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ESOR LIMITED - Firm Intention Anouncement by Geomer Investments to make a Mandatory Offer to the Shareholders of ESOR - ESR

Release Date: 21/10/2016 17:00:00      Code(s): ESR       PDF(s):  
Firm Intention Anouncement by Geomer Investments to make a Mandatory Offer to the Shareholders of ESOR - ESR

ESOR LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1994/000732/06)
JSE code: ESR
ISIN: ZAE000184669
(“Esor” or “the company”)


FIRM INTENTION ANNOUNCEMENT BY GEOMER INVESTMENTS TO MAKE A MANDATORY OFFER
TO THE SHAREHOLDERS OF ESOR

1. Introduction

The shareholders of Esor are hereby advised that Geomer Investments
Proprietary Limited (“Geomer Investments”) has acquired 42 683 901 ordinary
shares, representing approximately 11.70% (net of treasury shares) in the
issued share capital of Esor from Mr Kamal Parabhu Natha (“Natha
Acquisition”), such that the entire beneficial interest of Geomer
Investments in the issued share capital of Esor is 154 715 952 shares.

Prior to the Natha Acquisition, Geomer Investments owned 112 032 051
ordinary shares in Esor representing a shareholding of approximately 30.70%
(net of treasury shares). The Natha Acquisition has resulted in Geomer
Investments increasing its shareholding in Esor to 42.39%. Geomer
Investments is in a position to exercise voting rights over its entire
shareholding in Esor.

2. Mandatory offer

As a result of the Natha Acquisition, in terms of Section 123 of the
Companies Act, Act No. 71 of 2008, as amended, (the “Companies Act”) Geomer
Investments has increased its shareholding and voting power in Esor to more
than 35% and is obligated to make a mandatory offer to all Esor
shareholders to acquire all of the ordinary shares of Esor, other than
those that it already owns (the “Offer Shares”), on the terms set out in
paragraph 3 below (the “Mandatory Offer”).

Geomer Investments has notified the board of directors of Esor of its
obligation to proceed with the Mandatory Offer. The Offer is an affected
transaction as defined in section 117(1)(c) of the Companies Act and,
accordingly, will be regulated by the Companies Act, the Companies
Regulations and the Takeover Regulation Panel (“TRP”).

3. Terms of the Mandatory Offer

Under the terms of the Mandatory Offer, Geomer Investments shall     acquire
each Offer Share for R0.38 (38 cents), which is equal to the         highest
consideration paid, by Geomer Investments for an ordinary share      in the
issued share capital in Esor in the 6 months prior to the expected   opening
date of the Mandatory Offer.


4. Rationale for the Mandatory Offer

As mentioned above, Geomer Investments is obliged to make the Mandatory
Offer. Geomer Investments does not anticipate any change to the nature of
Esor’s business following the Mandatory Offer.
5. Concert parties

Geomer Investments hereby advises Esor shareholders that Wheatfield Estate
Foundation Trust (“Wheatfield”), which owns 230 000 ordinary shares of
Esor, representing approximately 0.06% (net of treasury shares) in the
issued share capital of Esor, is deemed to be a concert party in terms of
regulation 84 of the Companies Regulations, 2011 (the “Companies
Regulations”).

Neither Geomer Investments nor Wheatfield, hold any options to purchase any
additional ordinary shares of Esor.

6. Irrevocable undertakings

The following Esor shareholders, which collectively hold 52 849 867
ordinary shares of Esor, have provided irrevocable undertakings not to
accept the Mandatory Offer:

Shareholder                                    Number of Esor   Percentage of Esor
                                               shares           shares owned 1
The Esor Broad Based Share Ownership Scheme    21 012 250       5.76%
Mr Bernard Krone                               10 000 000       2.74%
Esor Construction Proprietary Limited          9 231 762        2.53%
Rapidough Properties 471 CC                    4 800 000        1.32%
Mr Willem Deon Nel                             4 742 655        1.30%
Mr Warren Clifford Van Der Vyver               2 017 950        0.55%
Mr Wessel Cornelius Van Zyl                    815 250          0.22%
Wheatfield Estate Foundation Trust             230 000          0.06%


(1)   Based on outstanding number of shares of Esor of 364 941 418, excluding
      treasury shares of 30 244 012.

No Esor shareholder has provided any irrevocable undertaking to accept the
Mandatory Offer.

