Wrap Text
Joint announcement – standby offer update on acceptances and settlement process
BARLOWORLD LIMITED K2024528179 (SOUTH AFRICA) PROPRIETARY LIMITED
(Incorporated in the Republic of South Africa) (Incorporated in the Republic of South Africa)
(Registration number 1918/000095/06) (Registration number: 2024/528179/07)
(JSE share code: BAW) ("Newco" or the "Offeror")
(JSE ISIN: ZAE000026639)
(Share code: BAWP)
(A2X code: BAW)
(JSE ISIN: ZAE000026647)
(Bond issuer code: BIBAW)
("Barloworld" or the "Company")
Joint announcement – standby offer update on acceptances and settlement process
Unless otherwise defined in this announcement, capitalised words and expressions have the meanings given to them in the Circular to
Barloworld shareholders dated 29 January 2025 and the joint announcement released by Barloworld and Newco on SENS and ANS on
Friday, 28 February 2025, advising Barloworld Ordinary Shareholders that the Standby Offer had been triggered and had become open
for acceptance by Barloworld Ordinary Shareholders.
1. INTRODUCTION
Barloworld Ordinary Shareholders are referred to the joint announcement released by Barloworld and Newco on SENS and
ANS on Wednesday, 1 October 2025, advising Barloworld Ordinary Shareholders that all Standby Offer Conditions, as set out
in the Circular, had been fulfilled or waived and the Standby Offer had become unconditional (the "Finalisation Announcement").
2. UPDATE ON ACCEPTANCES
As at the date of this announcement, Newco has received Valid Acceptances of the Standby Offer in respect of 108,251,025
Barloworld Ordinary Shares which equate to approximately 58.0% of all the Barloworld Ordinary Shares in issue (excluding
Treasury Shares). This, together with the Consortium's and the Barloworld Foundation's existing shareholdings, equates to
81.4% of the Barloworld Ordinary Shares in issue (excluding Treasury Shares).
3. STANDBY OFFER PROCESS
In accordance with Regulation 102(13) of the Takeover Regulations, a request for a compliance certificate in respect of the
Standby Offer has been submitted to the TRP. Provided that Newco receives the compliance certificate by no later than Tuesday,
7 October 2025, settlement of the Standby Offer will occur in accordance with the timetable set out in paragraph 5 below.
Barloworld Ordinary Shareholders who still wish to accept the Standby Offer have until Wednesday, 15 October 2025 ("Closing
Date"), being at least 10 Business Days after the date of the Finalisation Announcement, to accept the Standby Offer. The
Standby Offer will close on the Closing Date and any Barloworld Ordinary Shareholders who have not accepted the Standby
Offer by 12h00 on the Closing Date will no longer be able to accept the Standby Offer and will not be entitled to receive the Per
Share Standby Offer Consideration.
Where Barloworld Ordinary Shareholders, their CSDPs or brokers have any questions in relation to the Standby Offer, they
should refer to the detailed Frequently Asked Questions on the Issuer's website at https://barloworld.com/investors/standby -
offer-faq/ or refer queries to Barloworld's investor relation team at bawir@barloworld.com.
4. DISPUTE REGARDING THE PER SHARE STANDBY OFFER CONSIDERATION
On 4 October 2025, the TRP issued a binding ruling in terms of section 200(3) of the Companies Act that the Per Share Standby
Offer Consideration is R120 per Barloworld Ordinary Share (the "Ruling"). The Ruling is attached to this announcement.
Although Newco disagrees with the Ruling, it has elected to proceed with settlement as it is in the best interests of shareholders
to do so whilst reserving its rights.
