rejected by Eligible
Shareholders (in whole or in part) and which will be implemented only if the
Scheme fails and, if successfully implemented, will result in only those Preference
Shares which have been voluntarily tendered being repurchased, cancelled and
removed from the issued Preference Shares of Sasfin, and the subsequent
delisting of those Preference Shares from the securities exchange operated by
the JSE.
1.3. The implementation of the Proposed Repurchase, whether as a Scheme or the Standby Offer
(if the Scheme does not become unconditional and operative), will also require approval in
terms of paragraph 5.69 of the Listings Requirements of the JSE (“Listings Requirements”).
1.4. The Scheme and the Standby Offer are proposed concurrently on the basis that the
implementation of the Standby Offer will be conditional upon, amongst others, the Scheme
not becoming unconditional and operative. In the event that the Scheme becomes
unconditional and operative, the Standby Offer will lapse. Alternatively, if the Scheme does
not become unconditional and operative, the Standby Offer will become unconditional and be
capable of being implemented.
1.5. The Board further confirms that, as a bank controlling company, Sasfin has obtained the
consent of the South African Reserve Bank’s Prudential Authority in terms of the Regulations
relating to Banks, 2012 to proceed with the Proposed Repurchase.
1.6. The contents of this announcement (“Firm Intention Announcement”) constitute a firm
intention by Sasfin to make an offer to Eligible Shareholders as contemplated in Chapter 5 of
the Companies Act and Chapter 5 of the Companies Regulations, 2011, promulgated under
the Companies Act (which includes the “Takeover Regulations” issued pursuant to sections
120 and 223 of the Companies Act) (“Companies Regulations”).
1.7. Sasfin has constituted an independent board of directors of the Company
(“Independent Board”) for purposes of the Proposed Repurchase, including, for the purposes
of evaluating the terms and conditions of the Scheme and the Standby Offer and advising
Shareholders thereon, as required by the Takeover Regulations. The Independent Board
comprises Messrs. RWR Buchholz, GC Dunnington, GP de Kock, and MR Thompson.
1.8. The purpose of this Firm Intention Announcement is to advise Shareholders of the Proposed
Repurchase and specifically the terms and conditions of the Scheme and the Standby Offer.
2. RATIONALE FOR THE PROPOSED REPURCHASE
2.1. Sasfin has issued and the public have subscribed for 1 797 226 Preference Shares.
2.2. These Preference Shares were issued in two tranches at a price of either R100.00 on
17 November 2004 or R110.50 on 7 June 2006 per Preference Share and, on the date
preceding this Firm Intention Announcement, the Preference Shares had a current blended
carrying value on Sasfin’s balance sheet of R104.65 per Preference Share (“Book Value”).
2.3. Current market conditions, including low liquidity in trading volumes, have resulted in the
Preference Shares trading at a material discount to their issued value and Book Value. The
quoted closing price of the Preference Shares on Tuesday, 17 March 2021, the day preceding
this Firm Intention Announcement was R65.98 per Preference Share.
2.4. The Proposed Repurchase, whether implemented through the Scheme or the Standby Offer,
will be value accretive to the ordinary shareholders of Sasfin.
2.5. The Board has thus proposed that Sasfin uses available internal cash resources to repurchase
the Preference Shares. The Proposed Repurchase (which will cost Sasfin a maximum of
approximately R127.60 million to fund the Scheme Consideration, being the maximum
consideration required to implement the Proposed Repurchase, which is to be implemented
by way of the Scheme or the Standby Offer) will provide Eligible Shareholders with an
opportunity to realise their investment in the Preference Shares through an exit / partial exit at
a premium.
2.6. The Scheme Consideration and the Standby Offer Consideration represents a 34.37% and
28.69% premium respectively, to the 60-day volume weighted average price of the Preference
Shares of R52.84 per Preference Share at the date of the First Cautionary Announcement.
The Scheme Consideration and the Standby Offer Consideration represents a 33.03% and
27.41% premium respectively, to the 30-day volume weighted average price of the Preference
Shares of R53.37 per Preference Share at the date of the First Cautionary Announcement.
3. TERMS AND CONDITIONS OF THE SCHEME
The Scheme constitutes an “affected transaction” as defined in section 117(1)(c)(iii) of the Companies
Act and, as such, is regulated by the Companies Act and the Companies Regulations. The salient
terms of and other information pertaining to the Scheme are set out below:-
3.1. Terms of the Scheme
3.1.1. The Scheme will be proposed by the Board between the Company and Eligible
Shareholders.
