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Specific repurchase of 12 826 440 ordinary shares, posting of circular and notice of special general meeting
Nictus Limited
Incorporated in the Republic of South Africa
Registration number: 1981/011858/06
JSE share code: NCS • ISIN: NA0009123481
(“Nictus” or “the Company” or “the Group”)
SPECIFIC REPURCHASE OF 12 826 440 ORDINARY SHARES, POSTING OF CIRCULAR AND
NOTICE OF SPECIAL GENERAL MEETING
1. INTRODUCTION
Nictus shareholders (“Nictus Shareholders”) are advised that Nictus and Nictus Holdings
Limited (“NHL”), a public company listed on the Namibian Stock Exchange, have entered
into an agreement, dated 27 August 2018 (“Repurchase Agreement”), in terms of which
Nictus will repurchase 12 826 440 ordinary shares (the “Repurchase Shares”) in the share
capital of Nictus from NHL (“Repurchase”).
The Repurchase will be undertaken in accordance with section 48(8)(b) and section 114,
read with sections 115 and 164 of the Companies Act, No. 71 of 2008, as amended
(“Companies Act”) and its regulations (“Regulations”) and paragraph 5.69 of the Listings
Requirements of the JSE Limited (“Listings Requirements”).
A circular setting out the details of the Repurchase (“Circular”) and incorporating a notice
convening a special general meeting of Nictus Shareholders to approve the special and
ordinary resolutions required to implement the Repurchase (“Special General Meeting”) will
be distributed to Nictus Shareholders on or about Tuesday, 25 September 2018.
2. DETAILS OF THE REPURCHASE
2.1 Terms of the Repurchase
The Repurchase will be undertaken at a price of 58,25 cents per Repurchase Share
(“Repurchase Price”) on the implementation date, on or about Monday, 12 November 2018
(“Implementation Date”). The Repurchase Price represents a discount of 4,32% to the
weighted average traded price of the Nictus ordinary shares (“Nictus Shares”) measured
over the 30 business days prior to Monday, 27 August 2018, the date on which the
Repurchase Price was agreed in writing between Nictus and NHL in terms of the Repurchase
Agreement, of 60,88 cents per Nictus Share. The repurchase consideration will amount to
R7 471 401,30 (“Repurchase Consideration”).
The payment of the Repurchase Consideration by Nictus will be from contributed tax
capital. Nictus will call for a cash amount equal to the Repurchase Consideration, and the
expenses relating to the Repurchase, from a loan granted to Nictus Holdings.
The Repurchase Shares will be delisted and cancelled on the Implementation Date.
2.2 Rationale
During 2012, an unbundling transaction took place whereby NHL was unbundled from
Nictus. As a result of the unbundling, NHL acquired a 19,35% shareholding in Nictus. Since
2015, Nictus has been profitable on an annual basis and maintained a consistent dividend
distribution to Nictus Shareholders. Nictus formulated a long?term strategy to become a
sought?after wealth creator for all stakeholders. The Repurchase is one of the steps Nictus is
taking as part of the execution of this strategy with the direct result being the creation of
additional Nictus Shareholder value, as illustrated in the pro forma financial information
presented in paragraph 3 below.
2.3 Conditions precedent
The Repurchase is subject to the following conditions precedent:
• JSE and Takeover Regulation Panel (“TRP”) approval of the necessary Circular to Nictus
Shareholders in compliance with the Listings Requirements and the Companies Act;
• the passing of a special resolution, in accordance with the requirements of sections
48(8)(b), 114 and 115 of the Companies Act and paragraph 5.69(c) of the Listings
Requirements at the Special General Meeting, by the requisite majority of holders of
Nictus Shares other than those held by the Tromp family, as detailed in paragraph 2.4
below (“Independent Nictus Shareholders”);
• in the event where the provisions of section 115(2)(c) of the Companies Act become
applicable, the High Court of South Africa (“Court”) approving the Repurchase,
providing the Company has not treated the Repurchase resolution as a nullity in terms
of section 115(5)(b) of the Companies Act;
• the Board not having resolved at the time of the Special General Meeting to revoke
the Repurchase resolution in circumstances where more than 5% of the Independent
Nictus Shareholders have, in terms of section 164(3) of the Companies Act, objected
to the Repurchase;
• the Board not having resolved at the time of the Special General Meeting to revoke
the Repurchase resolution in circumstances where more than 5% of the Independent
Nictus Shareholders have exercised their appraisal rights in terms of, and in
compliance with, section 164(5) of the Companies Act;
• the Board not having resolved to treat the Repurchase resolution as a nullity in terms
of section 115(5)(b), in the circumstances where the Repurchase resolution was
opposed by at least 15% of the voting rights that were exercised at the Special General
Meeting and, within 5 Business Days of the Special General Meeting, any Independent
Nictus Shareholder who voted against the Repurchase resolution requiring the
Company to seek Court approval; and
• the issuance of a compliance certificate by the TRP in terms of section 119(4)(b) of the
Companies Act read together with regulation 102(13) in relation to the Repurchase.
