Wrap Text
Firm intention to acquire all/portion of shares in Peregrine, withdrawal of cautionary
PEREGRINE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1994/006026/06)
Share code: PGR ISIN: ZAE000078127
(“Peregrine” or “the company”)
JOINT FIRM INTENTION ANNOUNCEMENT IN RESPECT OF AN OFFER TO ACQUIRE
ALL OR A PORTION OF THE ISSUED ORDINARY SHARES IN PEREGRINE,
EXCLUDING SHARES HELD BY PEREGRINE’S SUBSIDIARIES, PROPOSED DELISTING
AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
1.1. Shareholders of Peregrine (“Peregrine Shareholders”) are referred to the initial
cautionary announcement released on the Stock Exchange News Service (“SENS”)
operated by the JSE Limited on 31 October 2019 (“Cautionary Announcement”), and
the subsequent renewals thereof released on SENS on 12 December 2019 and 29 January
2020, wherein Peregrine Shareholders were advised that Peregrine had received a non-
binding expression of interest for the acquisition of the entire share capital of the Company.
1.2. Peregrine Shareholders are further advised that on 12 March 2020 (“Signature Date”),
Peregrine entered into an implementation agreement (“Implementation Agreement”)
with Capitalworks Atlanta GP Proprietary Limited acting in its capacity as the general
partner of the Project Atlanta Investment Partnership III (“Capitalworks”), and two
special purpose companies, being Business Venture Investments No 2138 (RF) Proprietary
Limited (“BidCo”) and Business Venture Investments No 2137 (RF) Limited
(“InvestCo”), in terms of which BidCo and InvestCo (the “Offerors”) have agreed to
jointly make two separate but concurrent offers to acquire all or a portion of the issued
ordinary shares in Peregrine (“Peregrine Shares”), excluding the Peregrine Shares held
by Peregrine’s subsidiaries (“Offer Shares”), (collectively, the “Offer”).
1.3. The Offer will be implemented by way of:
1.3.1. a scheme of arrangement in terms of section 114(1) read with section 115 of the
Companies Act, No. 71 of 2008, as amended (“Companies Act”) and paragraph
1.17(b) of the JSE Limited Listings Requirements (“JSE Listings
Requirements”), between Peregrine and Peregrine Shareholders (“Scheme”);
and
1.3.2. a general offer by the Offerors to the holders of the Offer Shares (“Eligible
Shareholders”) in terms of section 117(1)(c)(v) of the Companies Act and
regulation 102 of the Companies Regulations, 2011 (“Regulations”), and in
terms of paragraph 1.15(c) of the JSE Listings Requirements and paragraph 4.14
of the A2X Proprietary Limited listing requirements (“A2X Requirements”),
conditional on the Scheme not becoming operative (“General Offer”).
1.4. The Scheme and the General Offer will be proposed concurrently on the basis that the
General Offer will only be implemented if the Scheme does not become operative. In the
event that the Scheme does become operative, the General Offer will lapse.
1.5. As consideration for the acquisition of an Offer Share pursuant to the Offer:
1.5.1. BidCo will offer Eligible Shareholders a cash consideration of R21.00 per Offer
Share, less the aggregate amount of any Distributions (as defined in the
Companies Act) per Peregrine Share which are declared by the Company on or
after the Signature Date and where the record date of such Distribution is on or
before the record date for Eligible Shareholders to participate in the Scheme or
the last day for Eligible Shareholders to accept the General Offer, as the case
may be (“Record Date”), (“Cash Consideration”); or
1.5.2. InvestCo will offer Eligible Shareholders a share consideration priced at R17.40
per Offer Share in terms of which Eligible Shareholders will receive one “A”
ordinary share in InvestCo (“InvestCo A Share”) or one “B” ordinary share in
InvestCo (“InvestCo B Share”), (collectively “InvestCo Shares”) per Offer
Share (“Share Consideration”),
(collectively or individually, as the context may require, the “Offer Consideration”).
Further details of the Offer Consideration are set out in paragraph 4.3 below. The Offerors
will be entitled to increase the Cash Consideration from time to time.
1.6. Simultaneously with the Offer, the delisting of all the Peregrine Shares from the main
board of the securities exchange operated by the JSE Limited (“JSE”) and the securities
exchange operated by A2X Proprietary Limited (“A2X”), will be proposed to Peregrine
Shareholders (“Delisting”).
1.7. The Scheme, the General Offer and Delisting (collectively or individually as the context
may require, the “Transaction”) will be subject to the fulfilment or waiver of the Offer
Conditions (as envisaged in paragraph 5 below).
1.8. The Independent Board (as defined in paragraph 13.1 below) and the board of directors of
Peregrine (“Peregrine Board”) are in support of the Transaction (as more fully set out in
paragraph 13 below).