5. DATES AND TIMES
The Standby Offer will be implemented in accordance with the timetable below:
First payment date (payment of the Per Share Standby Wednesday, 8 October 2025
Offer Consideration to Barloworld Ordinary Shareholders
who have accepted the Standby Offer by Friday, 3
October 2025):
Last day to trade in Barloworld Ordinary Shares in order Friday, 10 October 2025
to be able to accept the Standby Offer:
Barloworld Ordinary Shares trade ex-entitlement to Monday, 13 October 2025
accept the Standby Offer
Second payment date (Payment of the Per Share Standby Wednesday, 15 October 2025
Offer Consideration to Barloworld Ordinary Shareholders
who have accepted the Standby Offer by Friday, 10
October 2025):
Record date and the Standby Offer closes at 12:00 on Wednesday, 15 October 2025
(Closing Date)
Results of the Standby Offer announced on SENS and the Thursday, 16 October 2025
ANS:
Third payment date (payment of the Per Share Standby Thursday, 16 October 2025
Offer Consideration to Barloworld Ordinary Shareholders
who have accepted the Standby Offer by Wednesday, 15
October 2025):
Notes:
1 The Standby Offer Consideration due to dematerialised shareholders who have validly accepted the Standby Offer on the Closing Date will be
credited to their accounts with their Intermediaries within a period of six business days after the Closing Date.
2 The Standby Offer Consideration due to certificated shareholders who have validly accepted the Standby Offer on the Closing Date (including
by completing the relevant section of the Form of Acceptance and Transfer (pink)) will be settled by way of electronic funds transfer, within a
period of six business days after the Closing Date.
6. RESPONSIBILITY STATEMENTS
The Independent Board
The Independent Board (to the extent that the information relates to Barloworld), individually and collectively, accepts
responsibility for the information contained in this announcement and certifies, to the best of its knowledge and belief, tha t the
information contained in this announcement is true and that this announcement does not omit anything that is likely to affect the
importance of the information included.
Newco
The board of directors of Newco (to the extent that the information relates to Newco), individually and collectively, accepts
responsibility for the information contained in this announcement and certifies, to the best of its knowledge and belief, tha t the
information contained in this announcement is true and that this announcement does not omit anything that is likely to affect the
importance of the information included.
Johannesburg
6 October 2025
Exclusive financial adviser, corporate broker and transaction sponsor to Barloworld
Rand Merchant Bank (A division of FirstRand Bank Limited)
Legal adviser to Barloworld
DLA Piper
Communications adviser to Barloworld
ByDesign Communications
Joint financial advisers to the Offeror
Deutsche Bank
The Standard Bank of South Africa Limited
Tamela Holdings Proprietary Limited
Legal adviser to the Offeror
Bowmans
South African legal adviser on competition law and legal due diligence to the Offeror
Webber Wentzel
International legal adviser on competition law and legal due diligence to the Offeror
Ashurst
Communications adviser to the Offeror
FTI Consulting
RULING OF THE EXECUTIVE DIRECTOR IN TERMS OF REGULATION 118(3) OF
THE COMPANIES REGULATIONS, 2011 - RE: BARLOWORLD LIMITED / MAIN
STREET 1852 PROPRIETARY LIMITED – STANDBY OFFER CONSIDERATION
1. Introduction and Procedural Background
1.1. This Ruling is issued by the Deputy Executive Director of the Takeover
Regulation Panel (Panel) pursuant to Regulation 118(3) of the Companies
Regulations, 2011, read with section 200(3) of the Companies Act, 2008
(Act). It addresses the dispute concerning the correct per share
consideration payable to the shareholders of Barloworld Limited
(Barloworld) under the Standby Offer component of a composite offer (the
Offer) made by Main Street 1852 Proprietary Limited (Newco).
1.2. The central interpretative question is whether the consideration payable is
R120.00, as explicitly stated for the Standby Offer in paragraph 7.3 of the
offer circular (the Circular), or R118.80, which reflects an automatic price
adjustment for a dividend payment that applied to the Scheme of
Arrangement (the Scheme) component of the Offer.
1.3. The Deputy Executive Director has received and reviewed written
submissions from Bowmans (on behalf of Newco) and Protea Capital
Management (on behalf of affected shareholders), in accordance with
Regulation 118(3). The principle of audi alteram partem has been
respected, as both parties were afforded a full opportunity to present their
positions.
1.4. Unless otherwise specified:
1.4.1. terms defined in the Act and the Regulations hold the meanings
attributed to them therein; and
1.4.2. all references to a "section" refer to a section of the Act, and all
references to a "regulation" refer to a regulation in the Regulations.
2. Factual Background
2.1. Newco issued the Circular to Barloworld shareholders, presenting a
composite Offer comprising two implementation mechanisms: a Scheme
of Arrangement, and a Standby Offer that would proceed only if the
Scheme failed.
