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Firm Intention Announcement and Withdrawal of Cautionary
EFFICIENT GROUP LIMITED APIS GROWTH 12 SOUTH AFRICA
Incorporated in the Republic of South Africa PROPRIETARY LIMITED
(Registration number 2006/036947/06) Incorporated in the Republic of South Africa
Share code: EFG ISIN: ZAE000151841 (Registration number 2020/038206/07)
(“Efficient” or “the Company”) (“Apis”)
JOINT ANNOUNCEMENT OF A FIRM INTENTION BY APIS TO MAKE AN OFFER TO ACQUIRE
THE ENTIRE ISSUED SHARE CAPITAL OF EFFICIENT (OTHER THAN CERTAIN EXCLUDED
SHARES) AND WITHDRAWAL OF CAUTIONARY
1 INTRODUCTION
Further to the cautionary announcement released on SENS on 29 July 2019 and the subsequent
renewals of such cautionary announcement, the last of which was dated 6 March 2020, the board of
directors of Efficient (“Board”) and the board of directors of Apis ("Apis Board") are pleased to
announce that the Company and Apis (the "Offeror") have concluded a written implementation
agreement ("Implementation Agreement") dated 11 March 2020 ("Signature Date") in terms of which
Apis has made a firm offer ("Offer") to acquire all of the issued ordinary shares in the Company
("Shares"), excluding 110 333 872 Shares (“Excluded Shares”) held by the “Remain Shareholders”
as detailed below, being a total of 6 609 259 Shares ("Scheme Shares").
The Remain Shareholders (including their shareholding in Efficient), comprise Apis Growth 12 Ltd
("Apis Growth 12") (27 777 778 Shares), Sasfin Wealth Proprietary Limited (26 118 067 Shares), TBI
Strategic Partners Proprietary Limited (18 621 606 Shares), Grondputs Beleggings Proprietary
Limited (15 066 643 Shares), H Weidhase (6 036 644 Shares), D Roodt (5 185 031 Shares), E B
Weidhase (2 636 221 Shares), R Craib (2 100 689 Shares), B Weidhase (2 095 543 Shares), T
Booysen (1 949 780 Shares), S F Booysen (1 542 639 Shares), A T de Klerk (498 499 Shares), J P
De Klerk (280 000 Shares), R Barnard (171 839 Shares), W D Basson (37 893 Shares), D J Janse
van Rensburg (30 000 Shares) and T Thomson (185 000 Shares).
The Offer will be implemented by way of a scheme of arrangement ("Scheme"), between the Company
and the holders of its Shares ("Shareholders"), in terms of section 114 of the Companies Act, 2008
(Act 71 of 2008), as amended ("Companies Act").
The amount payable in terms of the Scheme will be a cash consideration of R5.51 per Scheme Share
("Scheme Consideration").
The Board has convened an independent board ("Independent Board") as required by the
Companies Regulations, 2011 ("Companies Regulations"), which comprises Babalwa Ngonyama
(Chairperson), Zee Cele and Joe Rosen, for purposes of evaluating and advising Shareholders
whether the Scheme and the Scheme Consideration are fair and reasonable to Shareholders.
The Shares will be delisted from the Main Board of the JSE Limited ("JSE") pursuant to the
implementation of the Scheme ("Delisting").
The purpose of this joint firm intention announcement ("Firm Intention Announcement") is to advise
Shareholders of the terms and conditions of the Scheme.
2 BACKGROUND TO THE COMPANY AND THE OFFEROR
Efficient and its subsidiaries (“Group”) is a diversified financial services group focused on providing
professional advice, custom-designed products and quality service across the entire financial
services value chain. The Group’s offering includes financial planning services, asset management,
multi-management, asset consulting, asset administration, fiduciary services, private client services,
and independent employee benefits consulting services, which are offered to clients throughout
South Africa.
The Group structure consists of a three-pillared organisational structure which centres around the
following clusters:
Financial Services cluster, which is focused on providing professional financial planning services
and financial products to clients.
Services and Solutions cluster, which is focused on empowering and enabling the financial
advisor to provide market-leading and value-added services to the clients of the financial advisor.
Investments cluster, which is focused on investing in and growing financial services opportunities
where the Group believes it can add value for its clients through a competitive advantage.
As announced on SENS on 29 July 2019, Apis Growth 12 and the Company entered into a
Subscription Agreement in terms of which Apis Growth 12 subscribed for, and on 1 November 2019
Efficient issued and alloted, 27 777 778 of the unissued but authorised ordinary Shares in the share
capital of the Company (representing, after their allotment and issue, approximately 23.75% of all
Shares in issue) to Apis Growth 12, for cash, at an issue price of R4.50 per Share and for the total
consideration of R125 000 001 (“Specific Issue”).