2.4 Interests in Nictus and NHL shares
At the date of this announcement, Nictus had no interest in any listed securities of NHL and
NHL held the Repurchase Shares (equivalent to 19,35% of the total issued Nictus Shares) in
Nictus.
At the date of this announcement, Nicolaas Cornelius Tromp, Gerard Rochelle de Villiers
Tromp and Philippus Johannes de Witt Tromp and their associates, as defined in the JSE
Listings Requirements (the “Tromp Family”), controlled 80,96% of the Nictus Shares and
57,05% of NHL’s shares.
Although not an “acquiring party” as defined in the Companies Act, or persons related to an
acquiring party, or persons acting in concert with either of them, the Nictus Shares held by
the Tromp Family, including the Tromp Family’s Nictus Shares held through NHL, will not be
included in calculating the percentage of voting rights
• required to be present, or actually present, in determining whether the applicable
quorum requirements for the Special General Meeting are satisfied; or
• required to be voted in support of a resolution, or actually voted in support of the
resolution.
2.5 Nictus Shareholder approval
As the Repurchase is being undertaken in terms of section 114 of the Companies Act,
Independent Nictus Shareholders, are required to pass a special resolution to authorise
Nictus to undertake the Repurchase. In addition, the Independent Nictus Shareholders are
required to approve the Repurchase in terms of paragraph 5.69(b) of the JSE Listings
Requirements.
3. PRO FORMA FINANCIAL INFORMATION
The pro forma financial effects of the Repurchase are provided for illustrative purposes only
and, because of their nature, may not fairly present the Group’s financial position or results
of its operations.
The pro forma financial information has been prepared to illustrate the impact
of the Repurchase on the assumption that the Repurchase took place on
1 April 2017 for statement of profit or loss and other comprehensive income
purposes and 31 March 2018 for statement of financial position purposes.
The pro forma financial information has been prepared using the accounting policies of
Nictus which comply with IFRS and are consistent with those applied in Nictus’ annual
financial statements for the year ended 31 March 2018.
The pro forma financial information is the responsibility of the Nictus board of directors
(“Nictus Board”).
Before the After the %
Repurchase Repurchase change
Earnings per Nictus Share (“EPS”) 8,17 8,98 10
Diluted earnings per Nictus Share (“DEPS”) 8,17 8,98 10
Headline earnings per Nictus Share (“HEPS”) 8,17 8,98 10
Diluted headline earnings per Nictus Share (“DHEPS”) 8,17 8,98 10
Net asset value per Nictus Share (“NAV”) 1,55 1,77 14
Net tangible asset per Nictus Share (“NTAV”) 1,55 1,77 14
Number of Nictus Shares in issue 66 269 940 53 443 500 (19)
Weighted average number of Nictus Shares in issue 66 269 940 53 443 500 (19)
Notes:
1. The “Before the Repurchase” financial information has been extracted, without
adjustment, from the published financial information of Nictus for the year ended and
as at 31 March 2018.
2. The “After the Repurchase” EPS, DEPS, HEPS and DHEPS include an adjustment for the
reduction in interest earned by Nictus due to Nictus calling for a cash amount equal to
the Repurchase Consideration and the amount required to settle the expenses
relating to the Repurchase, from the loan granted to NHL. The interest adjustment has
been calculated using an interest rate of 10.32%, being the average South African
prime interest rate for the period 1 April 2017 to 31 March 2018. Taxation has been
adjusted for the interest adjustment. These adjustments will have a continuous effect
on the Nictus statement of profit or loss and other comprehensive income.
3. The “After the Repurchase” NAV and NTAV per Nictus Share include adjustments to
cash and cash equivalents and loans and receivables for the Repurchase Consideration
amounting to R7,471 million and the transaction costs amounting to R795 000.
4. Stated capital has been decreased by the amount originally paid by Nictus Holdings
for the Repurchase Shares and the expenses relating to the Repurchase which have
been capitalised in terms of IAS 32: Financial Instruments Presentation, amounting to
R22,741 million, and retained earnings has been increased for the gain on the
Repurchase amounting to R14,475 million.
5. The weighted average number of Nictus Shares in issue and the number of Nictus
Shares in issue have been adjusted for the repurchase of the 12 826 440 Nictus Shares
in terms of the Repurchase.
4. OPINIONS AND RECOMMENDATIONS
As required in terms of the Companies Act and the Regulations, the Nictus Board has
identified those members of the Nictus Board, namely Prof. Barend Johannes Willemse,
Gerard Swart and John Day Mandy, who are independent (“Independent Board”) for
purposes of evaluating the Repurchase.
