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Firm intention by Ingenuity to make an offer to Ingenuity shareholders and withdrawal of cautionary announcement
INGENUITY PROPERTY INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2000/018084/06)
JSE share code: ING
ISIN: ZAE000127411
(“Ingenuity”)
ANNOUNCEMENT OF A FIRM INTENTION BY INGENUITY TO MAKE AN OFFER TO INGENUITY
SHAREHOLDERS TO REPURCHASE THEIR INGENUITY SHARES AND DELIST INGENUITY FROM THE
JSE, SUSPENSION OF THE PROPOSED SPECIFIC REPURCHASE AND WITHDRAWAL OF
CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
The board of directors of Ingenuity (the “Board”) is pleased to announce that it has resolved to propose
the terms and conditions of:
• a cash offer to repurchase all the ordinary shares in Ingenuity for a repurchase price of R1.08 per
share (“Scheme Consideration”), other than those held by the shareholders identified in
paragraph 5 below, (the “Consortium”) (each, a "Scheme Share"), in accordance with section 48
and section 114(1)(e) of the Companies Act, No. 71 of 2008 (“Companies Act”) and paragraph
1.17(b) of the JSE Listings Requirements ("Listings Requirements") by way of a scheme of
arrangement “(Scheme”); and
• a general offer to shareholders of Ingenuity, excluding the Consortium (each, a "General Offer
Share"), as contemplated in section 117(1)(c)(v) of the Companies Act and paragraph 1.15(c) of
the Listings Requirements, to acquire the General Offer Shares for a cash consideration of R1.08
per General Offer Share (“General Consideration”) by way of a general offer (“General Offer”);
and
• the delisting of all Ingenuity shares from the Johannesburg Stock Exchange ("JSE") pursuant to
the implementation of the Scheme or pursuant to the delisting being approved and the General
Offer being implemented (“Delisting”).
The Scheme and General Offer are proposed concurrently on the basis that the implementation of
the General Offer will be conditional upon, inter alia, the Scheme not becoming operative. In this
regard, in the event that the Scheme becomes operative, the General Offer will lapse. Alternatively,
if the Scheme does not become operative and the General Offer becomes wholly unconditional, the
General Offer will be implemented.
The Delisting will occur if the Scheme becomes operative or the General Offer becomes wholly
unconditional and is implemented.
Ingenuity has constituted an independent board of directors of Ingenuity (“Independent Board”) for
the purposes of the Scheme and General Offer, including, evaluating the terms and conditions of the
Scheme and General Offer and advising Ingenuity shareholders thereon as required by the
Regulations, 2011, promulgated under the Companies Act ("Companies Regulations"). The
Independent Board comprises Rodney Clive Squire-Howe, Raymond Selwyn Schur and Keith Getz.
The purpose of this firm intention announcement (“Firm Intention Announcement”) is to advise the
Ingenuity shareholders of the terms and conditions of the Scheme.
2. RATIONALE FOR THE SCHEME AND THE GENERAL OFFER
Following a strategic review, the Ingenuity Board has considered what is in the best interests of
Ingenuity shareholders and Ingenuity, with one option being a potential delisting from the main board
of the JSE.
In order to facilitate the exit of certain shareholders that do not wish to or are unable to remain invested
in an unlisted entity, Ingenuity proposes a Scheme or the General Offer to repurchase shares held
by Scheme Participants.
Ingenuity has been listed on the JSE since 2007 and during that period Ingenuity has not experienced
material benefits from being in the listed environment, having not garnered institutional shareholder
support to justify the regulatory processes, listing requirements, compliance costs and associated
costs with being listed. In addition, Ingenuity has been unable to generate sufficient shareholder
spread and liquidity, impeding its ability to raise equity capital in order to fund its development
pipeline. In addition, management of Ingenuity will be able to dedicate more time and resources to
the performance of the business of Ingenuity without dedicating time, expenses and resources to
regulatory requirements and processes associated with being a listed entity.