Apis is a private company duly registered and incorporated in accordance with the laws of South
Africa, and a wholly-owned subsidiary of Apis Growth 12. Apis Growth 12 is a company incorporated
under the laws of Mauritius and owned by Apis Growth Fund I L.P., (an English limited partnership),
Apis Growth I (B) L.P., (an English limited partnership) and Apis Growth I Africa L.P., (a Mauritius
limited partnership) (collectively referred to as “Apis Growth Fund I”). Apis Growth Fund I is a private
equity fund managed by Apis Partners LLP, a London-based private equity fund manager, which is
authorised and regulated by the UK Financial Conduct Authority. Apis Partners LLP is a private equity
asset manager that supports growth stage financial services and financial infrastructure businesses
in Africa and Asia by managing funds which provide them with catalytic growth equity capital.
The Specific Issue, inter alia, introduced Apis Growth 12 as a new strategic investor into the
Company - bringing with it deep expertise in emerging markets financial services businesses and
related technology.
3 RATIONALE FOR THE OFFER
While the Efficient Group’s strategic objective remains to be a leading diversified financial services
provider with a national footprint, the Board believes that the proposed Scheme will provide
significant benefits for Efficient and its Shareholders including:
- reinforcing Apis Growth 12’s position as an anchor Shareholder better suited in assisting Efficient
in delivering on its key strategic objectives in today’s challenging business environment; and
- Efficient Shareholders receiving a significant premium for their Shares.
The Apis Board believes that Efficient presents a uniquely attractive investment given the Company’s
market positioning and growth strategy. With extensive knowledge of the financial services industry
and significant experience in corporate transactions, including acquisitions, the Apis Board intends
to combine its capabilities with those of the Board and to unlock value through key value creation
initiatives.
4 SALIENT TERMS 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 and conditions of the Scheme and other information pertaining to the Scheme are
set out below.
4.1 Scheme
The Scheme will be proposed by the Board, on recommendation of the Independent Board,
between the Company and its Shareholders.
In the event the Scheme becomes operative, the listing of the Shares on the JSE will be
terminated and each Shareholder, excluding (i) the Offeror; (ii) the Remain Shareholders; and
(iii) those Shareholders ("Dissenting Shareholders") that validly exercise their appraisal
rights in accordance with section 164 of the Companies Act ("Appraisal Rights") and who
have not had their rights in respect of their Shares re-instated as envisaged in sections 164(9)
and 164(10) of the Companies Act, whether voluntarily or pursuant to a final court order
("Scheme Participants"); will be deemed to have disposed of all of their Scheme Shares in
exchange for the Scheme Consideration, such that the Offeror will own all of the Scheme
Shares previously held by the Scheme Participants.
The Remain Shareholders have agreed with the Company that they will not be Scheme
Participants and will not dispose of any of their Shares pursuant to the Scheme.
The Remain Shareholders will be excluded for purposes of both determining whether the
applicable quorum requirements are satisfied and voting on the special resolution to approve
the Scheme ("Scheme Resolution"), as contemplated in section 115(2)(a) of the Companies
Act.
The Scheme will be subject to the fulfilment or waiver of the conditions precedent set out in
paragraph 4.3 below.
4.2 Scheme Consideration
Subject to the Scheme becoming operative, Scheme Participants will be entitled to receive a
cash consideration of R5.51 per Scheme Share.
The tax implications of the Scheme are dependent on the individual circumstances of the
Scheme Participant concerned and the tax jurisdiction applicable to such Scheme Participant.
It is recommended that the Scheme Participants seek appropriate advice in this regard.