3.1.2. The Scheme will be subject to the fulfilment of the Scheme Conditions set out in
paragraph 3.3 below.
3.1.3. In the event that the Scheme becomes unconditional and operative, Eligible
Shareholders, excluding those Eligible Shareholders who validly exercise their
appraisal rights in accordance with section 164 of the Companies Act as a
consequence of the approval of the Scheme and whose rights have not been
reinstated as envisaged in sections 164(9) and 164(10) of the Companies Act, or
who have not been ordered by any South African court of competent jurisdiction
(“Court”) to withdraw their demands in terms of section 164(15)(c)(v)(aa) of the
Companies Act (“Scheme Participants”), will be deemed to have disposed of all
of their Scheme Shares at the Scheme Consideration, such that Sasfin will
acquire all of the Scheme Shares previously held by the Scheme Participants,
whereafter the listing of all the Scheme Shares on the JSE will be terminated.
3.2. Scheme Consideration
The Scheme Participants shall receive the Scheme Consideration, being an amount of R71.00
per Scheme Share held by such Scheme Participant.
3.3. Scheme Conditions
3.3.1. The implementation of the Scheme is subject to the fulfilment or waiver, as the
case may be, of the following suspensive conditions (“Scheme Conditions”) by
no later than 31 August 2021 or such later date as Sasfin may in its sole discretion
determine (“Scheme Conditions Fulfilment Date”):-
3.3.1.1. all necessary Shareholder approvals and/or resolutions as may be
necessary to give effect to the Scheme have been obtained including,
but not limited to:-
3.3.1.1.1. the passing of a special resolution by Eligible
Shareholders in terms of sections 114(1)(c) and (e)
and section 115(2)(a) of the Companies Act
(“Scheme Resolution”) at the general meeting of
Eligible Shareholders expected to be held on or
about Friday, 14 May 2021 (or any other adjourned
or postponed date and time, as applicable)
(“Eligible Shareholders General Meeting”) in
order to consider and, if deemed fit, pass the
Scheme Resolution;
3.3.1.1.2. the passing of a special resolution in terms of section
48(8)(b) (read with sections 114 and 115(2)(a) of the
Companies Act) (“Companies Act Repurchase
Resolution”) at the general meeting of all
Shareholders expected to be held on or about
Friday, 14 May 2021 (or any other adjourned or
postponed date and time, as applicable)
(“Combined General Meeting”) in order to consider
and, if deemed fit, pass (amongst others), the
Companies Act Repurchase Resolution to authorise
the Proposed Repurchase, either by way of the
Scheme or the Standby Offer; and
3.3.1.1.3. the passing of a special resolution, in terms of
paragraph 5.69 of the Listings Requirements by
Shareholders (other than Eligible Shareholders)
(“LRs Specific Repurchase Resolution”) at the
Combined General Meeting, to authorise the specific
repurchase to be implemented, either by way of the
Scheme or the Standby Offer;
3.3.1.2. receipt of the Independent Expert’s Report, envisaged in
paragraph 7.1 below;
3.3.1.3. no written notice is received by Sasfin from those Shareholders (who
are entitled to exercise their appraisal rights in accordance with
section 164 of the Companies Act) objecting to the Scheme
Resolution and/or the Companies Act Repurchase Resolution (in
terms of section 164(3) of the Companies Act) before the Scheme
Resolution and/or the Companies Act Repurchase Resolution are to
be voted on at the Eligible Shareholders General Meeting and/or the
Combined General Meeting, as the case may be. If any such
objection notices are received by the Company, then it is noted that
the chairperson of the Eligible Shareholders Meeting and the
Combined General Meeting, as the case may be, may close the
meeting/s without putting such special resolution/s to the vote;
3.3.1.4. to the extent that the provisions of section 115(2)(c) of the Companies
Act become applicable:-
3.3.1.4.1. the Scheme being approved by the 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
3.3.1.4.2. Sasfin not treating the Scheme Resolution and/or the
Companies Act Repurchase Resolution as a nullity
in terms of section 115(5)(b) of the Companies Act;
3.3.1.5. to the extent required, the receipt of any consents and/or approvals
required from Sasfin’s lenders in respect of the implementation of the
Scheme; and
3.3.1.6. all approvals, consents or waivers from those South African
regulatory authorities as may be necessary for Sasfin to implement
the Scheme, including the Takeover Regulation Panel established in
terms of section 196 of the Companies Act (“TRP”), by means of the
issue of a compliance certificate as required by section 115(1)(b)
(read with sections 119(4)(b) and section 121(b)(i)) of the Companies
Act, are obtained on an unconditional basis or, to the extent that any
such regulatory approvals, consents or waivers are obtained subject
to any condition or qualification, Sasfin confirms in writing that the
condition or qualification is acceptable to it.
