Wrap Text
Delisting and offer by Redefine to acquire EPP shares and withdrawal of cautionary
EPP N.V.
(previously Echo Polska Properties N.V.)
(Incorporated in The Netherlands)
Official seat (statutaire zetel) in Amsterdam, The Netherlands
(Company number 64965945)
JSE share code: EPP
ISIN: NL0011983374
LEI Code: 7245003P7O9N5BN8C098
("EPP")
This announcement is not for publication or distribution, directly or indirectly, in or into the United States or to any
U.S. person (as defined in Regulation S under the U.S. Securities Act). The distribution of this announcement may
be restricted by law in certain jurisdictions and persons into whose possession any document or other information
referred to herein comes, should inform themselves about and observe any such restriction. Any failure to comply
with these restrictions may constitute a violation of the securities laws of any such jurisdiction.
This announcement shall not constitute an offer to sell or the solicitation of an offer to buy securities, nor shall there
be any sale of the securities described herein, in any jurisdiction, in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of such jurisdiction or without an exemption
from the registration or qualification requirements under the securities laws of such jurisdiction.
With respect to any Member State of the European Economic Area or the United Kingdom (each a "Relevant
State"), no action has been undertaken or will be undertaken to make an offer to the public of securities requiring
publication of a prospectus in any Relevant State. As a result, securities may only be offered in Relevant States: (i)
to any legal entity which is a "qualified investor" as defined in Regulation (EU) 2017/1129 of the European
Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the
public or admitted to trading on a regulated market (the "Prospectus Regulation"); or (ii) in any other circumstances
falling within Article 1(4) of the Prospectus Regulation; provided that no such offer of securities shall result in a
requirement for the publication of a prospectus pursuant to Article 3 of the Prospectus Regulation and each person
who initially acquires securities or to whom any offer is made will be deemed to have represented, warranted and
agreed that it is a "qualified investor" within the meaning of the Prospectus Regulation. For these purposes, the
expression "Prospectus Regulation" includes Regulation (EU) 2017/1129 as it forms part of United Kingdom
domestic law by virtue of the EUWA.
This announcement contains information as defined in Article 7(1) of Regulation (EU) 596/2014 of 16 April 2014 (the
Market Abuse Regulation).
DELISTING AND OFFER BY REDEFINE TO ACQUIRE EPP SHARES AND WITHDRAWAL OF CAUTIONARY
1. Introduction
Shareholders are advised that in order to facilitate a restructuring aimed at bolstering its balance sheet and
significantly reducing the extent of its gearing, the EPP board of directors (the "EPP board") has resolved that,
subject to the fulfilment of relevant conditions, it would be in the best interests of EPP to seek a delisting of EPP
shares from both the Johannesburg Stock Exchange (the "JSE") and the Luxembourg Stock Exchange ("LuxSE")
(the "delisting").
To facilitate the delisting Redefine Properties Limited ("Redefine") will, subject to conditions, offer to acquire all
EPP shares that it does not already own (other than those held by I Group Consolidated Holdings Proprietary Limited
and its subsidiaries (collectively "I Group")) in exchange for Redefine shares at a swap ratio of 2.70 Redefine shares
per EPP share acquired (the "Redefine offer"). EPP shareholders who do not wish or are unable to accept the
Redefine offer will be entitled to retain their direct investment in EPP, albeit in an unlisted environment. Redefine
shares are listed on the JSE.
EPP shareholders who do not or are unable to accept the Redefine offer are cautioned as to the lack of share
liquidity in an unlisted environment and that whilst Redefine has expressed its intention to acquire all EPP
shares not already owned by it, post expiry of the Redefine offer, there is no certainty that Redefine will be a
buyer of additional EPP shares or the terms on which Redefine may agree to acquire additional EPP shares.
EPP shareholders resident outside South-Africa, and in particular those resident in the United States, the
United Kingdom, any member state of the European Economic Area (such as Poland, the Netherlands and
Luxembourg), Australia, Canada or Japan, are not able to accept the Redefine offer, except in certain limited
circumstances in accordance with applicable laws and regulations. If an EPP shareholder is not able to accept
the Redefine offer and does not wish to retain unlisted EPP shares, he or she should dispose of the EPP shares
held prior to the last day to trade for purposes of participating in the Redefine offer (expected to be on or
about Tuesday, 15 February 2022).