3. TERMS AND CONDITIONS OF THE SCHEME
The Scheme constitutes an “affected transaction” as defined in section 117(1)(c)(iii) of the Companies
Act, and as such the Scheme is regulated by the Companies Act and the Companies Regulations.
The salient terms of and other information pertaining to the Scheme are set out below:
3.1 Terms of the Scheme
3.1.1 The Scheme will be proposed by the Board between Ingenuity and the shareholders of
Ingenuity, other than the Consortium and subsidiaries of Ingenuity (the “Eligible
Shareholders”).
3.1.2 The Scheme will be subject to the fulfilment of the conditions set out in paragraph 3.3.
below.
3.1.3 In the event that the Scheme becomes operative, the listing of all of the ordinary shares
in Ingenuity on the JSE will be terminated, and Eligible Shareholders, excluding those
Eligible Shareholders who validly exercise their appraisal rights in accordance with
section 164 of the Companies Act as a consequence of the approval of the Scheme and
whose shareholder rights have not been reinstated as envisaged in sections 164(9) and
164(10) of the Companies Act or who have not been ordered by any South African High
court (the “the Court”) to withdraw their demands in terms of section 164(15)(c)(v)(aa)
of the Companies Act (“Scheme Participants”), will be deemed to have disposed of all
of their Scheme Shares at the Scheme Consideration, such that Ingenuity will acquire all
of the Scheme Shares previously held by the Scheme Participants.
3.2 Scheme Consideration
The Scheme Participants shall receive the Scheme Consideration, in the amount of R1.08 per
Scheme Share held by such Scheme Participant.
3.3 Scheme Conditions
The implementation of the Scheme is subject to the fulfilment or waiver, as the case may be, of
the following conditions (“Scheme Conditions”) by no later than 31 December 2019 ("Longstop
Date"):
3.3.1 all approvals, consents or waivers from those South African regulatory authorities as may
be necessary for Ingenuity to implement the Scheme, including the JSE and the Takeover
Regulation Panel (“TRP”) (by means of the issue of a compliance certificate in terms of
section 121(b)(i) of the Companies Act), are obtained on an unconditional basis or, to the
extent that any such regulatory approvals, consents or waivers are obtained subject to
any condition or qualification, Ingenuity (to the extent that it is adversely affected by the
condition or qualification) confirms in writing that the condition or qualification is
acceptable to it, which confirmation shall not be unreasonably withheld or delayed;
3.3.2 all necessary shareholder approvals as may be necessary to give effect to the Scheme
have been obtained, including, but not limited to, the Scheme special resolution at the
general meeting of Eligible Shareholders ("General Meeting") to be held on or about
13 September 2019 in order to consider and, if deemed fit, pass, the special resolution
in accordance with sections 48(8) and 115(2) of the Companies Act and the special
resolution of the Eligible Shareholders, in accordance with paragraph 5.69(b) of the
Listings Requirements (collectively, the “Scheme Resolutions”);
3.3.3 Ingenuity has not elected to treat the Scheme Resolution as a nullity pursuant to section
115(5)(b) of the Companies Act;
3.3.4 in the circumstances where Ingenuity has not elected to treat the Scheme Resolution as
a nullity pursuant to section 115(5)(b) of the Companies Act, a Court has granted its
approval pursuant to section 115(3) of the Companies Act in circumstances where:
3.3.4.1 the Scheme Resolution is opposed by 15% or more of the voting rights that
were exercised in respect of the Scheme Resolution; and
3.3.4.2 a shareholder who voted against the Scheme Resolution requires Ingenuity,
within five business days after the vote, to seek Court approval pursuant to
section 115(3)(a) of the Companies Act;
3.3.5 no shareholder who voted against the Scheme Resolution applies to court within 10 (ten)
business days after the passing of the Scheme Resolution for leave to apply to the court
for a review of the Scheme in accordance with the requirements of section 115(3)(b) and