2.2. The "Per Share Scheme Consideration" was defined in the Circular as
R120.00, subject to an automatic downward adjustment for any dividends
declared by Barloworld prior to completion. The "Per Share Standby Offer
Consideration" was defined as an amount "no less than the Per Share
Scheme Consideration."
2.3. Paragraph 7.3 of the Circular explicitly states that if the Offer is implemented
by way of the Standby Offer, the consideration payable is R120.00 per
share.
2.4. Barloworld subsequently declared and paid an interim dividend of R1.20 per
share on 24 June 2025. As a result, the Per Share Scheme Consideration
was automatically adjusted to R118.80 in accordance with the dividend
adjustment mechanism built into its definition.
2.5. The Scheme did not receive the requisite shareholder approval and
therefore failed. Consequently, the Standby Offer was triggered as the
operative implementation mechanism.
2.6. Conflicting announcements were subsequently made regarding the final
consideration payable to shareholders who accepted the Standby Offer,
with finalisation announcements stating R118.80, leading to the present
dispute.
3. Submissions of the Parties
3.1. Bowmans (on behalf of Newco, arguing for R118.80): The core of this
submission is that the Offer constitutes a "single composite offer" which
necessitates price uniformity across both implementation mechanisms.
Bowmans argues that:
3.1.1. It would not be permissible to make "two offers at different prices"
and the switch from Scheme to Standby Offer cannot trigger a
change in price;
3.1.2. "The whole concept of a single offer irrespective of the
implementation mechanism, is that the price at the onset is the
same";
3.1.3. "The only adjustment to the price can only occur under both
scenarios (Scheme or Standby Offer) as it is a single offer";
3.1.4. Having different prices depending on implementation mechanism
(R120 for Standby vs R118.80 for Scheme) would constitute "two
different offers on the back of each other, which is not permissible
under the Takeover Regulations";
3.1.5. The terms of the Scheme, including the dividend adjustment
mechanism, apply mutatis mutandis to the Standby Offer because
they are "part of a single offer";
3.1.6. The no-increase statement made by Newco on 13 February 2025
prevents payment of R120.00, as this would constitute an
impermissible increase above the adjusted Scheme price of
R118.80;
3.1.7. Press releases published since the dividend payment have
consistently communicated the offer price as R118.80, reflecting the
automatic adjustment that applies to both mechanisms.
3.2. Protea Capital Management (on behalf of affected shareholders, arguing for
R120.00): This submission relies on the plain language and structure of the
Circular. Protea Capital argues that:
3.2.1. Paragraph 7.3 explicitly and unambiguously states the Standby
Offer price is R120.00, with no mention of any dividend adjustment
mechanism;
3.2.2. The Circular's definitions establish separate treatment: the Scheme
Consideration definition expressly includes dividend adjustment
language, whilst the Standby Offer Consideration definition does
not include such language;
3.2.3. Press releases and finalisation announcements cannot override the
binding terms of the approved Circular;
3.2.4. The definitional phrase "no less than" is satisfied because R120.00
exceeds R118.80, and therefore the Standby Offer price of R120.00
is consistent with the Circular's definitional framework.
3.3. Additional Considerations: Beyond the parties' express submissions, the
Panel's analysis must also consider broader interpretative principles and
regulatory requirements inherent in its mandate under section 119 of the
Act. These include:
3.3.1. The application of the contra proferentem rule, given that
shareholders had no ability to negotiate the Circular's terms and
Newco had sole control over its drafting;
3.3.2. Whether the "no less than" language creates a regulatory floor
(permitting different pricing provided the Standby price does not fall
below the Scheme price) or requires strict equivalence;
3.3.3. The implications of Regulation 104, which prohibits downward price
revisions but permits upward variations;
3.3.4. Whether the Scheme and Standby Offer operate sequentially or
simultaneously, and the implications for shareholder equality under
the Act;
3.3.5. The commercial rationality of the pricing structure and total
shareholder value under each mechanism;
3.3.6. The purpose and legal effect of the no-increase statement in the
context of explicitly stated pricing provisions.
4. Regulatory Framework
4.1. The Panel's interpretation is guided by the general principles of takeover
regulation as set out in section 119 of the Act, which require the Panel to
ensure the integrity of the marketplace and fairness to the holders of
securities of regulated companies.