7. Posting of circular and Mandatory Offer period

7.1 Posting of Mandatory Offer circular

The circular to shareholders setting out the terms of the Mandatory Offer
(“Mandatory Offer Circular”) is expected to be posted to shareholders on or
about 2 November 2016.

7.2 Mandatory Offer Period

The Mandatory Offer is expected to open on or about 3 November 2016, being
one business day after the expected posting date of the Mandatory Offer
Circular and will be open for a minimum period of 30 business days as per
Regulation 102 of the Companies Act (“Initial Offer Period”).

The Mandatory Offer      is subject to a number of conditions precedent
including the need       potentially for approval from the Competition
Authorities.

Geomer Investments has approached the Competition Authorities in order to
obtain approval to acquire the entire shareholding in Esor it does not
already own so that the Mandatory Offer can be declared unconditional.
In the event this approval has not been obtained prior to the date that the
Mandatory Offer is expected to open, the following process will be followed
in respect of the Mandatory Offer:

-   The decision as to whether Geomer Investments definitively requires
    Competition Authority Approval to implement the Mandatory Offer as a
    result of Geomer Investments obtaining control of Esor, will be made 20
    business days after the date the Mandatory Offer opens. (The period
    between the date the Mandatory Offer opens and 20 business days after
    such opening date being the (“Finalisation Period”).

-   Should   Competition  Authority   Approval   be  obtained   during   the
    Finalisation Period, the Mandatory Offer will be declared unconditional
    and implemented to the extent of the number of acceptances received.


-   Should there be no need for Competition Authority Approval at the end
    of the Finalisation Period, the Mandatory Offer will be declared
    unconditional and implemented to the extent of the number of
    acceptances received.

-   If during the Finalisation Period Competition Authority approval is
    required and such approval has not been obtained, the Initial Offer
    Period will be extended to accommodate this process (“Extended Offer
    Period”) subject to the approval of the TRP in terms of Regulation 103.

-   If during the Extended Offer Period the requisite Competition Authority
    approval   is  received,   the  Mandatory  Offer   shall  be   declared
    unconditional and as per Regulation 105 of the Companies Act, remain
    open for a further 10 business days.

-   If during the Extended Offer Period the Competition Authority approval
    is no longer required, the Mandatory Offer shall be declared
    unconditional and as per Regulation 105 of the Companies Act, remain
    open for a further 10 business days.

-   If during the Extended Offer Period the Competition Authority approval
    is not obtained or is declined, the Mandatory Offer will not be
    implemented.

Notwithstanding the decision regarding the requirement for Competition
Authority approval, the period in relation to the Mandatory Offer will not
be affected but will remain open for the statutory period of 30 business
days provided in Regulation 102 and Geomer Investments will continue to
acquire shares in Esor until the closing date of the Mandatory Offer
whether such closing happens after 30 business days as per the Initial
Offer Period or at the end of the Extended Offer Period.

8. Conditions precedent

The Mandatory Offer is subject to the approval and consent from all
relevant regulatory authorities required to implement the Mandatory Offer,
which shall include the approval of the TRP by way of the issuance of the
requisite compliance certificate and the Competition Authorities.


9. Funding of the Mandatory Offer
Investec Bank Limited has furnished the TRP with the requisite guarantee
that Geomer Investments has sufficient cash resources and/or facilities to
undertake the Mandatory Offer.


10. Appointment of independent board and independent expert

An independent sub-committee of the board of directors of Esor which shall
be comprised of at least 3 directors of Esor (the “Independent Board”) will
be formed for the purposes of considering the Mandatory Offer in accordance
with the requirements of the regulations of the Companies Act.

The Independent Board shall be required to appoint an independent expert as
per regulation 110 of the Companies Act to advise and report to the
Independent Board on the Mandatory Offer by way of a fair and reasonable
opinion.

The full report of the independent expert as well as the opinion of the
Independent Board on the Mandatory Offer will be included in the Mandatory
Offer Circular to be posted to Shareholders.

11. Responsibility statement

Geomer Investments and to the extent that the information relates directly
to Esor, the board of directors of Esor, accept responsibility for the
information contained in this firm intention announcement. To the best of
their respective knowledge and beliefs, the information contained in this
firm intention announcement is true and nothing has been omitted which is
likely to affect the importance of the information.


Germiston
21 October 2016

Corporate Advisor and Sponsor
Vunani Corporate Finance

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