In regard to any retail investor who for legal or regulatory reasons cannot accept the Redefine offer, Redefine will
undertake to use its best endeavours to, during a 45-day period following completion of the EPP shares, facilitate, to
the extent reasonably practicable, an off-market purchase from any such affected retail investor at the same swap
ratio and also otherwise on the same conditions as the Redefine offer, all subject to applicable rules and legislation
(including but not limited to applicable securities laws) of the relevant jurisdictions. Retail investors are advised that
there is no guarantee that Redefine is indeed able to facilitate such post-delisting purchase in their relevant
jurisdiction.
The Redefine offer will be made as part of a series of integrated, inter-conditional transactions to give effect to the
delisting and an internal reorganisation of EPP (to be effected after the delisting is completed), whereby EPP will
conclude two joint venture transactions with third party investors, which transactions entail a significant aggregate
gross cash injection of c. €191 million into EPP from two third party investors into two separate joint venture
companies (the "JV transactions"), as more fully described in paragraph 6 below.
Post the delisting and implementation of the JV transactions:
- Redefine will own all of the EPP shares in issue save to the extent that EPP shareholders do not accept the
Redefine offer and continue to hold EPP shares;
- EPP will have a loan to value ("LTV") of 37.4% (compared to an LTV of c. 55.6% as at 30 June 2021) and
will own:
- eight direct properties comprising six prime retail properties (including its 70% interest in Galeria
Mlociny) and two Power Parks, valued at €1.35 billion;
- a 30% interest in Henderson Park which owns three office properties with GLA totalling 86 000 m²;
- a 53.74% interest in Towarowa 22, a development property in the centre of Warsaw, with a total area of
about 6.5 ha and development capacity of over 210 000 m2 gross lettable area, earmarked for disposal;
- a 51.2% interest in EPP Community Properties (as defined in paragraph 5 below), a joint venture which
will own 12 community retail and three office properties valued at €640.3 million and which will have
an LTV of 58.1%; and
- a 50% interest in M1 Holdco (as defined in paragraph 5 below), a joint venture which will own 11
shopping centres valued at €739.1 million and which will have an LTV of 53.1%.
2. Rationale
Since EPP’s listing in 2016, EPP has been unable to achieve meaningful liquidity in its shares or maintain an
investment rating comparable to what was achieved at listing (whereby its shares traded at a price at or above the
underlying net asset value ("NAV") per share). EPP remains relatively highly geared and has various short and
medium term liquidity requirements related to refinancing or repayment of debt maturing in 2022 that need to be
met. Given the deep discount at which its shares trade to NAV and highly constrained liquidity in the Polish property
market, particularly post the onset of the Covid-19 pandemic, the proposed delisting and related transactions present
an accelerated and effective solution to EPP’s balance sheet challenges.
Accessing affordable equity capital on an efficient basis was one of the central motivations for EPP seeking a listing
on the JSE and LuxSE. However, the nature and dynamic of equity capital markets, particularly in South Africa, has
changed significantly since 2016. The listed equity market no longer presents EPP with a viable or conducive market
on which to raise significant equity capital. Issuing shares at a deep discount to its NAV (as dictated by the listed
equity market) would result in significant value destruction for EPP shareholders. Accordingly, EPP is effectively
precluded from raising cash to (i) fund acquisitive growth or (ii) repay debt by issuing shares, given the depressed
price of its equity and the dilutive consequences of a capital raise for EPP shareholders.
As at 30 June 2021, EPP had total bank borrowings of c. €1.44 billion and an LTV of c. 55.6%. In addition, EPP
faces significant loan maturities with €879 million maturing by 31 December 2022 (including an unsecured corporate
facility of €250 million which matures on 31 October 2022) and €369 million maturing during 2023. So far, EPP’s
endeavours over an extended period to implement asset disposals to assist with refinancing or repayment of maturing
debts (particularly post the onset of the Covid-19 pandemic and its impact on the Polish property sector) have not
yielded the desired results. Given its existing high LTV, it would be challenging for EPP to raise new or substitute
corporate debt and, absent a reorganisation and introduction of third party equity as contemplated in terms of the
delisting and related transactions, EPP would also likely need to extend the current moratorium on paying any
distributions for an extended period and/or seek to raise significant equity capital which, even if commercially
feasible, would likely be highly value destructive to existing EPP shareholders, especially those shareholders that
may be unable to participate in an equity raise. Given the size of the equity injection which would be required in
terms of any EPP capital raise, such a capital raise would carry high execution risk.