4.2. Regulation 104 is of particular relevance, as it prohibits any downward
revision of an offer price but permits upward revisions. Any interpretation
that results in a downward revision of a price explicitly communicated to
shareholders would be contrary to this regulation.
4.3. The Panel notes that the "no less than" formulation in the definition of Per
Share Standby Offer Consideration serves a specific regulatory compliance
purpose: it ensures that the Standby Offer price cannot fall below the
Scheme price, thereby preventing circumvention of Regulation 104's
prohibition on downward revisions. This creates a regulatory floor, not
necessarily a requirement of price equivalence.
4.4. The legal effect of a "no-increase statement", such as that made by Newco
on 13 February 2025, is to bind the offeror not to increase the offer price
above what was previously communicated to shareholders. Paying a price
that was explicitly stated in the Circular from its inception does not constitute
an "increase" in this regulatory context.
5. Legal Principles Governing Interpretation
5.1. The Circular as a Contractual Document
The Circular constitutes a binding contractual offer to shareholders. Its
interpretation is governed by established principles of South African contract
law, as authoritatively set out in cases such as Coopers & Lybrand and
Others v Bryant 1995 (3) SA 761 (A), Hypercheck (Pty) Ltd v Mutual and
Federal Insurance Company Ltd (Case No: 2010/2695, South Gauteng High
Court), and Fedgen Insurance Ltd v Leyds 1995 (3) SA 33 (A).
5.2. Plain Language and Contextual Interpretation
5.2.1. As stated by Mayat J in Hypercheck at paragraph 20(i):
"As with all other contracts, it is well-established that if the language
is clear, the court must give effect to the language which the parties
have themselves used...Words in an insurance contract must be
given their plain, ordinary, popular and grammatical meaning,
unless this would result in some absurdity, or it is evident from the
context that the parties intended the words in question to bear a
different meaning."
5.2.2. This principle applies equally to offer circulars in takeover
transactions. Crucially, as emphasised in Coopers & Lybrand v
Bryant at 767E-768A, the mode of construction should never be to
interpret particular words or phrases in isolation (in vacuo) by
themselves. The words must be considered with due regard to the
context in which they are used, their interrelation to the contract as
a whole, including the nature and purpose of the contract, and the
background circumstances which explain the genesis and purpose
of the contract.
5.3. The Contra Proferentem Rule
5.3.1. The contra proferentem rule is of decisive importance in interpreting
offer circulars. As held in Hypercheck at paragraph 20(iii) and
affirmed in Fedgen Insurance Ltd v Leyds at 38B-E:
"If the meaning of a word or clause in an insurance contract is not
clear, or the word or clause is ambiguous, the verba fortius
accipiuntur contra proferentem rule is applicable. This rule requires
a written document to be construed against the person who drafted
it."
5.3.2. And further from Fedgen:
"Any provision which purports to place a limitation upon a clearly
expressed obligation to indemnify must be restrictively
interpreted...for it is the insurer's duty to make clear what particular
risks it wishes to exclude...A policy normally evidences the contract
and an insured's obligation, and the extent to which an insurer's
liability is limited, must be plainly spelt out. In the event of a real
ambiguity the contra proferentem rule, which requires a written
document to be construed against the person who drew it up, would
operate against (the drafter)."
5.3.3. This principle applies with particular force to offer circulars in
takeover transactions, where the offeror unilaterally drafts all terms
with complete control over language, offerees have zero negotiating
power and receive take-it-or-leave-it terms, offerees must rely
entirely on the offeror's articulation of offer terms, and any limitation
on, or adjustment to, an explicitly stated consideration amount must
be plainly spelt out.
5.4. Specific Provisions Prevail Over General Definitions
As held in Hypercheck at paragraph 29, where there is tension between a
general definitional relationship and a specific operative provision
addressing a particular scenario, the specific provision governs. This is a
foundational principle of contractual interpretation recognised throughout
South African law.
5.5. Inclination Against Forfeiture
5.5.1. As stated in Hypercheck at paragraph 20(iv), quoting Schreiner JA
in Kliptown Clothing Industries (Pty) Ltd v Marine and Trade
Insurance Co of SA Ltd 1961 (1) SA 103 (AD) at 106 H-107 C:
"There is the further rule that the Court should incline towards
upholding the policy and against producing a forfeiture...It is for the
benefit of trade that policies should be construed in favour of
protection and against forfeiture."