section 115(6) of the Companies Act;
3.3.6 Ingenuity waives the scheme condition in 3.3.5 and the Court does not grant leave to any
shareholder to apply to Court for a review of the Scheme, as contemplated in sections
115(3)(b), 115(6) and 115(7) of the Companies Act;
3.3.7 Ingenuity waives the scheme condition in 3.3.6 and the Court approves the Scheme
Resolution pursuant to section 115(7) of the Companies Act; and
3.3.8 with regard to shareholders entitled to and exercising their appaisal rights, either
(i) shareholders give notice objecting to the Scheme as contemplated in section 164(3)
of the Companies Act and vote against the Scheme at the relevant meeting in respect of
less than or equal to 2% of all of the issued Ingenuity shares or (ii) if shareholders give
notice objecting to the Scheme and vote against the Scheme at the meeting in respect
of more than 2% of all of the Ingenuity shares, then, within the time period permitted in
terms of the Companies Act, dissenting shareholders have exercised appraisal rights, by
giving valid demands in terms of sections 164(5) to 164(8) of the Companies Act, in
respect of less than or equal to 2% of all the Ingenuity shares, or not at all.
Ingenuity shall be entitled to waive (in whole or in part) in writing any one or more of the Scheme
Conditions stipulated in paragraphs 3.3.5, 3.3.6 and 3.3.8. The remaining Scheme Conditions
stipulated above are not capable of waiver. The Longstop Date may be extended by Ingenuity as
may be agreed in writing between Ingenuity and the TRP.
3.4 Termination of the the Scheme
The Scheme shall terminate and cease with immediate effect only as follows:
3.4.1 if any Scheme Condition, which may be waived by Ingenuity, becomes incapable of
fulfilment, and Ingenuity does not waive that Scheme Condition; or
3.4.2 if all the Scheme Conditions have not been fulfilled or waived on or by the date specified
for fulfilment.
4. TERMS AND CONDITIONS OF THE GENERAL OFFER
4.1 Terms of the General Offer
4.1.1 Simultaneously with the Scheme, Ingenuity will make a separate but concurrent
General Offer, in terms of section 117(1)(c)(v) of the Companies Act and
paragraph 1.15(c) of the Listings Requirements, to the Eligible Shareholders,
whereby each Eligible Shareholder will be entitled to elect whether or not to dispose
of all of their General Offer Shares to Ingenuity for the General Offer Consideration
(“General Offer Participants”).
4.1.2 For the avoidance of doubt, implementation of the General Offer will be conditional
on, inter alia, the Scheme not becoming operative. In the event that the Scheme does
become operative, the General Offer will lapse and be of no force and effect.
4.1.3 If the Scheme does not become operative and the General Offer becomes wholly
unconditional and is implemented, then the Delisting will be implemented in terms of
paragraph 1.14 of the Listings Requirements and each General Offer Participant will
receive the General Offer Consideration in exchange for the General Offer Shares
tendered and disposed of.
4.1.4 In the event that the General Offer becomes wholly unconditional and is
implemented, Ingenuity will acquire and own all the General Offer Shares tendered
and previously held by the General Offer Participants. The repurchase of the General
Offer Shares by Ingenuity, following the implementation of the General Offer, will be
subject to the acceptances of the General Offer and the provisions of section 124(1)
of the Companies Act. In the event that the General Offer is implemented and
accepted by Eligible Shareholders holding at least 90% of the General Offer Shares,
Ingenuity may, at its election, invoke the provisions of section 124(1) of the
Companies Act, to compulsorily acquire all of the General Offer Shares not already
tendered by the Eligible Shareholders.
4.1.5 If the Scheme does not become operative and the General Offer becomes wholly
unconditional and is implemented, and Ingenuity elects not to invoke the the
provisions of section 124(1) of the Companies Act, Eligible Shareholders who have
not accepted the General Offer will remain shareholders in Ingenuity.