2. RATIONALE FOR THE TRANSACTION
The Independent Board and Capitalworks believe that the following benefits, inter alia, can be
achieved through the implementation of the Transaction:
2.1. Eligible Shareholders that elect the Cash Consideration will be afforded an opportunity to
realise their investment in Peregrine at a significant premium to the volume weighted
average price (“VWAP”) at which a Peregrine Share traded on the JSE for the 30 trading
days up to and including (i) 30 October 2019, being the last trading day prior to the
publication of the Cautionary Announcement and (ii) 12 March 2020, being the last
trading day prior to the publication of this announcement.
2.2. The Share Consideration affords Eligible Shareholders who elect the Share Consideration
the opportunity to retain their exposure to Peregrine through InvestCo.
2.3. Peregrine and the Eligible Shareholders who receive the Share Consideration
(“Reinvesting Shareholders”) will benefit from the support of Capitalworks, through
BidCo, as a key anchor shareholder.
2.4. Senior employees of Citadel Holdings Proprietary Limited (“Citadel”) and its subsidiaries
(“Citadel Group”) will be appropriately incentivised to create value for all stakeholders
of Peregrine, BidCo and InvestCo (including Reinvesting Shareholders) through the New
Citadel Incentive Structure (as defined in paragraph 7 below).
2.5. The costs associated with maintaining a listing on the JSE and A2X will be eliminated.
3. INFORMATION ABOUT CAPITALWORKS AND THE OFFERORS
3.1. Capitalworks
3.1.1. The Capitalworks group is a leading private equity business based in
Johannesburg. The Capitalworks group operates on an independent basis (with
no connection to any bank or funder) and has approximately USD1 billion of
private equity funds under its management from leading international and
domestic investors. Investors include domestic and international institutional
investors, commercial banks, insurance companies, pension funds, family offices
and high net worth individuals.
3.1.2. The Capitalworks group invests in a diversified range of equity investments in
mid-market companies operating principally in South Africa on behalf of its
investors. The philosophy of the Capitalworks group is centred on building
exceptional businesses through partnering with leading entrepreneurs and
management teams. The active involvement, strategic input, operational support
and extensive relationships of the Capitalworks group team are directed, as
appropriate, towards maximising the potential of its investee businesses and
thereby benefiting all stakeholders.
3.2. InvestCo
3.2.1. InvestCo is a newly incorporated limited liability public company and is
currently wholly owned by Capitalworks.
3.2.2. InvestCo has not conducted any business since its incorporation. It is a special
purpose company incorporated for the purposes of (i) making the Offer, jointly
with BidCo; (ii) acquiring the relevant Offer Shares from Reinvesting
Shareholders, pursuant to the Offer; and (iii) holding ordinary shares in BidCo
(“BidCo Shares”) acquired pursuant to the Offer for the benefit of InvestCo’s
shareholders.
3.3. BidCo
3.3.1. BidCo is a newly incorporated limited liability private company and is currently
wholly owned by Capitalworks.
3.3.2. BidCo has not conducted any business since its incorporation. It is a special
purpose company incorporated for the purposes of (i) making the Offer, jointly
with InvestCo; (ii) acquiring the relevant Offer Shares from Offer Participants
(as defined in paragraph 4.3.6 below) that elect the Cash Consideration pursuant
to the Offer; and (iii) holding all the Offer Shares acquired pursuant to the Offer,
for the benefit of Capitalworks and InvestCo.
4. SALIENT TERMS OF THE OFFER
The Scheme and the General Offer each constitute an “affected transaction” as defined in sections
117(1)(c)(iii) and 117(1)(c)(v) of the Companies Act, respectively, and, as such, the Offer is
regulated by the Companies Act and the Regulations.
The salient terms and conditions of the Offer and other salient information pertaining to the Offer
are set out below.
4.1. Scheme
4.1.1. The Scheme will be proposed by the Peregrine Board, between Peregrine and
Peregrine Shareholders.
4.1.2. In the event that the Scheme becomes operative, the listing of all the Peregrine
Shares on the JSE and A2X will be terminated and each Eligible Shareholder
(excluding those Eligible Shareholders who validly exercise their appraisal rights
in accordance with section 164 of the Companies Act (“Appraisal Rights”) as a
consequence of the approval of the Scheme (“Dissenting Shareholders”) 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 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
Offer Shares to the Offerors at the Offer Consideration.
4.1.3. The Scheme will be subject to the fulfilment or waiver of the Offer Conditions
set out in paragraphs 5.1.1 and 5.1.2 below.
4.2. General Offer
4.2.1. Simultaneously with the Scheme, the Offerors will make the General Offer to all
Eligible Shareholders, whereby each Eligible Shareholder will be entitled to elect
whether or not to dispose of all or a portion of their Offer Shares to the Offerors
at the Offer Consideration.