5.5.2. This principle applies equally in the takeover context: interpretations
should favour upholding explicitly communicated consideration
amounts rather than producing retrospective reductions.
5.6. Purposive Interpretation and the Panel's Regulatory Mandate
5.6.1. The Panel's interpretive approach is fundamentally guided by its
statutory mandate under section 119 of the Act and the overarching
interpretive command in section 5(1). Section 5(1) provides that:
"This Act must be interpreted and applied in a manner that gives
effect to the purposes set out in section 7"
5.6.2. This is not a mere guideline; it is a legislative instruction that
mandates a purposive approach to interpretation, requiring the
Panel to ensure that its decisions advance the core objectives of
the Act.
5.6.3. The purposes set out in section 7, which include the promotion of
compliance with the Bill of Rights, the development of the South
African economy, and the encouragement of transparency and high
standards of corporate governance, inform the more specific
objectives of the takeover regulations. These are to ensure:
5.6.3.1. The integrity of the marketplace in relation to affected
transactions;
5.6.3.2. Fairness to the holders of securities of regulated
companies; and
5.6.3.3. The provision of sufficient information for security
holders to make informed decisions,
(section 119).
5.6.4. This purposive framework enables what can be termed "adaptive
regulation within statutory bounds." Unlike a purely code-based
system, the Act does not attempt to prescribe outcomes for every
conceivable transaction structure. Instead, it establishes high-level
principles and purposes, empowering the Panel to interpret and
apply these principles to novel or sophisticated transactions. This
ensures the regulatory framework remains effective and responsive
without requiring constant legislative amendment.
5.6.5. A key consequence of this approach is the primacy of substance
over form. The Panel must examine the true commercial and
practical substance of a transaction, avoiding interpretations that
rely on artificial legal compartmentalisation or that would allow
technical compliance with the letter of the law to defeat its protective
spirit. The focus is on the integrated economic reality of the
transaction and its practical effect on shareholders.
5.6.6. Crucially, this is not a licence for the Panel to disregard clear
language or to impose outcomes based on unstructured discretion.
The purposive approach is bounded by the text of the relevant
documents and the statute itself. It requires the Panel to:
5.6.6.1. interpret provisions in light of their commercial context
and the Act's protective purposes;
5.6.6.2. where the language admits of more than one reading,
prefer the interpretation that best advances the purposes
of the Act, particularly the protection of shareholders who
lack negotiating power;
5.6.6.3. reject interpretations that would allow sophisticated
drafting to circumvent fundamental regulatory principles;
and
5.6.6.4. uphold the reasonable expectations of shareholders who
rely on the explicit terms of Panel-approved documents.
5.6.7. In the context of interpreting offer circulars, this purposive,
substance-driven approach mandates that the Panel:
5.6.7.1. enforce the explicit terms on which shareholders have
demonstrably relied;
5.6.7.2. prevent the retrospective alteration of clearly
communicated consideration amounts;
5.6.7.3. protect the integrity and certainty of the offer process by
ensuring that the binding terms of the circular govern
over subsequent, potentially contradictory,
communications; and
5.6.7.4. assess the transaction as an integrated whole, rather
than as a series of artificially severed legal steps.
6. Analysis and Reasoning
6.1. The Plain Language of Paragraph 7.3
6.1.1. Paragraph 7.3 of the Circular states:
"Standby Offer Participants who accept the Standby Offer shall
receive a Per Share Standby Offer Consideration of ZAR 120.00 per
Barloworld Ordinary Share to be settled in accordance with
paragraph 7.6, which represents a premium of (i) 66% to the market
price on the JSE on the Pre-Cautionary Date; and (ii) 83% to the 30-
day VWAP on the Pre-Cautionary Date."
6.1.2. This provision:
6.1.2.1. applies specifically to the precise scenario that has
transpired (Standby implementation following Scheme
failure);
6.1.2.2. uses clear, unambiguous language to state the
consideration amount as "ZAR 120.00";
6.1.2.3. contains no reference to any dividend adjustment
mechanism, in stark contrast to the definition of the
Scheme Consideration.