EPP has also not been able to achieve meaningful liquidity in its shares post listing, which has contributed to the
challenge of attracting a broader universe of institutional investors and an improved investment rating. A significant
contributing factor to EPP’s low level of liquidity is Redefine’s holding (in excess of 45%) in EPP and the fact that
EPP’s shareholder of reference is also listed on the JSE, affording the market two points of entry to EPP on the JSE,
and thus diverting a degree of liquidity away from EPP shares.
This combination of factors and continued uncertainty regarding the likelihood and degree of any global economic
recovery culminated in the EPP board (i) resolving to retain cash (which would ordinarily have been paid to EPP
shareholders as a dividend) from 2020 and (ii) considering other reorganisation initiatives in order to mitigate
potential balance sheet risk. EPP is not currently in a position to deliver income to its shareholders in the form of
dividends and capital market dynamics restrict EPP’s ability to remedy this position in the short term.
When considering the factors detailed above as well as the costs and significant draw on management capacity
associated with EPP’s dual-listed structure, the EPP Board has concluded that EPP is not able to realise any of the
material benefits of its listing, particularly recognising that EPP’s listings do not present a commercially realistic
capital raising platform for EPP.
Implementation of the delisting and related transactions will better position EPP to return to being a property income
fund paying regular distributions to shareholders and, longer term, pursue its growth objectives, whilst
simultaneously affording investors the ability to retain exposure to EPP either directly via continuing to own EPP
shares (albeit in unlisted form) or indirectly via Redefine with its post transaction property portfolio comprising
c. 30% Polish properties. Shareholders who do not wish to retain exposure to EPP via Redefine will obtain an
enhanced ability to monetise their investment, as Redefine’s shares are highly liquid especially compared to those of
EPP. The repositioned EPP will retain direct property holdings in respect of its six prime retail assets plus two Power
Parks, with the remainder of its property interests being held through its equity exposure to joint ventures, including
the newly established joint ventures that will be jointly controlled by EPP and which portfolios will continue to be
managed by EPP in terms of market related property and asset management arrangements.
The implementation of the JV transactions accordingly provides an accelerated and effective solution to EPP’s
balance sheet challenges. Should the proposed series of transactions not be implemented, EPP will continue with its
previously communicated strategy of asset disposals aimed at ensuring that EPP meets all debt servicing
commitments and reduces its LTV. Whilst management remain confident of achieving meaningful asset disposals
during 2022, the success and timing of such disposal process remains subject to the vagaries of market conditions
and related execution risks which management is only partially able to control. If such disposals are successfully
implemented during 2022, EPP would expect to return to a dividend paying position during 2023.
3. Details of the Redefine offer
The material terms of the Redefine offer are as follows.
3.1. Redefine offer consideration
The Redefine offer will be made for a share consideration of 2.70 Redefine shares for every EPP share acquired
(the "Redefine offer consideration"). EPP shareholders that accept the Redefine offer will acquire their
Redefine consideration shares after the last date to trade to participate in the Redefine dividend of 60.12 cents
per Redefine share announced by Redefine in respect of its year ended 31 August 2021 (which dividend is to
be paid by Redefine on 6 December 2021) but such Redefine consideration shares will rank for Redefine
dividends for future periods.
The value per EPP share implied by the Redefine offer consideration is set out below. The values are based on
closing prices of EPP shares and Redefine shares on the JSE on Friday, 5 November 2021, being the business
day prior to release of the cautionary announcement, and Friday, 26 November 2021, being the business day
prior to the release of this announcement.