4.2.2. If Eligible Shareholders wish to dispose of all or a portion of their Offer Shares
in terms of the General Offer, they will be required to accept the General Offer
and tender such Offer Shares to the Offerors (“Tender”).
4.2.3. Eligible Shareholders who do not wish to accept the General Offer in respect of
some or all of their Offer Shares will continue to hold such Offer Shares
(“Remaining Shareholders”), subject to the Scheme not becoming operative
and the provisions of section 124(1) of the Companies Act, as set out in
paragraph 4.2.6 below.
4.2.4. The General Offer will be subject to the fulfilment or waiver of the Offer
Conditions set out in paragraphs 5.1.1 and 5.1.3 below.
4.2.5. If the Scheme does not become operative and the General Offer becomes wholly
unconditional and the Delisting Resolution (as defined in paragraph 5.1.3.2
below) is passed, then the listing of all the Peregrine Shares on the JSE and A2X
will be terminated and each Eligible Shareholder that has accepted the General
Offer and Tendered Offer Shares held by them (“General Offer Participants”),
will receive the Offer Consideration for the Offer Shares Tendered and disposed
of, such that the Offerors will acquire all of the Offer Shares Tendered by the
General Offer Participants. In this instance, the Remaining Shareholders will
remain Peregrine Shareholders in the unlisted entity, and the tradability of their
Peregrine Shares will be limited.
4.2.6. In the event that the General Offer is implemented and is accepted by General
Offer Participants holding at least 90% of the Offer Shares, the Offerors may, at
their election, invoke the provisions of section 124(1) of the Companies Act, to
compulsorily acquire all of the Offer Shares held by the Remaining Shareholders.
4.3. Offer Consideration
4.3.1. The consideration that will be offered per Offer Share in terms of the Offer will
be the Cash Consideration or the Share Consideration.
4.3.2. Eligible Shareholders will be entitled to elect to receive either the Cash
Consideration or the Share Consideration, and in the case of the Share
Consideration, either InvestCo A Shares or InvestCo B Shares, or a combination
thereof in respect of their Offer Shares (“Election” or “Elect”). The Election of
the Share Consideration will be subject to the Deemed Cash Election (as defined
in paragraph 4.4 below) and Deemed InvestCo A Share Election (as defined in
paragraph 4.5 below).
4.3.3. With regards to the Share Consideration, the InvestCo A Shares and InvestCo B
Shares will have the same rights and restrictions and will rank pari passu in all
respects, save that, should Capitalworks dispose of all of its BidCo Shares, the
holders of InvestCo Shares will be entitled to decide whether they wish to exit
their shareholding in InvestCo and if they so elect, then –
4.3.3.1. the holders of the InvestCo B Shares will be entitled to receive a
Distribution from InvestCo in respect of their InvestCo B Shares in
an amount which is equivalent to the price per share at which
Capitalworks disposes of its BidCo Shares; and
4.3.3.2. the holders of InvestCo A Shares will be entitled to dispose of their
InvestCo A Shares at the equivalent price per share at which
Capitalworks disposes of its BidCo Shares.
4.3.4. The Share Consideration, comprising the InvestCo Shares, will be issued in
certificated form only and will not be listed on the JSE, A2X or any other
securities exchange. In the circumstances, the InvestCo Shares will have limited
tradability.
4.3.5. The table below illustrates the Cash Consideration premium and the Share
Consideration premium / discount:
Prior to the Share
Cautionary Cash Consideration
Announcement Consideration premium /
(30 October 2019) premium (discount)
Market price
(Note 1) R17.25 21.7% 0.9%
30 day
VWAP (Note
2) R17.55 19.7% (0.9%)
Share
Cash Consideration
As at Consideration premium /
(12 March 2020) premium (discount)
Market price
(Note 3) R17.20 22.1% 1.2%
30 day
VWAP (Note
4) R18.13 15.8% (4.0%)
Notes:
1. The “market price” represents the closing price of Peregrine Shares on the
JSE on 30 October 2019, being the last trading day prior to the publication
of the Cautionary Announcement.
2. The “30 day VWAP” represents the VWAP at which a Peregrine Share
traded on the JSE for the 30 trading days up to and including
30 October 2019, being the last trading day prior to the publication of the
Cautionary Announcement.
3. The “market price” represents the closing price of Peregrine Shares on the
JSE on 12 March 2020, being the last trading day prior to the publication of
this announcement on SENS.
4. The “30 day VWAP” represents the VWAP at which a Peregrine Share
traded on the JSE for the 30 trading days up to and including
12 March 2020, being the last trading day prior to the publication of this
announcement on SENS.