3.3.2. Sasfin shall be entitled to waive (in whole or in part) in writing the Scheme
Conditions stipulated in paragraph 3.3.1.3 and paragraph 3.3.1.5. The remaining
Scheme Conditions stipulated above are not capable of waiver.
3.3.3. The Scheme Conditions Fulfilment Date may be extended by Sasfin, subject to
any approval as may be required from the TRP. An announcement will be
released on SENS and published in the South African press as soon as
reasonably practicable after all the Scheme Conditions have been fulfilled or
waived, if the Scheme Conditions are not fulfilled or waived timeously, or if the
time and/or date for fulfilment or waiver of the Scheme Conditions is extended.
3.4. Termination of the Scheme
The Scheme shall terminate and cease with immediate effect if any of the Scheme Conditions
have not been fulfilled or waived (as the case may be) on or by the Scheme Conditions
Fulfilment Date.
4. TERMS AND CONDITIONS OF THE STANDBY OFFER
4.1. Terms of the Standby Offer
4.1.1. Simultaneously with the Scheme, Sasfin will make a separate but concurrent
Standby Offer, in terms of sections 48(8)(b), 114 and 115 of the Companies Act,
to Eligible Shareholders, whereby each Eligible Shareholder will be entitled to
elect whether or not to dispose of all (or a portion) of their Standby Offer Shares
to Sasfin for the Standby Offer Consideration.
4.1.2. For the avoidance of doubt, implementation of the Standby Offer will be
conditional on, amongst others, the Scheme not becoming unconditional and
operative. In the event that the Scheme does become unconditional and
operative, the Standby Offer will lapse and be of no force and effect.
4.1.3. In the event that the Standby Offer becomes unconditional and is implemented,
Sasfin will acquire all of the Standby Offer Shares tendered and previously held
by those Eligible Shareholders who have accepted the Standby Offer
(“Standby Offer Participants”).
4.2. Standby Offer Consideration
Standby Offer Participants shall, if they accept the Standby Offer, receive the Standby Offer
Consideration, being an amount of R68.00 per Standby Offer Share held by such Standby
Offer Participant.
4.3. Standby Offer Conditions
4.3.1. The implementation of the Standby Offer is subject to the fulfilment or waiver, as
the case may be, of the following suspensive conditions
(“Standby Offer Conditions”) by no later than 31 August 2021 or such later date
as Sasfin may, in its sole discretion, determine
(“Standby Offer Conditions Fulfilment Date”):-
4.3.1.1. the Scheme does not become unconditional and operative (meaning
that a Scheme Condition has not been fulfilled or waived by the
Scheme Conditions Fulfilment Date);
4.3.1.2. all necessary Shareholder approvals and/or resolutions as may be
necessary to give effect to the Standby Offer have been obtained,
including, but not limited to:-
4.3.1.2.1. the passing of the Companies Act Repurchase
Resolution at the Combined General Meeting to
authorise the Proposed Repurchase either by way of
the Scheme or the Standby Offer; and
4.3.1.2.2. the passing of the LRs Specific Repurchase
Resolution by Shareholders (other than Eligible
Shareholders) at the Combined General Meeting to
authorise the specific repurchase to be implemented
either by way of the Scheme or the Standby Offer;
4.3.1.3. receipt of the Independent Expert’s Report, envisaged in
paragraph 7.1 below;
4.3.1.4. no written notice is received by Sasfin from those Shareholders (who
are entitled to exercise their appraisal rights in accordance with
section 164 of the Companies Act) objecting to the Companies Act
Repurchase Resolution (in terms of section 164(3) of the Companies
Act) before the Companies Act Repurchase Resolution is to be voted
on at the Combined General Meeting. If any such objection notices
are received by the Company, then it is noted that the chairperson of
the Combined General Meeting may close the meeting without
putting such special resolution/s to the vote;
4.3.1.5. to the extent that the provisions of section 115(2)(c) of the Companies
Act become applicable:-
4.3.1.5.1. the Standby Offer being approved by the 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
4.3.1.5.2. Sasfin not treating the Companies Act Repurchase
Resolution as a nullity in terms of section 115(5)(b)
of the Companies Act;
4.3.1.6. to the extent required, the receipt of any consents and/or approvals
required from Sasfin’s lenders in respect of the implementation of the
Standby Offer; and
4.3.1.7. the receipt of all approvals, consents or waivers from those South
African regulatory authorities as may be necessary for Sasfin to
implement the Standby Offer, including the TRP, by means of issue
of a compliance certificate as required by section 115(1)(b) (read with
sections 119(4)(b) and 121(b)(i)) of the Companies Act, on an
unconditional basis or, to the extent that any such regulatory
approvals, consents or waivers are obtained subject to any condition
or qualification, Sasfin confirms in writing that the condition or
qualification is acceptable to it.