4.3 Scheme Conditions
4.3.1 The implementation of the Scheme will be subject to the fulfilment or waiver (as the
case may be) of the following conditions precedent ("Scheme Conditions") by no
later than 17:00 on 30 June 2020 (“Long-Stop Date”) or such other date as specified
in the specific Scheme Condition:
4.3.1.1 the Scheme Resolution is approved by the requisite majority of
Shareholders, as contemplated in section 115(2)(a) of the Companies Act,
and in the event of the provisions of section 115(2)(c) of the Companies Act
becoming applicable:
4.3.1.1.1 by no later than 40 Business Days after the Scheme Resolution is
approved, the Scheme is approved by the High Court of South
Africa; and
4.3.1.1.2 if applicable, the Company not treating the Scheme Resolution as
a nullity as contemplated in section 115(5)(b) of the Companies
Act;
4.3.1.2 with regards to Shareholders exercising their Appraisal Rights (if any),
either:
4.3.1.2.1 Shareholders give notice objecting to the Scheme Resolution as
contemplated in section 164(3) of the Companies Act and vote
against the Scheme Resolution in respect of less than 15% of all
Efficient Shares in issue; or
4.3.1.2.2 if Shareholders do give notice objecting to the Scheme Resolution
and vote against the Scheme Resolution in respect of 15% or more
of all of all Efficient Shares in issue, then, within the time period
permitted in terms of the Companies Act, Dissenting Shareholders
have not exercised Appraisal Rights, by giving valid demands in
terms of sections 164(5) to 164(8) of the Companies Act, in respect
of more than 15% of all Efficient Shares in issue;
4.3.1.3 all regulatory consents are received, namely approval by the Financial
Surveillance Department of the South African Reserve Bank in terms of the
Exchange Control Regulations, the JSE and the Panel, provided that if such
consents (or any of them) are granted conditionally or on terms, this
condition shall not be regarded as having been fulfilled unless before such
date Apis and Efficient confirm, in writing, that such conditions and terms are
acceptable to each of them;
4.3.1.4 the provision by the Company of a written certificate, signed by a duly
authorised Director, to Apis that, to the Company’s knowledge following due
and careful enquiry, no Material Adverse Change (as detailed in paragraph
4.5.6 below) has occurred, as at the date immediately prior to the release of
the Firm Intention Announcement; and
4.3.1.5 the JSE grants its written approval in respect of the delisting of the Company,
being the removal of the Company’s securities from the JSE’s list of
securities.
In the event that the Scheme Conditions are not fulfilled or waived timeously, the Scheme will
not become operative and shall be of no force or effect.
4.4 Waiver of Scheme Conditions
The Scheme Condition in paragraph 4.3.1.4 has been stipulated for the benefit of Apis, which
will be entitled to waive the fulfilment of such Scheme Condition on written notice to the
Company prior to the Long-Stop Date. The Scheme Condition in paragraph 4.3.1.2 has been
stipulated for the benefit of both Apis and the Company and both Apis and the Company shall
be entitled to waive fulfilment of the same by written agreement.
The Scheme Conditions in paragraphs 4.3.1.1 and 4.3.1.3 are regulatory in nature and may
not be waived.
In terms of the Implementation Agreement, the Company has given certain undertakings in
relation to the non-solicitation and/or receipt of alternative proposals in respect of the Shares
and/or the Group.
4.5 Termination Events
Subject to paragraph 4.5.7 below, the Scheme will terminate with immediate effect and all
rights and obligations of the parties under the Scheme will terminate forthwith upon the
occurrence of the following events, namely:
4.5.1 upon written notice by Apis to the Company, if the Independent Board recommends
an alternative proposal to the Shareholders;
4.5.2 upon written notice by the Company to Apis if the Company has received an
alternative proposal which the Independent Board reasonably determines to be more
favourable to Scheme Participants (“Superior Proposal”), and, after following the
process set out in the Implementation Agreement which requires the Independent
Board to provide Apis with an opportunity to match the Superior Proposal, such
alternative proposal continues to be a Superior Proposal;
4.5.3 if any Scheme Condition, which may be waived by Apis, becomes incapable of
fulfilment, and Apis notifies the Company in writing that it will not waive that Scheme
Condition;
4.5.4 if all the Scheme Conditions have not been fulfilled or waived (to the extent
permitted) on or before the relevant date/s for fulfilment or waiver;
4.5.5 upon written notice by either Apis or the Company to the other of them ("Defaulting
Party") if the Defaulting Party commits a breach of any material provision of the
Implementation Agreement and fails to remedy such breach within five Business
Days of receipt of a notice by the Defaulting Party from the other party requesting
such remedy;
4.5.6 on the Business Day after Apis has given written notice to the Company if a Material
Adverse Change occurs. A "Material Adverse Change" means:
- any cost, loss, damage, charge, expense and/or impact to the Company, any of
the Subsidiaries as specifically set out in the Implementation Agreement
(“Substantive Subsidiaries”) or any of their respective businesses exceeding
an amount of R20 000 000 (twenty million rand), including, specifically and
notwithstanding the aforegoing, the termination of any licence required by the
Company and/or any of the Substantive Subsidiaries to conduct its business in
the ordinary course, but excluding any circumstance, fact or event that was fairly
disclosed in writing by the Group to Apis and/or Apis Growth 12 before the
Signature Date.
4.5.7 Neither the Company nor Apis shall be entitled to terminate or otherwise cancel the
Implementation Agreement or the Scheme after the date on which the Scheme
becomes operative (“Scheme Implementation Date”). Accordingly, if any provision
set out in paragraph 4.5 above provides for a remedy period, and the Scheme
Implementation Date occurs before the expiry of such remedy period, the remedy
period shall expire on the Scheme Implementation Date, even if that results in there
being no remedy period. Save for precluding the Company or Apis from terminating
or otherwise cancelling the Implementation Agreement after the Scheme
Implementation Date, the provisions of this paragraph 4.5.7 are without prejudice to
such other rights and remedies as the Company and Apis may have in law, including
the rights to claim damages or to seek specific performance.