4.3.6. The tax implications of the Offer are dependent on the individual circumstances
of each Scheme Participant (if the Scheme becomes operative), alternatively,
each General Offer Participant (if the General Offer is implemented)
(collectively or individually as the context may require, the “Offer
Participants”) and the tax jurisdiction applicable to such Offer Participant. It is
recommended that the Offer Participants seek appropriate professional advice in
this regard.
4.4. Deemed Cash Election
To the extent that:
4.4.1. Eligible Shareholders Elect to receive the Share Consideration in respect of a
number of Offer Shares that would result in Capitalworks holding less than 35%
of all the BidCo Shares in issue (post implementation of the Offer, and after
taking into consideration the BidCo Shares issued pursuant to the InvestCo
Funding Subscription (as defined in paragraph 4.6.2.2 below), the Offer Share
Exchange (as defined in paragraph 10.2 below), the InvestCo LTIP 3
Subscription (as defined in paragraph 7.1.2 below) and the Nala Share Exchange
(as defined in paragraph 8.3 below)) (“Minimum Post Offer Shareholding”),
then the number of Offer Shares in respect of which Offer Participants have
Elected to receive the Share Consideration will be reduced pro rata to their
respective Share Consideration Elections and such Offer Participants will be
deemed to have Elected the Cash Consideration in respect of the balance of their
Offer Shares, such that Capitalworks will acquire the Minimum Post Offer
Shareholding;
4.4.2. an Offer Participant fails to, or does not, make a valid Election in respect of the
Offer Consideration, such Offer Participant shall be deemed to have Elected the
Cash Consideration in respect of the relevant Offer Shares (“Default Election”);
or
4.4.3. Peregrine Shareholders are resident or otherwise situated outside of South Africa,
such Peregrine Shareholders who are Offer Participants shall be deemed to have
Elected the Cash Consideration, subject to certain exceptions (which information
will be included in the Circular (as envisaged in paragraph 15.1 below)),
(collectively, the “Deemed Cash Election”).
4.5. Deemed InvestCo A Share Election
To the extent that:
4.5.1. Offer Participants Elect to receive InvestCo B Shares (“InvestCo B Share
Election”) in excess of 30 million InvestCo B Shares (after taking into account
the InvestCo B Shares issued pursuant to the LTIP 3 Replacement (as defined
under paragraph 7 below) and the Nala Acquisition (as defined in paragraph 8.2
below) (“Maximum Post Offer InvestCo B Shares”), then the number of Offer
Shares in respect of which Offer Participants have Elected to receive the
InvestCo B Shares will be reduced pro rata to their respective InvestCo B Share
Election, and such Offer Participants will be deemed to have Elected the
InvestCo A Shares in respect of the balance of their Offer Shares (which are the
subject of the InvestCo B Share Election), such that no more than the Maximum
Post Offer InvestCo B Shares are acquired by Offer Participants. To the extent
that the Deemed Cash Election has been implemented, the calculation of the
number of InvestCo B Share Elections made will be determined post
implementation of the Deemed Cash Election; or
4.5.2. an Offer Participant fails to or does not make a valid Election in respect of the
Share Consideration, subject to the Default Election, such Offer Participant shall
be deemed to have elected to receive an InvestCo A Share per Offer Share,
(collectively, the “Deemed InvestCo A Share Election”).
4.6. Funding of the Cash Consideration
4.6.1. The total funding requirement for the Offer is dependent upon the extent to which
Offer Participants Elect, or are deemed to have elected, the Cash Consideration
(“Total Cash Consideration”) and/or the level of acceptances (in the event of
the General Offer being implemented).
4.6.2. In order to enable BidCo to settle the Total Cash Consideration:
4.6.2.1. Capitalworks:
4.6.2.1.1. has procured funding for the Offerors from Nedbank
Limited (acting through its Nedbank Corporate and
Investment banking division) (“Nedbank”) in an
amount of up to approximately R2.9 billion
(“Funding”); and
4.6.2.1.2. will capitalise the Offerors by subscribing for BidCo
Shares, prior to implementation of the Offer, at a
subscription price equal to the value of the Share
Consideration per BidCo Share, for the balance of the
Total Cash Consideration.
4.6.2.2. Prior to the implementation of the Offer, InvestCo will use a portion
of the Funding to subscribe for BidCo Shares, at a subscription price
of R17.40 per BidCo Share, in order to enable BidCo to make
payment of a portion of the Total Cash Consideration (“InvestCo
Funding Subscription”). The number of BidCo Shares to be
subscribed for by InvestCo pursuant to the InvestCo Funding
Subscription will be calculated as the sum of the number of BidCo
Shares subscribed for by InvestCo (i) pursuant to the Offer Share
Exchange; (ii) pursuant to the InvestCo LTIP 3 Subscription; and (iii)
pursuant to the Nala Share Exchange, multiplied by 50% (rounded
down to the nearest whole number), provided that the number of
BidCo Shares to be subscribed for by InvestCo will be limited to
R525 million divided by R17.40 (rounded down to the nearest whole
number).