4.3.2. Sasfin shall be entitled to waive (in whole or in part) in writing the Standby Offer
Conditions stipulated in paragraph 4.3.1.4 and paragraph 4.3.1.6. The remaining
Standby Offer Conditions stipulated above are not capable of waiver.
4.3.3. The Standby Offer Conditions Fulfilment Date may be extended by Sasfin,
subject to any approval as may be required from the TRP. An announcement will
be released on SENS and published in the South African press as soon as
reasonably practicable after all the Standby Offer Conditions have been fulfilled
or waived, if the Standby Offer Conditions are not fulfilled or waived timeously, or
if the time and/or date for fulfilment or waiver of the Standby Offer Conditions is
extended.
4.4. Termination of the Standby Offer
The Standby Offer shall terminate and cease with immediate effect if the Scheme is
implemented or if any of the Standby Offer Conditions have not been fulfilled or waived (as
the case may be) on or by the Standby Offer Fulfilment Date (or such extended date, as
applicable).
5. IRREVOCABLE UNDERTAKINGS
5.1. Sasfin has obtained approval from the TRP to approach Eligible Shareholders to provide
irrevocable undertakings to:-
5.1.1. vote their relevant number of Preference Shares, which are either held as
principal or on behalf of clients, in favour of the resolutions to be proposed at the
Eligible Shareholders General Meeting and the Combined General Meeting, and
in respect of which they are entitled to vote (including the Scheme Resolution,
the Companies Act Repurchase Resolution and the LRs Specific Repurchase
Resolution) or such additional number of Preference Shares as they may hold at
the time of the Eligible Shareholders General Meeting and the Combined General
Meeting (together, the “Relevant Shares”); and/or
5.1.2. irrevocably accept the Standby Offer in respect of all (or some) of the Relevant
Shares.
5.2. Details of the irrevocable undertakings provided by Eligible Shareholders will be more fully set
out in the Circular to be distributed to Shareholders as referred to in paragraph 11 below.
6. SOLVENCY AND LIQUIDITY
6.1. The Board has reasonably concluded: (i) that Sasfin will satisfy the solvency and liquidity test
contemplated in section 4 of the Companies Act immediately after implementing the Proposed
Repurchase either by way of the Scheme or the Standby Offer; and (ii) for purposes of
paragraph 5.69(c) of the Listings Requirements, that after considering the effect of the
Proposed Repurchase on Sasfin and its subsidiaries (“Sasfin Group”), the provisions of
sections 4 and 48 of the Companies Act have been complied with and that:
6.1.1. the Sasfin Group will be able, in the ordinary course of business, to pay their
debts for a period of 12 months after the date of approval of the Circular to be
distributed to Shareholders as referred to in paragraph 11 below;
6.1.2. the assets of the Sasfin Group will exceed the liabilities of the Sasfin Group for a
period of 12 months after the date of approval of the Circular to be distributed to
Shareholders as referred to in paragraph 11 below;
6.1.3. the share capital and reserves of the Sasfin Group will be adequate for ordinary
business purposes for a period of 12 months after the date of approval of the
Circular to be distributed to Shareholders as referred to in paragraph 11 below;
and
6.1.4. the working capital of the Sasfin Group will be adequate for ordinary business
purposes for a period of 12 months after the date of approval of the Circular to be
distributed to Shareholders as referred to in paragraph 11 below.
6.2. The financial effect of the Proposed Repurchase on Sasfin is a maximum cash outflow of
approximately R127.60 million and a debit against Preference Share capital. The estimated
once-off transaction costs in respect of the Proposed Repurchase will be more fully set out in
the Circular to be distributed to Shareholders as referred to in paragraph 11 below.
