Wrap Text
Disposal of Labat Healthcare Assets
LABAT AFRICA LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1986/001616/06)
("Labat Africa" or "the Company")
ISIN Code: ZAE000018354 Share Code: LAB
FSE Code: LEI 9845000R73DF5EE41J88
DISPOSAL OF LABAT HEALTHCARE ASSETS
WITHDRAWAL OF PREVIOUS ANNOUNCEMENT
Shareholders are referred to the previous cautionary announcements published on SENS on 15 July
2025, 26 August 2025 and 9 October 2025, wherein the Company advised that it entered into
negotiations with All Trading Proprietary Limited ("All Trading "), a related party to the Company, for
the disposal of Labat's equity interests in some of the Company's subsidiaries, which if successfully
concluded, may have a material effect on the price of the Company's securities. Thereafter, the
Board announced on 23 October 2025 advised that the negotiations with All Trading had been
terminated and that the Company entered into a binding agreement with 64P Investments
Proprietary Limited ("64P Investments") for the purchase of all the cannabis-related subsidiaries and
operating divisions within the Labat Group. Shareholders are advised as follows 64P Investments has
since withdrawn from the agreement and the Company has re-engaged with All Trading for the
disposal of the Cannabis Assets as detailed below. The sale agreement entered into between the
Company and 64P on 20 October 2025 has subsequently been terminated by mutual consent and
is of no further force and effect. 64P is not a related party to Labat in terms of the JSE Listings
Requirements.
DISPOSAL OF LABAT HEALTHCARE SEGMENT
The Board notes that a new sale of shares and loan claims agreement ("Sale Agreement") has been
concluded between Labat Africa and All Trading Proprietary Limited for the disposal of the Labat
Healthcare Assets. The Purchaser is a company beneficially owned by two directors of Labat, namely
Mr B.G. van Rooyen and D.J. O'Neill, and is therefore classified as a related party in terms of the JSE
Listings Requirements ("together "Related Parties").
Following the withdrawal of the 64P Investments offer, the Board approved the conclusion of this new
agreement with All Trading on improved but commercially comparable terms to the prior
transaction, for a total consideration of R23,000,000 (twenty-three million rand). The Consideration
will be settled through the partial settlement of existing loan amounts due to the Related Parties.
The Disposal remains subject to the fulfilment of certain suspensive conditions, including regulatory
approvals in terms of the JSE Listings Requirements and the Companies Act, 71 of 2008.
Business of Labat Healthcare
Subsidiaries within Labat Healthcare Segment:
- CannAfrica (Retail) – retail arm providing premium cannabis products through company-owned
stores and franchisees.
- Sweetwaters (Cultivation and Extraction) – cultivation site and extraction operations in Kenton-
on-Sea, Eastern Cape.
- Biodata (Research and Development) – phase 1 & 2 clinical trials and observational studies.
- ACE (Genetics) – development and propagation of cannabis strains.
- THC (Consulting) – consulting across Africa on cannabis and hemp strategies.
- Labat Healthcare (Dormant) – dormant entity holding a bank account.
The Disposal will conclude Labat's strategic exit from cannabis and strengthen its balance sheet. The
Company will redeploy resources into ICT, logistics, and digital platforms.
Rationale for the Disposal
The regulatory and operational risks associated with medicinal cannabis and retail have proven
challenging, and the newly appointed board members do not wish to pursue cannabis investments.
Accordingly, Labat Healthcare has been deemed non-core and held for sale during FY2025. Labat
is pivoting towards technology and ICT, and the Disposal supports this strategy by divesting of non-
core assets. Recent acquisitions such as Classic International and Ahnamu provide a solid foothold
in IT hardware and software distribution across Africa.
Terms of the Disposal
The Sale Agreement was signed between Labat and the Purchaser om 14 November 2025 for a
consideration of R23 000 000, which will be discharged through set-off against Related Party
shareholder and director loans, thereby reducing Labat's liabilities. No cash proceeds will be
received.
Shares in the various subsidiaries comprising the Labat Healthcare Segment will transfer upon
fulfilment of all condition's precedent. The Closing Date of the Disposal will be the first day after all
the conditions precedent has been met, with an Effective Date of 1 June 2025.
Condition's Precedent
The Disposal is subject to the approval of shareholders by ordinary resolution, at more than 50%,
together with any required regulatory approvals. The Related Parties and their associates will be
precluded from voting on the Disposal.
Categorisation
As the disposal is to Related Parties is a related party to Labat as contemplated in paragraph 10.1(b)
of the JSE Listings Requirements. Accordingly, transaction is deemed to be a Related Party
Transaction and is therefore subject to the provisions of Section 10 of the Listings Requirements. As a
result, the transaction requires shareholder approval, excluding the votes of the Related Party and
their associates. An Independent Professional Expert has been appointed in terms of paragraph
10.4(f) of the Listings Requirements to provide an Independent Fairness Opinion on the terms of the
transaction.
Other Salient Information
The Disposal requires shareholder approval but does not require approval from the Competition
Commission or the Takeover Regulation Panel. Normal warranties have been provided, with each
party remaining responsible for its own taxation. No assets associated with the Disposal have been
pledged or ceded.
Appointment of Advisors
The Board resolved to appoint AcaciaCap Advisors Proprietary Limited as the Transaction Sponsor to
the Company for purposes of the Disposal and associated regulatory processes, and Merchantec
Capital (Pty) Ltd as the Independent Professional Expert to provide the required Fairness Opinion in
accordance with the JSE Listings Requirements. These appointments ensure full regulatory
compliance, transparency, and adherence to corporate governance best practices in executing
the transaction.
Financial Information
The total NAV of the cannabis-related assets amounts to R5 285 864, with a profit attributable to these
assets of R17 522 268 for the reporting period before any impairments on the healthcare segment.
An independent valuation from a JSE accredited expected placed the indicative valuation
between R15 million and R17 million.
Opinions and Recommendations
The Board (excluding Related Parties) considers the Disposal beneficial to shareholders, as it exits an
industry that is highly regulated and remains uncertain, it reduces liabilities and more importantly,
enables focus on the core ICT strategy.
All Trading, BG van Rooyen, DJ O'Neill and their associates will be precluded from voting on the
Disposal at the General Meeting.
CIRCULAR TO SHAREHOLDERS
Accordingly, a circular to shareholders incorporating full details of the Disposal, and a notice
convening a general meeting of shareholders to approve the requisite resolutions is being prepared
and will be distributed to shareholders.
RESPONSIBILITY STATEMENT
The board of Labat Africa takes full responsibility for the information contained in this announcement
and confirms that, to the best of its knowledge and belief, the information is true and that this
announcement does not omit anything likely to affect the importance of such information.
By order of the Board
Johannesburg
14 November 2025
Transaction Sponsor
AcaciaCap Advisors Proprietary Limited
Date: 14-11-2025 04:40:00
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