4.6.2.3. The InvestCo Funding Subscription will enable Reinvesting
Shareholders to obtain a larger see-through shareholding in Peregrine
via the Offerors.
4.7. Cash guarantee
In accordance with Regulations 111(4) and 111(5), Nedbank and FirstRand Bank Limited,
acting through its Rand Merchant Bank Division, have each issued a bank guarantee to the
Takeover Regulation Panel for the maximum Cash Consideration payable to Offer
Participants, amounting to approximately R3.7 billion. This amount was derived by taking
into account the Cash Consideration payable in respect of 175 220 672 Offer Shares, being
the maximum number of Offer Shares in respect of which the Cash Consideration may be
Elected after deducting the Offer Shares subject to the Minimum Share Consideration
Election (as defined in paragraph 5.1.1.1 below).
4.8. Confirmation of sufficient securities to settle the Share Consideration
Capitalworks confirms that InvestCo has sufficient authorised but unissued InvestCo A
Shares and InvestCo B Shares available to settle the Share Consideration to Offer
Participants.
5. OFFER CONDITIONS
5.1. The implementation of the Offer will be subject to the fulfilment or waiver of the following
conditions precedent:
5.1.1. in the case of the Scheme or the General Offer, as the case may be:
5.1.1.1. subject to the Deemed Cash Election, Eligible Shareholders Elect the
Share Consideration in respect of no less than 30 million Offer Shares
(“Minimum Share Consideration Election”);
5.1.1.2. the Nala Acquisition Agreement (as defined in paragraph 8.2 below)
becomes unconditional in accordance with its terms, save in relation
to the condition contained therein in relation to the Offer being
implemented;
5.1.1.3. the disposal by Stenham Group Limited of its entire shareholding in
Stenham Asset Management Holdings Limited (“SAM Holdings”)
to SAM Global Limited is implemented in accordance with the terms
of the relevant agreements; and
5.1.1.4. to the extent required pursuant to any material contracts to which a
member of the Peregrine group is a party, the written consent or
waiver of the relevant counterparties to such agreements to the
implementation of the Transaction.
5.1.2. in the case of the Scheme:
5.1.2.1. the approval of the Scheme by way of special resolution (“Scheme
Resolution”), adopted by the requisite majority of Peregrine
Shareholders at the general meeting of the Peregrine Shareholders
convened for purposes of considering and, if deemed fit, approving
the resolutions required to implement the Transaction or any
postponement or adjournment thereof, as contemplated in section
115(2)(a) of the Companies Act (“General Meeting”), and, in the
event of the provisions of section 115(2)(c) of the Companies Act
becoming applicable:
5.1.2.1.1. either (i) the High Court of South Africa approving the
implementation of the Scheme Resolution and no appeal
or review being timeously lodged or, if timeously
lodged, the appeal or review is not successful; or (ii) the
provisions of section 115(2)(c) of the Companies Act
cease to be applicable; and
5.1.2.1.2. if applicable, the Company not treating the Scheme
Resolution as a nullity as contemplated in section
115(5)(b) of the Companies Act; and
5.1.2.2. with regards to Peregrine Shareholders exercising their Appraisal
Rights (if any), either:
5.1.2.2.1. no Peregrine Shareholder gives notice objecting to the
Scheme Resolution as contemplated in section 164(3) of
the Companies Act, alternatively Peregrine
Shareholders give notice objecting to the Scheme
Resolution as contemplated in section 164(3) of the
Companies Act and vote against the Scheme Resolution
at the General Meeting, in respect of 1% or less of all of
the Offer Shares; or
5.1.2.2.2. if Peregrine Shareholders do give notice objecting to the
Scheme Resolution as contemplated in section 164(3) of
the Companies Act and vote against the Scheme
Resolution at the General Meeting in respect of more
than 1% of all of the Offer Shares, then Dissenting
Shareholders do not exercise Appraisal Rights, by
giving valid demands in terms of sections 164(5) to
164(8) of the Companies Act, in respect of more than
1% of all the Offer Shares; and
5.1.2.3. the receipt, on an unconditional basis (or on such conditions as may
be reasonably acceptable to the party negatively affected thereby), of
all approvals, consents, exemptions and/or waivers from those South
African and foreign regulatory authorities as may be necessary in
terms of any law to give effect to the Funding and implement the
Scheme,
(collectively, the “Scheme Conditions”).