6.2. Specific Provisions Prevail Over General Provisions
6.2.1. Newco's argument relies on elevating a general concept ("single
composite offer") and a general definitional relationship ("no less
than") over the specific, operative provision in paragraph 7.3 that
governs the exact circumstances that have arisen.
6.2.2. This contradicts the established legal principle that specific
provisions prevail over general ones. Paragraph 7.3 is the specific
provision governing the Standby Offer price. The definition of "Per
Share Standby Offer Consideration" as being "no less than" the
Scheme price is a general provision establishing a minimum floor.
The specific provision (R120.00) complies with and gives effect to
the general provision (R120.00 is "no less than" R118.80). There is
no conflict.
6.3. The Contra Proferentem Rule
6.3.1. To the extent that any ambiguity could be said to exist (which is not
conceded), it must be construed against Newco, the drafter of the
Circular. Shareholders were presented with a document stating, in
a specific and operative clause, that the Standby Offer price was
R120.00. They had no power to negotiate this term and were
entitled to rely on its plain meaning.
6.3.2. Applying the principles from Fedgen v Leyds, it was Newco's duty
as drafter to make clear any limitations on the explicitly stated
obligation to pay R120.00. Newco chose to include explicit dividend
adjustment language in the Scheme Consideration definition but not
to include any such language or cross-reference in the Standby
Offer Consideration definition or in paragraph 7.3 itself. These
deliberate drafting choices must be construed against Newco,
particularly given the power imbalance in the drafting process and
the take-it-or-leave-it nature of the offer to shareholders.
6.4. Substance Over Form and Purposive Interpretation
6.4.1. Newco's argument that this constitutes "two different offers" is an
exercise in form over substance. This was, from the outset, a single
transaction with two possible, mutually exclusive implementation
routes. The Circular, as a single document, set out the
consequences of each route.
6.4.2. The Panel's mandate is to ensure fairness and the provision of clear
information. It would be manifestly unfair to shareholders and would
undermine the principle of providing clear information to allow a
price explicitly stated for a specific outcome to be retrospectively
reduced based on a strained interpretation that imports a limitation
from a different clause governing a different outcome.
6.4.3. Upholding the plain language of paragraph 7.3 gives effect to the
purposes of the Act by promoting certainty, protecting the
reasonable expectations of shareholders, and holding the offeror to
the terms it presented in a Panel-approved document.
6.5. The "Two Offers at Different Prices" Argument
6.5.1. Bowmans' central contention is that interpreting the Standby Offer
price as R120.00 would create "two different offers on the back of
each other, which is not permissible under the Takeover
Regulations." The Panel finds this argument fundamentally
misconceived for the following reasons.
6.5.2. First, there are not "two offers" here. There is one offer with two
alternative implementation mechanisms. The distinction is critical:
6.5.2.1. an offer comprises the invitation to acquire shares at
stated terms;
6.5.2.2. the implementation mechanism is the legal/procedural
pathway by which that acquisition is effected;
6.5.2.3. the same underlying commercial transaction (Newco
acquiring Barloworld shares) is being implemented
through different legal procedures.
6.5.3. Second, the Panel has considered whether Regulation 111
prohibits different pricing between the Scheme and Standby Offer
mechanisms.
6.5.3.1. Regulation 111(2) provides that if an offeror has acquired
securities in the six months before the offer period, the
offer consideration must be "identical to, or where
appropriate, similar to, the highest consideration paid" for
those acquisitions. Regulation 111(6) provides that if
after the firm intention announcement the offeror
acquires securities above the offer consideration, the
offeror must "increase the offer consideration per
security to not less than the highest consideration paid."
6.5.3.2. These provisions establish important equality principles
ensuring all offerees receive at least the highest price
paid by the offeror or its concert parties. However, these
provisions do not apply to the pricing differential between
the Scheme and Standby Offer because:
6.5.3.2.1. Regulation 111(2) addresses pre-offer
acquisitions by the offeror or concert parties.
There is no suggestion that Newco or its
concert parties acquired Barloworld shares
at R118.80 during the relevant period. The
R118.80 figure derives from the automatic
dividend adjustment to the Scheme
Consideration — it is not a price actually paid
by Newco to any shareholder (pursuant to
the implementation of the Scheme).
