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Announcement of the Firm Intention of Mayfair Speculators Proprietary Limited to Make an Offer
RARE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Registration Number: 2002/025247/06
Share Code: RAR ISIN: ZAE000180626
("Rare" or "the Company")
ANNOUNCEMENT OF THE FIRM INTENTION OF MAYFAIR SPECULATORS
PROPRIETARY LIMITED (“THE OFFEROR”) TO MAKE AN OFFER TO
ACQUIRE ALL THE ORDINARY SHARES IN RARE, EXCLUDING THOSE
ORDINARY SHARES HELD BY THE OFFEROR, STAFRIC INVESTMENT AND
MANAGEMENT SERVICES PROPRIETARY LIMITED (“STAFRIC”) AND
DOCULATE INVESTMENTS PROPRIETARY LIMITED (“DOCULATE”), BY WAY
OF A SCHEME OF ARRANGEMENT AND WITHDRAWAL OF CAUTIONARY
ANNOUNCEMENT
1. INTRODUCTION
1.1 Shareholders are hereby notified of the Offeror’s firm
intention to make an offer to acquire all ordinary shares in
Rare, excluding those ordinary shares held by the Offeror,
Stafric and Doculate, being 5 345 825 ordinary shares (”Scheme
Shares”) for a consideration of R1.50 for every Scheme Share
(“the Offer”). The Offer will be implemented by way of a
scheme of arrangement (“the Scheme”) in terms of the Companies
Act, 2008 (as amended) (“Companies Act”).
1.2 The purpose of this announcement is to advise Rare
shareholders of the terms and conditions of the Offer.
2. RATIONALE FOR THE OFFER
2.1 Rationale for the Offeror
The continued turnaround of Rare will require more time and
capital than originally anticipated. The Offeror, Stafric and
Doculate will continue to support Rare’s business in this
process, but given the severe lack of liquidity in Rare
shares, the parties have decided to make the Offer and delist
the Company to curtail costs.
2.2 Rationale for holders of Scheme Shares
The Offeror believes that the implementation of the Scheme
will be beneficial to holders of Scheme Shares by offering
them an opportunity to receive cash for their investment in an
illiquid share of a company that has been struggling to make
profits in a very tough economic environment.
3. MECHANICS OF THE SCHEME
3.1 The Scheme will constitute an “affected transaction”
as defined in section 117(c) of the Companies Act and will be
regulated by the Companies Act, the Companies Regulations,
2011 (“Companies Regulations”) and the Takeover Regulation
Panel (“TRP”).
3.2 The Scheme will be implemented in terms of section
114 of the Companies Act and will be proposed by the Rare
board of directors (“Rare Board”) between Rare and its
shareholders other than the Offeror, Stafric and Doculate.
3.3 The Offer will be subject to the condition precedent
set out in paragraph 4.2 below (“Offer Condition”).
3.4 The Scheme will be subject to the conditions
precedent set out in paragraph 5.1 below (“Scheme
Conditions”).
4. THE OFFER
4.1 Material terms of the Offer
The Offer will be made on the basis that –
4.1.1 the Offeror will acquire all of the Scheme Shares;
4.1.2 following the implementation of the Scheme, Rare
will be delisted from the JSE Limited (“JSE”) and held by the
Offeror, Stafric and Doculate; and
4.1.3 upon implementation of the Scheme, holders of Scheme
Shares will receive the scheme consideration of R1.50 (one
rand and fifty cents) (“the Scheme Consideration”) for every 1
(one) Scheme Share disposed of in terms of the Scheme.
4.2 OFFER CONDITION
4.2.1 The posting of the scheme circular to Rare
shareholders in relation to the Scheme (“Scheme Circular”) is
subject to the fulfilment of the Offer Condition that, by no
later than 27 July 2016 all requisite approvals for the
posting of the Scheme Circular have been received from the
JSE, the TRP and, to the extent required, the Financial
Surveillance Department of the South African Reserve Bank.
4.2.2 The Offer Condition in paragraph 4.2.1. cannot be
waived.
4.2.3 The Offeror will be entitled to extend the date
for the fulfilment of the Offer Condition by up to 30 days, at
its own discretion, upon written notice to Rare, but shall not
be entitled to extend the date to a date later than the
aforesaid 30 day period without the prior written consent of
Rare.