5.1.3. in the case of the General Offer:
5.1.3.1. any of the Scheme Conditions are not timeously fulfilled or waived,
or, if the Scheme Conditions are fulfilled or waived, the Scheme does
not become operative timeously;
5.1.3.2. the approval of the Delisting by way of an ordinary resolution
(“Delisting Resolution”), adopted by the requisite majority of
Peregrine Shareholders at the General Meeting;
5.1.3.3. Eligible Shareholders accept the General Offer in respect of so many
Offer Shares as will result in the Offerors acquiring at least 45% of
the Offer Shares; and
5.1.3.4. the receipt, on an unconditional basis (or on such conditions as may
be reasonably acceptable to the party negatively affected thereby), of
all approvals, consents, exemptions and/or waivers from those South
African and foreign regulatory authorities as may be necessary in
terms of any law to give effect to the Funding and implement the
General Offer and Delisting.
The conditions precedent envisaged in paragraphs 5.1.1, 5.1.2 and 5.1.3 above shall
collectively hereinafter be referred to as the “Offer Conditions”.
5.2. The Offer Conditions envisaged in:
5.2.1. paragraphs 5.1.1, 5.1.2.2, 5.1.3.2 and 5.1.3.3 above are capable of waiver by the
Offerors, in whole or in part, by written notice to the Company; and
5.2.2. paragraphs 5.1.2.1, 5.1.2.3, 5.1.3.1 and 5.1.3.4 above shall not be capable of
waiver.
6. TERMINATION EVENTS
The Scheme and/or the General Offer will terminate with immediate effect, inter alia, upon the
occurrence of the following events:
6.1. if any Offer Condition, which may be waived by the Offerors, becomes incapable of
fulfilment, and the Offerors notify Peregrine in writing that they will not waive that Offer
Condition;
6.2. if any or all of the Offer Conditions have not been fulfilled or waived on or before the
relevant date/s for fulfilment or waiver;
6.3. upon written notice by Capitalworks and the Offerors to the Company, if the Company
declares and/or pays any Distribution in respect of Peregrine Shares after the Signature
Date and where the record date of such Distribution is on or before the Record Date;
6.4. upon written notice by Peregrine, Capitalworks and/or the Offerors to the other party/ies
(“Defaulting Party”), given before the Scheme or the General Offer, as the case may be,
becomes unconditional, if the Defaulting Party commits a breach of any material provision
of the Implementation Agreement, as detailed therein, and if such breach is capable of
remedy, the Defaulting Party fails to remedy such breach within 5 business days of receipt
of a notice by the Defaulting Party from another party requesting such remedy; or
6.5. on the business day following a written notice by Capitalworks and/or the Offerors to
Peregrine to such effect in the event that a “Material Adverse Change” (as such term is
defined in the Implementation Agreement) has occurred.
7. NEW CITADEL INCENTIVE STRUCTURE
Capitalworks recognises the importance of a motivated, aligned and engaged management team in
order to achieve growth and shareholder satisfaction. Accordingly, with effect from the Offer
becoming unconditional (i) the current long term incentive plan which was effective from April
2018 for the benefit of select senior management of the Citadel Group (“LTIP 3 Participants”),
(“LTIP 3”) will be replaced with a new incentive scheme (“LTIP 3 Replacement”); (ii) a new
long-term incentive plan will be implemented (“New LTIP”) and (iii) the current short-term cash
bonus scheme (“STIS”) will become subject to an adjustment (collectively referred to as the “New
Citadel Incentive Structure”), as detailed below.
7.1. LTIP 3 Replacement
7.1.1. Benefits under LTIP 3 automatically vest upon a change of control of Peregrine.
Subject to the Offer becoming wholly unconditional, LTIP 3 Participants have
agreed to exchange their entitlement to receive a cash payment as settlement
pursuant to the vesting of the LTIP 3 benefits (“LTIP 3 Cash Settlement”), for
shares in a newly established company (“ManCo”). The shares held by the LTIP
3 Participants in ManCo will be subject to employment-related restrictions as
well as disposal and encumbrance restrictions.
7.1.2. On implementation of the Offer, ManCo will utilise the LTIP 3 Cash Settlement
to subscribe for InvestCo B Shares at a price of R17.40 per InvestCo B Share
(“ManCo Subscription”). InvestCo will, in turn, utilise the proceeds received
pursuant to the ManCo Subscription to subscribe for BidCo Shares at a
subscription price of R17.40 per BidCo Share (“InvestCo LTIP 3
Subscription”).
7.2. New LTIP
7.2.1. The LTIP 3 Participants have agreed to waive their entitlement (if any) to
participate in 60% of the current 25% profit participation in the Citadel Group’s
operating profits (“Current Profit Participation”), with effect from the Offer
implementation date.
7.2.2. After Implementation of the Offer, the New LTIP will be established for the
benefit of select senior employees of the Citadel Group (“New LTIP
Participants”). In terms of the New LTIP, New LTIP Participants will acquire
new "A" ordinary shares in Citadel (“New LTIP Citadel Shares”) through a
new special purpose, ring-fenced, company (“Citadel InvestCo”). The shares
held by the New LTIP Participants in Citadel InvestCo will be subject to
employment-related restrictions as well as disposal and encumbrance
restrictions.