4.2 General Offer Consideration
General Offer Participants shall receive the General Offer Consideration, in the amount of R1.08
per General Offer Share held by such General Offer Participant.
4.3 The General Offer Conditions
4.3.1 Implementation of the General Offer is subject to the fulfilment or waiver, as the case
may be, of the following conditions ("General Offer Conditions") by no later than
1 March 2020:
4.3.1.1 the Scheme does not become operative;
4.3.1.2 the delisting resolution is adopted by the requisite majority of Eligible
Shareholders at the General Meeting as contemplated in paragraphs
1.15(a) and 1.16 of the Listings Requirements (“Delisting
Resolution”);
4.3.1.3 Eligible Shareholders accept the General Offer in respect of so many
General Offer Shares as will result in Ingenuity acquiring more than
90% of the General Offer Shares; and
4.3.1.4 the receipt of all approvals, consents or waivers from those South
African regulatory authorities as may be necessary for Ingenuity to
implement the General Offer and Delisting, including the JSE and
TRP (by means of issue of a compliance certificate in terms of
section 121(b)(i) of the Companies Act) on an unconditional basis or,
to the extent that any such regulatory approvals, consents or waivers
are obtained subject to any condition or qualification, Ingenuity (to
the extent that it is adversely affected by the condition or
qualification) confirms in writing that the condition or qualification is
acceptable to it, which confirmation shall not be unreasonably
withheld or delayed.
4.3.2 Waiver and extension of General Offer Conditions
4.3.2.1 The General Offer Conditions set out in paragraphs 4.3.1.2 and
4.3.1.3 are capable of waiver by Ingenuity and the time and/or date
for fulfilment or waiver of such General Offer Conditions may be
extended by Ingenuity from time to time as may be agreed in writing
between Ingenuity and the TRP.
4.3.2.2 The General Offer Conditions set out in paragraphs 4.3.1.1 and
4.3.1.4 are not capable of waiver but the time and/or date for
fulfilment of these General Offer Conditions may be extended by
Ingenuity from time to time as may be agreed in writing between
Ingenuity and the TRP.
4.3.2.3 An announcement will be released on SENS as soon as practicable
after all the General Offer Conditions have been fulfilled or waived,
if the General Offer Conditions are not fulfilled or waived timeously,
or if the time and/or date for fulfilment or waiver of the General Offer
Conditions is extended.
5. THE CONSORTIUM
The Consortium includes inter-alia Jacana Assets Limited, Pruta Securities (Jersey) Limited, Bank of New
York (acting as custodian), Gingko Trading Proprietary Limited and Arnold Maresky. As at the date of this
announcement, the Consortium owns, in aggregate, 56% of Ingenuity’s shares (net of treasury shares).
Ingenuity and the Consortium are concert parties in relation to the Scheme in terms of Regulation 84 of
the Takeover Regulations and have therefore made declarations in the required form to Ingenuity and the
TRP, as required by Regulation 84(5) of the Companies Regulations. The Consortium will, accordingly,
abstain from voting on the Scheme at the Scheme Meeting.
6. IRREVOCABLE UNDERTAKINGS
Ingenuity has received irrevocable undertakings from certain Scheme Participants being, The Century
City Property Investment Trust (“CCPIT”), Investec Property Fund Limited (“IPF”) and The Nafco Trust
(“Nafco Trust”) to vote in favour of the Scheme and the Delisting Resolution.
A summary of the aforementioned Scheme Participants shareholdings are outlined below:
Percentage of Ingenuity shares
Shareholder Number of Ingenuity Shares
(net of treasury shares)
CCPIT 200 000 000 18.70%
IPF 115 041 528 10.76%
Nafco Trust 41 020 981 3.83%
Total 356 062 509 33.29%
The aforementioned Scheme Participants shareholdings equates to 76.20% of all shares eligible to vote
on the Scheme and the Delisting Resolution.