The independent Board has appointed BDO Corporate Finance Proprietary Limited
(“Independent Expert”) in terms of section 114 of the Companies Act, regulation 90 of the
Regulations and section 5.69 of the JSE Listings Requirements, to provide a fair and
reasonable opinion in regard to the Repurchase (“Opinion”) and to make appropriate
recommendations to the Independent Board for the benefit of the Independent Nictus
Shareholders. In this regard, the Independent Expert has advised the Independent Board
that it has considered the terms and conditions of the Repurchase and is of the opinion that
these terms and conditions are fair and reasonable to Independent Nictus Shareholders. The
text of the Opinion and the views of the Independent Board will be detailed in the Circular.
5. RECOMMENDATION OF THE INDEPENDENT BOARD
The Independent Board, taking into account the Opinion of the Independent Expert, has
considered the terms and conditions of the Repurchase and is unanimously of the opinion
that the terms and conditions of the Repurchase are fair and reasonable to Independent
Nictus Shareholders. In particular, the Independent Board has considered the fair value
range determined by the Independent Expert and is in agreement with the fair value range
so determined and has placed reliance on the valuation performed by the Independent
Expert.
Accordingly, the Independent Board recommends that Independent Nictus Shareholders
vote in favour of the resolutions to be proposed at the Special General Meeting. Those
Independent Board members who hold Nictus Shares intend to vote in favour of the
resolutions to be proposed at the Special General Meeting, to be held in the boardroom,
Nictus Building, Corner of Dover and Pretoria Street, Randburg on Wednesday 24 October
2018 at 11:00.
6. IRREVOCABLE UNDERTAKINGS
Nictus has secured irrevocable undertakings from the parties listed below, representing
approximately 30,37% of voting Nictus Independent Shareholders, to vote in favour of the
resolutions at the Special General Meeting.
Number of
Nictus Shares
at the date
of this
Nictus Independent Shareholder announcement %
Franke Trust 1 304 190 10,34
Oreon Place Investments Proprietary Limited 1 000 000 7,93
Haida Investments cc 941 144 7,46
Wilbur Okkie Izaaks 413 586 3,28
Hartman Eckhart Prozesky 172 000 1,36
Total 3 830 920 30,37
7. FUNDING OF THE REPURCHASE CONSIDERATION AND CASH CONFIRMATION
Nictus will fund the Repurchase Consideration out of cash resources and has provided a
written confirmation from Corporate Guarantee (South Africa) Limited to the TRP that the
Company has the cash resources necessary to meet their obligations under the Repurchase.
8. INDEPENDENT BOARD’S RESPONSIBILITY STATEMENT
The Independent Board accepts responsibility for the information contained in this firm
intention announcement and confirms that, to the best of its knowledge and belief, the
information is true and does not omit anything likely to affect the importance of the
information.
9. SALIENT DATES
The salient dates of the Repurchase are as follows:
2018
Friday, 17
Record date to be entitled to receive notice of the Special General Meeting September
Tuesday, 25
Circular posted to Nictus Shareholders on September
Last day to trade Nictus Shares in order to be eligible to participate and Tuesday, 16
vote at the Special General Meeting October
Record date to be entitled to participate in and vote at the Special General Friday, 19
Meeting October
Forms of proxy for the Special General Meeting must be received by 11:00 Monday, 22
on October
Last date and time for Independent Nictus Shareholders to give notice to
Nictus objecting to the special resolution approving the Repurchase if the
Repurchase resolution was proposed or if proposed and not retracted or Wednesday,
treated as a nullity by 11:00 on 24 October
Wednesday,
Special General Meeting to be held at 11:00 on 24 October
Wednesday,
Results of the Special General Meeting released on SENS on 24 October
If the Repurchase is approved by Independent Nictus Shareholders at the
Special General Meeting
Last date for Independent Nictus Shareholders who voted against the
Repurchase to require the Company to seek Court approval for the
Repurchase in terms of section 115(3) of the Companies Act, if at least 15%
of the total votes of Nictus Shares at the Special General Meeting were Wednesday,
exercised against the Repurchase 31 October
Last day for the Company to send notice of adoption of the Repurchase
resolution to Independent Nictus Shareholders who validly exercise their Wednesday, 7
appraisal rights in accordance with section 164(4) of the Companies Act November
Last day for Independent Nictus Shareholders who voted against the
Repurchase to apply to Court for leave to apply to the Court for a review of Wednesday, 7
the Repurchase in terms of section 115(3)(b) of the Companies Act November
Thursday, 8
Expected unconditional date of the Repurchase November
Monday, 12
Expected Implementation Date of the Repurchase November
Notes
1. These dates and times are subject to amendment. Any such amendment will be
released on SENS.
10. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Nictus Shareholders are advised that the cautionary announcement has been withdrawn.
Randburg
28 August 2018
Sponsor on the JSE and Legal Advisor
KPMG Services Proprietary Limited
Independent Expert
BDO Corporate Finance Proprietary Limited
Reporting accountant to Nictus
KPMG Inc.
Date: 28/08/2018 04:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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