7.2.3. The New LTIP Citadel Shares will comprise 15% of the aggregate number of
Citadel shares in issue and will not be entitled to receive dividends until the
earlier of 5 years post implementation of the Offer and the date on which such
portion of the Offer funding as is notionally attributable to Citadel, has been
settled.
7.3. STIS
7.3.1. The STIS is currently funded from 40% of the Current Profit Participation.
7.3.2. Conditional on the Offer being implemented, the STIS will increase to 15% of
the Citadel Group’s operating profits from the earlier of (i) the fifth anniversary
of the implementation of the Offer; and (ii) upon Capitalworks’ complete
disposal of its indirect shareholding in the Citadel Group.
Further details regarding the New Citadel Incentive Structure will be disclosed in the Circular.
8. NALA ACQUISITION
8.1. Nala PGR SA Holdings Proprietary Limited (“Nala”) currently holds 20% of the issued
ordinary shares in Peregrine SA Holdings Proprietary Limited, with the remaining 80%
being held by Peregrine. Peregrine holds 30% of the issued shares in Nala, with the
remaining 70% being held by Nala Empowerment Investment Company Holdings
Proprietary Limited (“NEICH”).
8.2. NEICH and the Offerors have entered into a sale and purchase agreement (“Nala
Acquisition Agreement”) in terms of which, subject to, inter alia, the Offer being
implemented, the Offerors will acquire NEICH’s 70% shareholding in Nala (“Nala
Shares”) for a consideration settled through the issue by InvestCo of 9 022 989 InvestCo
B Shares and a cash payment by BidCo in an amount of R93 million (plus interest), a
portion of which may be deferred (the “Nala Acquisition”).
8.3. The Nala Shares acquired by InvestCo pursuant to the Nala Acquisition will be exchanged
for BidCo Shares in an amount equal to the number of InvestCo B Shares issued to NEICH
(“Nala Share Exchange”).
9. DELISTING
The listing of all the Peregrine Shares on the JSE and the A2X will be terminated pursuant to:
9.1. the Scheme becoming operative; or
9.2. the Delisting Resolution being approved by the requisite majority of Peregrine
Shareholders at the General Meeting and the General Offer being implemented.
10. BIDCO AND INVESTCO SHARE STRUCTURE
10.1. The share capital of BidCo will comprise of BidCo Shares and cumulative redeemable
non-convertible and non-participating preference shares (“BidCo Prefs”). Upon
implementation of the Offer, Capitalworks and InvestCo will hold all of the BidCo Shares
and Nedbank and one or more other lenders (the “Lenders”) will hold all of the BidCo
Prefs pursuant to the Funding.
10.2. The Offer Shares acquired by InvestCo pursuant to the Offer will be exchanged for BidCo
Shares on a one-for-one basis (“Offer Share Exchange”). In the circumstances:
10.2.1. the extent of InvestCo’s shareholding in BidCo is dependent on the quantum of
Offer Shares acquired by InvestCo pursuant to (i) the Share Consideration
Elections, (ii) the InvestCo Funding Subscription, (iii) the InvestCo LTIP 3
Subscription and (iv) the Nala Share Exchange; and
10.2.2. BidCo will hold all of the Offer Shares acquired by the Offerors pursuant to the
Offer.
10.3. The memorandum of incorporation of BidCo will contain various specially protected
matters, pre-emptive rights, tag along and drag along rights and other shareholder rights,
obligations and restrictions applicable to the holders of the BidCo Shares and BidCo Prefs.
10.4. The share capital of InvestCo will comprise of InvestCo A Shares, InvestCo B Shares,
cumulative redeemable non-convertible and non-participating preference shares
(“InvestCo Prefs”) and an N ordinary share, which share will be held by Capitalworks
and entitle Capitalworks to voting rights in respect of a resolution to approve certain
disposals by InvestCo and/or any member of the BidCo group (“N Share”) as more fully
set out in the memorandum of incorporation of InvestCo. Upon implementation of the
Offer, Reinvesting Shareholders will hold InvestCo A Shares and/or InvestCo B Shares;
ManCo and NEICH will hold InvestCo B Shares; Capitalworks will hold the N Share and
the Lenders and/or BidCo will hold the InvestCo Prefs.
10.5. The memorandum of incorporation of InvestCo will contain various specially protected
matters, pre-emptive rights, tag along and drag along rights and other shareholder rights,
obligations and restrictions applicable to the holders of the InvestCo Shares, InvestCo
Prefs and the N Share.