Value per EPP
Value per EPP share implied
share implied by Redefine
by Redefine Redefine clean clean share
EPP share Redefine share share price share price price
ZAR price price Note 1 Note 2 Note 3
5 November 2021
Closing 11.90 4.79 12.93
7-day VWAP 11.91 4.65 12.56
26 November 2021
Closing 12.00 4.80 12.96 4.21 11.35
7-day VWAP 13.00 4.94 13.35 4.35 11.75
1. Redefine share price multiplied by the swap ratio of 2.70 Redefine shares per EPP share.
2. Redefine share price reduced by estimated portion of dividend accrued in share price, based on a dividend of 60.12 cents per
Redefine share with a Last Date to Trade to participate in the Redefine dividend of 30 November 2021 and a 366 day accrual
cycle. The Redefine clean share price was calculated for trading days post 5 November 2021 only once Redefine had released
its further trading statement with details on the dividend.
3. Redefine clean share price multiplied by the swap ratio of 2.70 Redefine shares per EPP share.
3.2. Remaining EPP shares
Upon implementation of the delisting, those EPP shareholders who do not accept the Redefine offer will remain
the holders of unlisted EPP shares.
Prior to listing on the JSE in 2016, EPP obtained approval from the SARB for the listing of its ordinary shares
on the Main Board of the JSE, which listing is classified as an "inward listing" in terms of the Exchange
Control Regulations. All inward listed shares on the JSE, traded and settled in Rand, are classified as domestic
assets for purposes of Exchange Control. South African resident EPP shareholders who wish to continue
to hold unlisted EPP shares should note that following EPP’s delisting, the unlisted EPP shares will
constitute a foreign asset for Exchange Control purposes. EPP shareholders that do not wish or are
unable to accept the Redefine offer should establish whether they will be permitted to continue to hold
EPP shares post the delisting and/or whether they require any additional Exchange Control approvals
to do so, and to ensure that the requisite approvals are secured before the delisting is effected.
Shareholders who do not wish or are unable to accept the Redefine offer and instead continue to hold
unlisted EPP shares should note that upon EPP delisting from the LuxSE and JSE, all EPP shares will
be transferred to an unlisted register, maintained in South Africa. In regard to any retail investor who for
legal or regulatory reasons cannot accept the Redefine offer, Redefine undertakes to use its best commercial
endeavours to, during a 45-day period following closing of the Redefine offer, facilitate, to the extent
reasonably practicable, an off-market purchase from any such affected retail investor at the same swap ratio
and also otherwise on the same terms and conditions as the Redefine offer, all subject to applicable rules and
legislation (including but not limited to applicable securities laws) of the relevant jurisdictions. Retail investors
are advised that there is no guarantee that Redefine is indeed able to facilitate such post-delisting purchase in
their relevant jurisdiction.
Shareholders holding EPP shares on the LuxSE register are advised that the Redefine shares issued
pursuant to the Redefine offer will only be issued (and listed) on the JSE. Accordingly, any shareholder
who holds EPP shares on the LuxSE register and who wishes (and is able) to accept the Redefine offer
must prior to accepting the Redefine offer open an account with a South African CSDP or broker and
transfer his/her EPP shares into such account.
3.3. Conditions precedent to the Redefine offer
The Redefine offer remains subject to the fulfilment (or waiver, as the case may be) of the following conditions
precedent:
- the delisting being approved by the majority of EPP shareholders (excluding Redefine and I Group);
- the I Group repurchase (see paragraph 7 below) being approved by the majority of EPP shareholders
(excluding I Group);
- Redefine shareholders placing sufficient Redefine shares under the control of the Redefine board so as
to enable Redefine to make the Redefine offer;
- EPP and Redefine obtaining all requisite regulatory approvals for the implementation of the acquisition
by Redefine of EPP shares pursuant to the Redefine offer, including exchange control approval, approval
from the applicable competition authorities and approval from the JSE and LuxSE; and
- the conditions precedent to the JV transactions being fulfilled.
4. The delisting
The delisting will be implemented in accordance with the requirements of sections 1.14 and 1.15 of the JSE Listings
Requirements.