5 IRREVOCABLE UNDERTAKINGS
Shareholders who hold in aggregate 3 379 147 Shares, representing 53.74% of the Shares in the
Company which are eligible to vote at the General Meeting referred to in paragraph 10 below, have
provided irrevocable undertakings to vote in favour of the Scheme Resolution at the General Meeting
or any adjournment thereof.
Date of irrevocable Shares subject Scheme voting
Shareholder undertaking to undertaking rights (%)
Arend De Waal Trust 10 February 2020 1 790 071 28.47
Lisa Wapnick Filipov 5 February 2020 500 000 7.95
John Michael Steytler 3 February 2020 449 361 7.15
Aliki Trust 5 February 2020 360 000 5.72
Willie Botha Family Trust 4 February 2020 279 715 4.45
TOTAL 3 379 147 53.74
6 GUARANTEE
In compliance with regulations 111(4) and 111(5) of the Companies Regulations, Apis has provided
the Takeover Regulation Panel with an irrevocable, unconditional bank guarantee issued by Absa
Bank South Africa Limited ("Absa Bank") in the amount of R36 417 017.10, being the Scheme
Consideration, confirming that, in the event that the Scheme Consideration is not paid within the
relevant time period, Absa Bank agrees to make payment of the Scheme Consideration to Link
Market Services South Africa Proprietary Limited, being the Company's transfer secretaries, for the
benefit of Scheme Participants.
7 DELISTING
Following implementation of the Scheme, the listing of all the Shares on the JSE will be terminated.
8 ACTING AS PRINCIPAL
Apis confirms that it is the ultimate proposed purchasers of all the Scheme Shares and that it is not
acting as agent or broker for any other party.
No party is acting in concert with Apis, other than Apis Growth 12, its parent company, which is
regarded to be acting in concert in terms of section 117(2) of the Companies Act.
9 INDEPENDENT BOARD, INDEPENDENT EXPERT AND RECOMMENDATIONS
The Independent Board has appointed Nodus Capital TS Proprietary Limited as the independent
expert ("Independent Expert"), as required in terms of section 114(2) of the Companies Act and the
Companies Regulations, to issue an opinion dealing with the matters set out in sections 114(2) and
114(3) of the Companies Act and regulations 90 and 110(1) of the Companies Regulations, and to
express an opinion on whether the Scheme and the Scheme Consideration are fair and reasonable
to Shareholders ("Independent Expert Report").
Having regard to the Independent Expert Report (which is in draft form as at the Signature Date), the
Independent Board is of the opinion that the Scheme and the Scheme Consideration are fair and
reasonable to Shareholders.
The final Independent Expert Report will be detailed in the Circular referred to in paragraph 10 below.
The Independent Board intends to recommend in the Circular (as defined below) that Shareholders
vote in favour of the Scheme Resolution.
10 CIRCULAR AND POSTING DATE
The Company and Apis will issue a combined offer circular to Shareholders, as contemplated in
regulation 102 of the Companies Regulations, setting out the full terms and conditions of the Scheme
and including the notice convening the general meeting of the Shareholders to consider and, if
deemed appropriate, approve the Scheme Resolution ("General Meeting"), a form of proxy in
respect of the General Meeting, and a form of surrender and transfer for use by certificated
Shareholders ("Circular").
The Circular is expected to be distributed to Shareholders on or about 2 April 2020.
The salient dates pertaining to the Scheme will be released on SENS and published in the press
prior to the distribution of the Circular.
11 RESPONSIBILITY STATEMENTS
The Independent Board, collectively and individually, accepts responsibility for the information
contained in this Firm Intention Announcement to the extent that it relates to Efficient. To the best of
its knowledge and belief, the information contained in this Firm Intention Announcement pertaining
to Efficient is true and nothing has been omitted that is likely to affect the import of the information.
The Apis Board, collectively and individually, accepts responsibility for the information contained in
this Firm Intention Announcement to the extent that it relates to Apis. To the best of its knowledge
and belief, the information contained in this Firm Intention Announcement pertaining to Apis is true
and nothing has been omitted that is likely to affect the import of the information.
12 WITHDRAWAL OF CAUTIONARY
Following the release of this Firm Intention Announcement, Shareholders are advised that caution is
no longer required when dealing in the Company’s securities.
Johannesburg
12 March 2020
Sponsor to Efficient and Adviser to the Independent Board
Merchantec Capital
Corporate Adviser to Efficient
Bravura Capital
Legal Advisor to Efficient
Adams & Adams
Independent Expert
Nodus Capital TS Proprietary Limited
Legal Adviser to Apis
Cliffe Dekker Hofmeyr Inc.
Date: 12-03-2020 09:00:00
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