6.5.3.2.2. Regulation 111(6) addresses acquisitions
during the offer period at above the offer
consideration. This provision addresses
actual acquisitions by the offeror at higher
prices. That scenario has not occurred here
(as far as the Panel is aware). The question
is which stated price in the Circular governs
the Standby Offer.
6.5.3.2.3. Most fundamentally, Regulations 111(2) and
(6) address the mischief of
contemporaneous disparate treatment —
where an offeror pays different prices to
different shareholders at the same time or
acquires shares during the offer period at
prices above the offer price.
6.5.3.2.4. That mischief does not arise here because
there is no simultaneous implementation of
the two pathways, nor even partial
implementation of both pathways. The
Standby Offer pathway (as a fallback
mechanism) is entirely dependent on the
prior failure of the Scheme pathway:
6.5.3.2.4.1. Had the Scheme succeeded,
only the Scheme would have
been implemented, and all
participating shareholders
would have received R118.80;
6.5.3.2.4.2. Because the Scheme failed,
only the Standby Offer is being
implemented, and all
participating shareholders
must receive R120.00;
6.5.3.2.4.3. At no point are different
shareholders receiving
different prices at the same
time for the same underlying
transaction.
6.5.3.2.5. The pricing differential does not violate the
equality principles underlying Regulation
111 because all shareholders within each
implementation pathway receive identical
treatment (complete equality within each
mechanism), the pathways are mutually
exclusive sequential alternatives, only one of
which becomes operative, and there is no
contemporaneous discrimination.
6.5.4. Third, Bowmans has not identified any provision in the Act or
Regulations that expressly prohibits different pricing between
sequential implementation mechanisms of a single composite offer
where the difference does not violate Regulation 104, the
definitional requirements are satisfied, all shareholders within each
mechanism receive equal treatment, and the mechanisms operate
sequentially rather than simultaneously.
6.5.5. Fourth, Bowmans' position creates a logical inconsistency with its
own "single offer" argument. If the Scheme and Standby are truly
parts of a single offer (as Bowmans contends), then shareholders
in the "single offer" receive different total values regardless:
6.5.5.1. Scheme participants would have received R120.00 total
value (R118.80 Scheme Consideration + R1.20 dividend
received on 24 June 2025);
6.5.5.2. Standby participants receive R121.20 total value
(R120.00 Standby Consideration + R1.20 dividend);
6.5.5.3. The R1.20 total value differential exists whether or not
one accepts Bowmans' interpretation;
6.5.5.4. Bowmans' argument about "price uniformity" is therefore
internally inconsistent—there is no total value uniformity
under either interpretation.
6.5.6. The Panel, therefore, rejects Bowmans' "two offers at different
prices" argument. The correct analysis is:
6.5.6.1. This is one offer with sequential implementation
alternatives;
6.5.6.2. Different pricing between sequential mechanisms is
permissible provided regulatory requirements are met;
6.5.6.3. All regulatory requirements are met at R120.00
(definitional compliance, Regulation 104 compliance,
Regulation 111 compliance, equal treatment within each
mechanism — noting that only one mechanism becomes
operative based on the sequential structure.
6.6. Commercial and Regulatory Logic
6.6.1. The pricing structure reflected in the Circular is commercially
rational and fully compliant with the Regulations. Examining total
shareholder value under each potential pathway:
Total Shareholder Value:
6.6.1.1. Had Scheme succeeded post-dividend: R118.80
(Scheme Consideration) + R1.20 (dividend received) =
R120.00 total value
6.6.1.2. Under Standby Offer post-dividend: R120.00 (Standby
Offer Consideration) + R1.20 (dividend received) =
R121.20 total value
6.6.2. The R1.20 differential in total value between the two pathways may
represent any or all of the following commercially rational
considerations:
6.6.2.1. A deliberate incentive structure designed to facilitate
acceptance of the Standby Offer following Scheme
failure;
6.6.2.2. Compensation to shareholders for the uncertainty, delay,
and inconvenience associated with the Scheme failing
and the alternative Standby mechanism being triggered.
6.6.3. Crucially, Regulation 104 explicitly permits upward price variations
whilst prohibiting downward revisions. Interpreting the Standby
Offer price as R120.00 (which exceeds the adjusted Scheme price
of R118.80) is entirely consistent with, and permitted by, Regulation
104's framework.