By virtue of the fact that Redefine holds c. 45.44% of EPP shares in issue, it is considered a controlling shareholder
of EPP in terms of the JSE Listings Requirements. In addition, the JSE regards I Group as acting in concert with
Redefine in respect of the delisting. Accordingly, in terms of section 1.16 of the JSE Listings Requirements, any
votes cast by Redefine and I Group on the delisting resolution will not be taken into consideration when determining
whether the delisting resolution is approved by the requisite majority of EPP shareholders at the extraordinary general
meeting in respect of the delisting and related transactions (the "EGM").
The delisting is subject to the fulfilment of the following conditions:
- the delisting resolution being approved by the majority of EPP shareholders (excluding Redefine and I Group);
- EPP obtaining all requisite regulatory approvals to give effect to the delisting, including the approval of the
JSE, LuxSE, the relevant competition authorities and the SARB; and
- the Redefine offer being implemented.
5. Ability to proceed with the Redefine offer
Assuming the Redefine offer is accepted by all EPP shareholders (excluding Redefine and I Group), a total of
1 135 037 043 Redefine shares (representing c. 20.89% of Redefine shares in issue at the last practicable date) would
be issued pursuant to the Redefine offer.
A general meeting of Redefine shareholders will be convened in January 2022 in order for Redefine shareholders to
authorise the placement of sufficient Redefine shares under the control of the Redefine board for purposes of making
the Redefine offer.
6. JV transactions
After the Redefine offer has become unconditional and the delisting has been implemented, and following the
reconstitution of the EPP board, the reconstituted EPP board will be requested to approve the conclusion by EPP of
two joint venture transactions involving, inter alia:
- a transfer by EPP of 12 community retail and three office properties to a newly incorporated EPP subsidiary
into which I Group will invest ("EPP Community Properties") by (i) swapping its EPP shares for shares in
EPP Community Properties (pursuant to the implementation of a specific repurchase in terms of section 5.69
of the JSE Listings Requirements by EPP (the "I Group repurchase")) and (ii) acquiring additional EPP
Community Properties shares from EPP for c. €50 million in cash (collectively, the "EPP Community
Properties JV transaction"); and
- a transfer of the M1 portfolio (comprising ten retail properties currently owned by EPP and M1 Marki (which
will be owned by Redefine prior to the implementation of the transaction)) to a newly incorporated EPP
subsidiary ("M1 Holdco") and the subsequent sale of 50% of the equity and shareholder loans (if any) in M1
Holdco to funds managed by Pacific Investment Management Company LLC ("PIMCO Funds") (the "M1 Holdco JV
transaction").
EPP will jointly control both M1 Holdco and EPP Community Properties and will render property and asset
management services to both.
The preparation of the agreements required to give effect to the JV transactions are well advanced and will be finalised
prior to the issue of the circular to EPP shareholders in regard to the Redefine offer, the delisting and related
transactions.
PIMCO Funds and I Group have advised that their participation in the JV transactions is contingent on them being
able to deploy reserved capital by March 2022, and that if their timetable requirements cannot be met, that they are
likely to deploy available capital towards other investment opportunities. This has been a material factor in informing
the transaction timetable and process.
7. The I Group repurchase
The implementation of the Redefine offer and the delisting will result in EPP being constituted as a controlled
subsidiary of Redefine. In terms of the framework investment agreement to be executed between Redefine and I
Group, on and subject to Redefine acquiring such control of EPP, Redefine shall procure that EPP concludes all
agreements necessary to give effect to the I Group repurchase and the EPP Community Properties JV transaction.
In terms of the I Group repurchase, the 74 993 917 EPP shares currently held by I Group (the "I Group shares")
will be acquired (and shares in EPP Community Properties issued) by way of an off-market transaction at a swap
ratio based on the relative NAVs of EPP and EPP Community Properties.
The EPP Community Properties consideration shares issued pursuant to the I Group repurchase will on issue represent
c. 24.1% of EPP Community Properties shares in issue after the implementation of the I Group repurchase.
The I Group repurchase constitutes a specific repurchase in terms of paragraph 5.69 of the JSE Listings Requirements.
Whilst the I Group repurchase will be voted on by EPP shareholders prior to the delisting, it will remain subject to
the fulfilment of the conditions precedent set out below and will only be implemented after the delisting. The I Group
shares do not form part of the Redefine offer shares and I Group does not constitute a participant in the Redefine
offer in respect of the I Group shares.