5. THE SCHEME CONDITIONS
5.1 The Scheme will be subject to (and will become
operative on the relevant operative date upon) the fulfilment
of the following conditions precedent on or before 24 August
2016 –
5.1.1 that the Scheme be approved by the requisite
majority of Rare shareholders, as contemplated in section
115(2)(a) of the Companies Act, and, to the extent required,
by a High Court in terms of section 115(2)(c) of the Companies
Act, and, if applicable, that Rare does not treat the
aforesaid shareholder resolution as a nullity, as contemplated
in section 115(5)(b) of the Companies Act;
5.1.2 that, in relation to any objections to the Scheme
by Rare shareholders –
5.1.2.1 no Rare shareholders give notice objecting to
the Scheme, as contemplated in section 164(3) of the Companies
Act and vote against the resolution proposed at the general
meeting to approve the Scheme (“Scheme Meeting”); or
5.1.2.2 if Rare shareholders give notice objecting to
the Scheme, as contemplated in section 164(3) of the Companies
Act, and vote against the resolution proposed at the Scheme
Meeting, Rare shareholders holding no more than 5% of all
Scheme Shares eligible to vote at the Scheme Meeting give such
notice and vote against the resolutions proposed at the Scheme
Meeting; or
5.1.2.3 if Rare shareholders holding more than 5% of
all Scheme Shares eligible to vote at the Scheme Meeting give
notice objecting to the Scheme, as contemplated in section
164(3) of the Companies Act, and vote against the resolution
proposed at the Scheme Meeting, the relevant Rare
shareholders do not exercise their appraisal rights, by giving
valid demands in terms of sections 164(5) to 164(8) of the
Companies Act within 30 business days following the Scheme
Meeting, in respect of more than 5% of the Scheme shares
eligible to vote at the Scheme Meeting; and
5.1.3 that, in respect of the implementation of the
Scheme and only to the extent that same may be applicable, the
approval of the JSE, the TRP, as amended and any other
relevant regulatory authorities (either unconditionally or
subject to conditions acceptable to the Offeror) be obtained.
5.2 The Scheme Conditions in paragraphs 5.1.1 and 5.1.3
cannot be waived.
5.3 The Scheme Condition in paragraph 5.1.2 may be
waived by the Offeror upon written notice to Rare, prior to
the date for fulfilment of the relevant Scheme Condition.
5.4 The Offeror will be entitled to extend the date for
the fulfilment of any of the Scheme Conditions, by up to 30
days, in its own discretion, upon written notice to Rare, but
shall not be entitled to extend the date to a date later than
the aforesaid 30 day period without the prior written consent
of Rare.
6. SHAREHOLDING IN RARE AND ACTING AS PRINCIPAL
6.1 The Offeror confirms that it is the holder of 29.68% of
the issued share capital in Rare. The Offeror, Stafric and
Doculate collectively hold 87.54% of the issued share capital
in Rare.
6.2 The Offeror confirms that it is the ultimate prospective
purchaser of the Scheme Shares and, save for Stafric and
Doculate, is acting alone and not in concert with any party.
7. CASH CONFIRMATION
The funds to settle the Offer have been deposited into the
trust account of Hoffman Attorneys. As required in terms of
the Companies Act and the Regulations, Hoffman Attorneys have
provided confirmation of this to the TRP in respect of the
Offeror’s financial obligations in terms of the Scheme, which
is in a form acceptable to the TRP and which complies with
regulations 111(4) and 111(5) of the Regulations.
8. INDEPENDENT BOARD, OPINION AND RECOMMENDATIONS
8.1 In accordance with the Companies Regulations, an
independent Rare board, comprised of independent non-executive
directors, being T Lategan, H Odendaal and M-A Girard, has
been appointed by the Rare Board, to evaluate the Scheme
(“Independent Board”).
8.2 The Independent Board has appointed Mazars Corporate
Finance as the independent expert to provide the Independent
Board with external advice in regard to the Scheme and to make
appropriate recommendations to the Independent Board for the
benefit of Rare shareholders. The substance of the external
advice and the opinion of the Independent Board on the Scheme
will be detailed in the Scheme Circular.
9. FURTHER DOCUMENTATION AND SALIENT DATES
9.1 Further details of the Scheme will be included in the
Scheme Circular that will, subject to the fulfilment of the
Offer Condition, be posted to Rare shareholders on or about 27
July 2016. The Scheme Circular will, inter alia, also contain
a notice of the Scheme Meeting, a form of proxy and a form of
surrender and transfer.
9.2 The Scheme will become effective and be implemented
following the fulfilment of the Offer Condition and the Scheme
Conditions. The salient dates in relation to the Scheme will
be published in due course.
10. INDEPENDENT BOARD RESPONSIBILITY STATEMENT
The Independent Board accepts responsibility for the
information contained in this announcement which relates to
Rare and confirms that, to the best of its knowledge and
belief, such information which relates to Rare is true and the
announcement does not omit anything likely to affect the
importance of such information.
11. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Rare shareholders are referred to Rare’s cautionary
announcement released on SENS on 6 May 2016, and are advised
that, whereas the terms of the Scheme have now been announced,
caution is no longer required to be exercised by shareholders
when dealing in their Rare shares.
Kliprivier
22 June 2016
Transaction Advisor and Designated advisor: PSG Capital (Pty)
Limited
Date: 22/06/2016 02:59:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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