6.6.4. Conversely, forcing a reduction from the explicitly stated R120.00 in
paragraph 7.3 down to R118.80 would constitute a prohibited
downward revision of a price that was explicitly communicated to
shareholders in the approved Circular. This would violate
Regulation 104.
6.6.5. Shareholders may have made strategic decisions based on the total
value calculation. Shareholders who received the R1.20 dividend
might have rationally calculated that their total return would be
higher under the Standby Offer (R121.20) than under the Scheme
(R120.00). Retrospectively reducing the Standby Offer price to
R118.80 would defeat these reasonable, economically rational
expectations formed on the basis of the explicit terms of the
Circular.
6.7. The "No-Increase Statement"
Newco's reliance on the no-increase statement is misplaced. A "no-increase
statement" under Regulation 104(6) prevents an offeror from increasing the
offer consideration. Paying a price of R120.00, which was explicitly provided
for in the Circular as the consideration for the Standby Offer from the date
of its issue, does not constitute an "increase" in the regulatory context
established by Regulation 104. It is the fulfilment of a pre-existing, explicitly
stated term of the Offer.
6.8. Press Releases and Subsequent Announcements
Subsequent press releases and finalisation announcements cannot
unilaterally amend the binding terms of the Panel-approved Circular. The
Circular is the foundational contractual document governing the Offer.
Where there is a conflict between the Circular and subsequent
announcements, the Circular must prevail.
7. Conclusion and Ruling
7.1. Based on the analysis above, applying the established principles of
contractual interpretation and the Panel's statutory mandate:
7.1.1. the specific provision in paragraph 7.3 of the Circular, which
explicitly states the Per Share Standby Offer Consideration is
R120.00, is clear and unambiguous.
7.1.2. this specific provision prevails over any general interpretation of the
Offer as a "single composite offer" or the general definitional floor
of "no less than" the Scheme price.
7.1.3. to the extent any ambiguity exists, the contra proferentem rule
requires that it be resolved in favour of the shareholders and against
Newco, the drafter.
7.1.4. the payment of R120.00 is consistent with the terms of the Offer as
set out in the Circular and does not contravene the no-increase
statement made under Regulation 104.
7.2. Accordingly, the Panel rules that the correct consideration payable to
Barloworld shareholders who have accepted the Standby Offer is R120.00
per share.
7.3. Newco is hereby directed to:
7.3.1. Pay R120.00 per share to all shareholders who accept the Standby
Offer after the date of this ruling, in accordance with paragraph 7.3
of the Circular;
7.3.2. Within 10 business days of this ruling, pay the R1.20 per share
shortfall to any shareholders who have already accepted the
Standby Offer and received payment of R118.80 per share,
provided that if an application for review is lodged with the Takeover
Special Committee pursuant to Regulation 118(8) within 5 business
days of this ruling, the obligation under this sub-paragraph shall be
suspended until the TSC's determination, whereafter payment must
be made within 5 business days of the TSC's decision if this ruling
is upheld (whether in whole or in the relevant part concerning the
R120.00 consideration);
7.3.3. Within 48 hours of this ruling (or as soon as reasonably
practical thereafter, bearing in mind standard market rules for
publication of announcements), retract and correct any
finalisation announcements or SENS announcements that
state the Standby Offer Consideration is R118.80, and issue a
corrective announcement on SENS confirming the Standby
Offer Consideration is R120.00 per share.
7.4. This ruling is given only in respect of the takeover provisions. Further,
in issuing this ruling, the Panel did not consider the commercial
advantages or disadvantages of the transaction in accordance with
section 201(3) of the Act.
7.5. Your attention is also drawn to Regulation 118(5) stating that all
rulings of the Panel will be given on the assumption that all
information provided is correct and complete. Further, your attention is
drawn to Regulation 118(8) stating:
"Any person issued with a Ruling of the Panel may apply to the
Takeover Special Committee for a hearing regarding the ruling within –
(a) 5 business days after receiving that Ruling; or
(b) Such longer period as may be allowed by the Committee
on good cause shown."
Issued on 04 October 2025 by the Deputy Executive Director of the
Takeover Regulation Panel, in terms of section 200(3) of the Act.
Mr Zano Nduli
Deputy Executive Director
Date: 06-10-2025 08:51:00
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