The I Group repurchase will be subject to the fulfilment or waiver, as the case may be, of the following conditions
precedent:
- the Redefine offer having been implemented;
- the delisting having been implemented;
- EPP obtaining all requisite legal and regulatory approvals required to implement the I Group repurchase,
including shareholder approval; and
- the remaining conditions to the JV transactions having been fulfilled.
8. Financial effects
Set out below are the financial effects of EPP reflecting the adjustments to EPP as a result of the delisting and related
transactions ("EPP pro forma") and further EPP disposals ("EPP adjusted financial effects").
EPP
Before the adjusted
proposed EPP pro financial %
transaction forma effects change
Note 1 Note 2 % change Note 3 (cumulative)
Financial effects of EPP
NAV per share (EUR) 1.02 0.94 (8.0%) 0.96 (6.2%)
TNAV excluding deferred tax per
share (EUR) 1.12 1.01 (10.2%) 1.03 (8.5%)
LTV 55.6% 37.4% 34.2%
Distributable earnings per share
(EUR cents) 3.66 2.84 (22.4%) 3.01 (17.7%)
Distributable earnings per share
annualised (EUR cents) Note 4 7.32 5.68 (22.4%) 6.02 (17.7%)
Earnings per share (EUR cents) 1.00 (7.49) (848.6%)
Headline earnings per share (EUR
cents) 0.90 (0.06) (106.4%)
Notes and assumptions:
1. NAV per share, TNAV excluding deferred tax per share and LTV are at 30 June 2021 (extracted, without adjustment, from EPP's unaudited
results for the six months ended 30 June 2021). Distributable earnings per share are for the 6 months ended 30 June 2021 (extracted, without
adjustment, from EPP's unaudited results for the six months ended 30 June 2021).
2. EPP pro forma reflecting the adjustments as a result of the delisting and related transactions on EPP comprising the I Group repurchase,
the EPP Community Properties JV transaction and M1 Holdco JV transaction including:
a. The I Group repurchase whereby I Group sells the I Group shares (being 74 993 917 EPP shares) to EPP for the issuance of the
EPP Community Properties consideration shares amounting to 24.1% of the EPP Community Properties shares in issue.
b. In terms of the EPP Community Properties share sale, I Group purchases from EPP additional EPP Community Properties shares
for cash at an acquisition price of EUR50 million. EPP recognises a loss on disposal of EUR28.60 million. I Group’s consideration
shares amount to an additional 24.7% of EPP Community Properties shares in issue. Post implementation of the EPP Community
Properties share sale, I Group holds 48.8% of the EPP Community Properties shares in issue.
c. PIMCO Funds acquires 50% of the shares and shareholder loans in M1 Holdco, including 50% of the acquisition of M1 Marki, for
a cash purchase consideration of c. EUR109 million, resulting in a loss on disposal of EUR33.56 million.
d. Transaction costs amount to R6.04 million and are expensed.
e. It is assumed that net cash proceeds after transaction costs are applied to reduce debt incurring interest at 4.5% per annum.
3. EPP adjusted financial effects reflecting EPP pro forma adjusted for the assumed disposal by EPP of Towarowa 22 and Power Park Opole.
EPP adjusted financial effects are not pro forma financial effects and are provided for illustrative purposes only.
4. Distributable earnings per share annualised are distributable earnings per share for the 6 months ended 30 June 2021 annualised to a full
year. Distributable earnings per share annualised are not pro forma financial effects and are provided for illustrative purposes only.
Set out below are the financial effects of Redefine reflecting the adjustments to Redefine as a result of the delisting
and related transactions ("Redefine pro forma") and further EPP disposals ("Redefine adjusted financial effects").