7. SOLVENCY AND LIQUIDITY
The Board has concluded that Ingenuity will (i) satisfy the solvency and liquidity test contemplated in
section 4 of the Companies Act immediately after completing the repurchase by Ingenuity of the Scheme
Shares in terms of the Scheme and (ii) for purposes of paragraph 5.69(c) of the Listings Requirements,
that after considering the effect of the repurchase, the provisions of section 4 and section 48 of the
Companies Act have been complied with and that:
7.1 Ingenuity and its subsidiaries ("Group") will be able, in the ordinary course of business, to pay
their debts for a period of 12 months after the date of the repurchase;
7.2 the assets of Ingenuity and the Group will exceed the liabilities of Ingenuity and the Group for a
period of 12 months after the date of the repurchase;
7.3 the share capital and reserves of Ingenuity and the Group will be adequate for ordinary business
purposes for a period of 12 months after the repurchase; and
7.4 the working capital of Ingenuity and the Group will be adequate for ordinary business purposes
for a period of 12 months after the repurchase.
8. INDEPENDENT EXPERT AND FAIR AND REASONABLE OPINION
The Independent Board has appointed BDO Corporate Finance Proprietary Limited (“BDO”) as the
independent expert to provide it with external advice in connection with the Scheme and the General
Offer, in the form of the fair and reasonable opinion as required by and in compliance with the Takeover
Regulations and the Listings Requirements, and the fairness opinion as required by and in compliance
with the Listings Requirements.
The full substance of BDO’s expert report in connection with the Scheme, once procured, will be more
fully set out in the circular to be posted to Eligible Shareholders as referred to in paragraph 11 below.
9. RESPONSIBILITY STATEMENT
The Board, including the Independent Board, accepts responsibility for the information contained in this
announcement insofar as it relates to Ingenuity, the Scheme, General Offer and Delisting. To the best of
their collective knowledge and belief, the information contained in this announcement is true and this
announcement does not omit anything likely to affect the importance of the information.
10. CASH CONFIRMATION
The funds to settle the Scheme Consideration and/or the General Offer Consideration are in place and,
in accordance with Regulation 111(4) and 111(5) of the Takeover Regulations, Ingenuity has obtained
and delivered to the TRP an irrevocable unconditional bank guarantee issued by The Standard Bank of
South Africa Limited for the maximum possible Scheme Consideration or General Offer Consideration,
whichever is applicable.
11. POSTING OF THE CIRCULAR
Ingenuity will issue a circular to shareholders, containing full terms and conditions of the Scheme, General
Offer and notice to convene the General Meeting (“Circular”).
Full details of the Scheme as well as the independent expert’s opinion and the recommendation of the
Independent Board will be included in the Circular which will contain, inter alia, the terms of the Scheme,
pertinent dates relating to the Scheme and the necessary forms in order to effect the Scheme. The
Circular is expected to be distributed to shareholders on or about 14 August 2019.
12. SUSPENSION OF PROPOSED SPECIFIC REPURCHASE
In light of the contents of this announcement, and for the avoidance of doubt, shareholders are advised
that the proposed specific repurchase of Ingenuity shares, the most recent details of which were published
on SENS on 26 June 2019, is hereby suspended and accordingly, no circular will be posted in this regard.
13. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Post the release of this announcement, shareholders are advised that caution is no longer required to be
excercised in their dealings in Ingenuity shares.
CAPE TOWN
16 July 2019
LEGAL ADVISERS TO INGENUITY
Webber Wentzel
CORPORATE ADVISER AND TRANSACTION SPONSOR
Investec Bank
INDEPENDENT EXPERT
BDO Corporate Finance
SPONSOR
Nedbank Corporate and Investment Banking, a division of Nedbank Limited
Date: 16/07/2019 04:22:00
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