7. INDEPENDENT EXPERT AND FAIR AND REASONABLE OPINION
7.1. In accordance with section 114(2) of the Companies Act, the Independent Board has
appointed BDO Corporate Finance Proprietary Limited as the independent expert in terms of
section 114(2) of the Companies Act and regulation 90 of the Companies Regulations
(“Independent Expert”) to provide the Independent Board with external advice in relation to
the Scheme and the Standby Offer, in the form of a fair and reasonable opinion as required
by and in compliance with the Takeover Regulations (“Independent Expert’s Report”).
7.2. The full substance of the Independent Expert’s Report in connection with the Scheme and the
Standby Offer, once procured, will be more fully set out in the Circular to be distributed to
Shareholders as referred to in paragraph 11 below.
8. VIEWS OF THE INDEPENDENT BOARD
The views of the Independent Board, taking into account the report of the Independent Expert, will be
more fully set out in the Circular to be distributed to Shareholders as referred to in paragraph 11 below.
9. RESPONSIBILITY STATEMENTS
The Independent Board and the Board, individually and collectively, accept full responsibility for the
accuracy of the information contained in this Firm Intention Announcement which relates to Sasfin, the
Scheme and the Standby Offer, and certify that, to the best of their knowledge and belief, such
information is true, and that this Firm Intention Announcement does not omit any facts that would make
any of the information false or misleading or would be likely to affect the importance of any information
contained in this Firm Intention Announcement. The Independent Board and the Board have made all
reasonable enquiries to ascertain that no facts have been omitted and that this Firm Intention
Announcement contains all information required by law, the Companies Act and the Listings
Requirements.
10. CONFIRMATION OF CASH SET ASIDE
Sasfin will use available cash resources within the Sasfin Group (other than Sasfin Bank Limited) to
fund the Scheme Consideration or Standby Offer Consideration, as applicable. The funds to settle the
Scheme Consideration and/or the Standby Offer Consideration are available and are currently held in
an account with Sasfin Bank and, in accordance with regulation 111(4) and 111(5) of the Takeover
Regulations, Sasfin has delivered to the TRP a written confirmation of cash set aside in respect of the
total Scheme Consideration, being the maximum possible consideration in respect of the Proposed
Repurchase.
11. POSTING OF THE CIRCULAR AND NOTICE OF THE ELIGIBLE SHAREHOLDERS GENERAL
MEETING AND THE COMBINED GENERAL MEETING
11.1. A circular providing full details of the Scheme and the Standby Offer, and containing a notice
of the Eligible Shareholders General Meeting and the Combined General Meeting, the
Independent Expert’s Report, the recommendations of the Independent Board, the salient
dates and times relating to the Scheme and the Standby Offer and the necessary forms in
order to effect the Scheme and the Standby Offer, is expected to be distributed to
Shareholders on or about Wednesday, 14 April 2021 (“Circular”).
11.2. The Eligible Shareholders General Meeting is expected to be held on or about Friday, 14 May
2021 at Sasfin’s registered office, 29 Scott Street, Waverley, Johannesburg, South Africa,
2090.
11.3. The Combined General Meeting is expected to be held on or about Friday, 14 May 2021 at
the abovementioned address.
11.4. The Eligible Shareholders General Meeting and the Combined General Meeting will be
conducted entirely through electronic communication. The electronic meeting facilities will
permit all Shareholders to be able to communicate concurrently with each other without an
intermediary, and to participate reasonably effectively in the meeting. Voting via the electronic
facility will be the only method available to Shareholders to vote their shares at these meetings.
11.5. A further announcement setting out details of the salient dates and times will be published on
SENS in due course.
12. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENTS
The Cautionary Announcements are hereby withdrawn and, accordingly, Shareholders do not need to
exercise caution in dealing in their Sasfin securities.
Johannesburg
18 March 2021
CORPORATE ADVISOR AND SPONSOR
Sasfin Capital Proprietary Limited
INDEPENDENT SPONSOR
Deloitte & Touche Sponsor Services Proprietary Limited
LEGAL ADVISOR
Edward Nathan Sonnenbergs Incorporated
INDEPENDENT EXPERT
BDO Corporate Finance Proprietary Limited
TRANSFER SECRETARY
Computershare Investor Services Proprietary Limited
Date: 18-03-2021 07:05:00
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