Redefine
Before the adjusted
proposed Redefine pro financial %
transaction forma effects change
Note 5 Note 6 % change Note 7 (cumulative)
Financial effects of Redefine
NAV per share (ZAR) 7.22 7.04 (2.5%) 7.08 (1.9%)
TNAV excluding deferred tax per
share (ZAR) 7.33 7.28 (0.8%) 7.32 (0.2%)
LTV 41.6% 43.3% 42.4%
Distributable earnings per share
(ZAR cents) 26.78 28.37 5.9% 28.75 7.3%
Distributable earnings per share
annualised (ZAR cents) Note 8 53.57 56.74 5.9% 57.49 7.3%
Notes and assumptions:
5. NAV per share, TNAV excluding deferred tax per share and LTV are at 31 August 2021 (extracted, without adjustment, from Redefine's
audited results for the year ended 31 August 2021). Distributable earnings per share are for the 6 months ended 31 August 2021 (extracted,
without adjustment, from Redefine's audited results for the year ended 31 August 2021 reduced by distributable earnings per share for the
6 months ended 28 February 2021.
6. Redefine pro forma reflecting the adjustments as a result of the Redefine offer assuming EPP had implemented the transactions reflected
in EPP pro forma. It is assumed that all EPP shareholders (excluding Redefine and I Group) accept the Redefine offer and Redefine issues
1 135 037 043 consideration shares (420 384 090 EPP shares multiplied by the swap ratio of 2.70 Redefine shares per EPP share).
Accordingly, Redefine consolidates EPP’s results as summarised in EPP pro forma which are translated at the ZAR/EUR exchange rate
on 31 August 2021 of ZAR17.27:EUR1.00.
7. Redefine adjusted financial effects reflecting the adjustments as a result of the Redefine offer assuming EPP had implemented the
transactions reflected in EPP adjusted financial effects. It is assumed that all EPP shareholders (excluding Redefine and I Group) accept
the Redefine offer and Redefine issues 1 135 037 043 consideration shares (420 384 090 EPP shares multiplied by the swap ratio of 2.70
Redefine shares per EPP share). Accordingly, Redefine consolidates EPP’s results as summarised in EPP adjusted financial effects which
are translated at the ZAR/EUR exchange rate on 31 August 2021 of ZAR17.27:EUR1.00. Redefine adjusted financial effects are not pro
forma financial effects and are provided for illustrative purposes only.
8. Distributable earnings per share annualised are distributable earnings per share for the 6 months ended 31 August 2021 annualised to a full
year. Distributable earnings per share annualised are not pro forma financial effects and are provided for illustrative purposes only
Set out below are the financial effects of EPP shareholders accepting the Redefine offer reflecting the adjustments to
Redefine as a result of the delisting and related transactions ("EPP shareholder accepting the Redefine offer pro
forma") and further EPP disposals ("EPP shareholder accepting the Redefine offer adjusted financial effects"),
which compares 1 EPP share before the proposed transaction as set out in the financial effects of EPP to 2.70 Redefine
shares as adjusted for the proposed transaction and set out in the financial effects of Redefine.
EPP
shareholder
EPP accepting the
shareholder Redefine
accepting the offer
Before the Redefine adjusted
proposed offer pro financial %
transaction forma effects change
Note 9 Note 10 % change Note 11 (cumulative)
Financial effects of EPP
shareholders accepting the
Redefine offer
NAV per share (ZAR) 17.68 19.00 7.5% 19.11 8.1%
TNAV excluding deferred tax per
share (ZAR) 19.38 19.64 1.4% 19.75 1.9%
LTV 55.6% 43.3% 42.4%
Distributable earnings per share
(ZAR cents) 63.18 76.60 21.2% 77.62 22.8%
Distributable earnings per share
annualised (ZAR cents) Note 4 126.37 153.19 21.2% 155.23 22.8%
Notes and assumptions:
9. Amounts set out in the "Before the proposed transaction" column of the financial effects of EPP, translated at the ZAR/EUR exchange rate
on 31 August 2021 of ZAR17.27:EUR1.00.
10. Redefine pro forma as set out in the financial effects of Redefine multiplied by the swap ratio of 2.70 Redefine shares per EPP share.
11. Redefine adjusted financial effects as set out in the financial effects of Redefine multiplied by the swap ratio of 2.70 Redefine shares per
EPP share. Redefine adjusted financial effects are not pro forma financial effects and are provided for illustrative purposes only.
The financial effects have been prepared for illustrative purposes only, to provide information on how the delisting
and related transactions and further EPP disposals may have affected the financial position and financial performance
of EPP and EPP shareholders accepting the Redefine offer, assuming the delisting and related transactions and further
EPP disposals had been implemented at period-end for statement of financial position purposes and implemented at
the beginning of the period for statement of profit or loss and other comprehensive income purposes.
Due to their nature, the financial effects may not fairly represent EPP’s or an EPP shareholder’s financial position,
financial performance or cash flows after the delisting and related transactions and further EPP disposals. The
financial effects, including the assumptions on which they are based and the financial information from which they
have been prepared, are the responsibility of the board of directors of EPP. The financial effects have been prepared
in accordance with the JSE Listings Requirements, the Guide on Pro forma Financial Information issued by the South
African Institute of Chartered Accountants and EPP’s accounting policies that are in compliance with IFRS and that
are consistent with those applied in the audited consolidated results of EPP for the 12 months ended 31 December 2020.
The financial effects have not been reviewed or reported on by independent reporting accountants.
9. Establishment of the independent committee, appointment of independent expert and advisor and Board recommendations
An independent sub-committee of the EPP board, comprising Robert Weisz, Dionne Ellerine, Sandra van Loon and
Taco de Groot (the "independent committee") has been appointed to advise the EPP board in respect of the Redefine
offer.
EPP appointed Deloitte & Touche (the "independent expert") as the independent expert to provide an opinion
regarding the Redefine offer, and to make appropriate recommendations to the independent committee in the form
of a fairness opinion in respect of the Redefine offer in accordance with the JSE Listings Requirements.
At the instance of the independent committee, an investment bank was also appointed to review the independent
expert’s opinion and to further assist the independent board in assessing the fairness of the Redefine offer.
The independent expert has submitted its preliminary report to the independent committee and concluded that the
Redefine offer is fair in so far as EPP shareholders are concerned.
The independent expert’s full report, as well as the independent committee’s opinion on the Redefine offer will be
included in the circular to be issued to EPP shareholders in respect of the Redefine offer.
The EPP board, upon unanimous advice from the independent committee, has expressed its intention to (subject to,
inter alia, the independent expert’s final opinion confirming the fairness of the Redefine offer and the relevant
transaction documentation having been agreed) (i) unanimously recommend that the proposed delisting and related
Redefine offer is in the best interests of EPP and its shareholders and (ii) unanimously recommend that shareholders
approve all resolutions to be put to shareholders at the EGM required to facilitate the implementation of the delisting
and related transaction.
The proposed transaction enjoys the support of EPP’s management.
10. Circular posting date
Subject to the execution of all agreements required to be executed in order to facilitate the transactions contemplated
in this announcement, it is anticipated that on or about 17 December 2021, EPP will issue a circular to EPP
shareholders setting out the full terms and conditions of the Redefine offer, the delisting and related transactions. It
is further anticipated that the EGM will be held on or about 17 January 2022 to approve, inter alia, the delisting and
that EPP will delist from the JSE and LuxSE on or about 22 February 2022. For the purposes of procuring the
delisting from the LuxSE, a formal application will be made as soon as practically possible after the EGM, to the
LuxSE in terms of paragraph 804 of the LuxSE Rules and Regulations. EPP shareholders will be advised of the
posting of the circular and detailed transaction timetable by means of an announcement released on SENS and the
LuxSE, subject to applicable law.
11. Withdrawal of cautionary
EPP shareholders are referred to the cautionary announcement released on SENS and the LuxSE on
8 November 2021, and are advised that as the result of the publication of this announcement, the cautionary is hereby
withdrawn and shareholders are no longer required to exercise caution when dealing in their EPP shares.
29 November 2021
JSE Sponsor and corporate advisor
Java Capital
Luxembourg Stock Exchange Listing Agent
Harneys Luxembourg
Dutch legal advisors to EPP
LOYENS & LOEFF N.V.
For more information:
Curwin Rittles, Investor Relations, EPP
Mobile: +48 885 982 310
Curwin.rittles@epp-poland.com
Java Capital, JSE Sponsor
Phone: +27 11 722 3050
Harneys Luxembourg, Luxembourg Stock Exchange Listing Agent
Phone: +352 27 86 71 02
Singular Systems IR
Michèle Mackey
+27 (0)10 003 0700
michele@singular.co.za
Date: 29-11-2021 09:00:00
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