11. IRREVOCABLE UNDERTAKINGS
As at the date of this announcement, irrevocable undertakings have been obtained from Peregrine
Shareholders in terms of which (i) 37.8% of the Offer Shares are in support of the Offer; and (ii)
at least 6 920 610 Offer Shares will elect to receive the Share Consideration.
12. BENEFICIAL INTEREST
The Offerors have no beneficial interests, or options to purchase beneficial interests, in Peregrine
that are held or controlled, directly or indirectly by the Offerors or any parties acting in concert
with the Offerors.
13. INDEPENDENT BOARD, INDEPENDENT EXPERT REPORT AND
RECOMMENDATIONS
13.1. Peregrine has convened an independent board (“Independent Board”), comprised of
Steven Stein, Stefaan Sithole and Boitumelo Tlhabanelo, to consider the Offer and the
Offer Consideration.
13.2. The Independent Board and the Peregrine Board have appointed KPMG Services
Proprietary Limited as the independent expert (“Independent Expert”) for purposes of
preparing an opinion in respect of the Offer and the Offer Consideration in accordance
with Regulation 90, as read with sections 114(2) and 114(3) of the Companies Act;
paragraph 1.15(d) as read with Schedule 5 of the JSE Listings Requirements; and
paragraph 4.14.1 as read with paragraph 4.14.3.3 of the A2X Requirements (“Independent
Expert Report”). A preliminary Independent Expert Report (“Preliminary Independent
Expert Report”) has been prepared by the Independent Expert and a copy thereof has
been made available to the Independent Board and the Peregrine Board. The Independent
Expert has expressly informed the Independent Board that the Preliminary Independent
Expert Report is subject to changes and will be updated based on changes in market
conditions from the date of issue of the Preliminary Independent Expert Report to the date
of issue of the Independent Expert Report.
13.3. Having regard to the Preliminary Independent Expert Report:
13.3.1. the Independent Board is of the opinion that the Offer and the Cash Consideration
are fair and reasonable; and
13.3.2. the Peregrine Board is of the opinion that the Offer is fair in so far as the Eligible
Shareholders are concerned.
13.4. Accordingly, the Independent Board and the Peregrine Board recommend that Peregrine
Shareholders vote in favour of the Scheme Resolution and the Delisting Resolution and
that they accept the General Offer. Notwithstanding the aforegoing, in the event that the
Independent Expert withdraws or adversely amends, modifies or qualifies the content of
the Preliminary Independent Expert Report in the Independent Expert Report, the
Independent Board and the Peregrine Board may reconsider their respective opinions and
recommendations.
13.5. Pending receipt of the Independent Expert Report, the Independent Board and the
Peregrine Board are not yet in a position to express an opinion or make any
recommendations in regard to the Share Consideration.
13.6. The Independent Expert Report will be included in the Circular (as envisaged in paragraph
15 below).
14. PRO FORMA FINANCIAL INFORMATION
14.1. The tables below set out the pro forma financial effects of the Offer on an Offer Participant
who receives the Share Consideration.
14.2. The pro forma financial effects have been prepared for illustrative purposes only in order
to provide information on how the Offer may affect the financial performance and position
of an Offer Participant who receives the Share Consideration, by illustrating the effect
thereof on the basic and diluted earnings per share (“EPS”) and basic and diluted headline
earnings per share (“HEPS”) for both continuing and discontinued operations and the net
asset value per share (“NAVPS”) and tangible net asset value per share (“TNAVPS”) of
an Offer Share that an Offer Participant will be exchanging for the EPS, HEPS, NAVPS
and TNAVPS per one InvestCo A Share or one InvestCo B Share.
14.3. The pro forma financial effects have been prepared to illustrate the effect of the Offer on
an Offer Participant who receives the Share Consideration, had the Offer been
implemented on 1 April 2019 for purposes of EPS and HEPS and on 30 September 2019
for purposes of NAVPS and TNAVPS.
14.4. The pro forma financial effects set out below are the responsibility of the directors of
Peregrine, InvestCo and BidCo, and have not been reviewed or reported on by reporting
accountants or auditors. The pro forma financial effects are provided for illustrative
purposes only and because of their nature, may not fairly represent the financial
performance and position of an Offer Participant after the implementation of the Offer.
The pro forma financial effects have been prepared in accordance with International
Financial Reporting Standards (“IFRS”), the Guide on Pro forma Financial Information
issued by the South African Institute of Chartered Accountants and the JSE Listings
Requirements.
14.5. The pro forma financial effects have been presented in respect of the following scenarios:
14.5.1. Scenario 1: Offer Participants Elect to receive the Share Consideration in respect
of 30 million Offer Shares (being the Minimum Share Consideration Election).
14.5.2. Scenario 2: Offer Participants Elect to receive the Share Consideration in respect
of 41 055 316 Offer Shares (being the maximum Share Consideration Elections
that may be received before the Deemed Cash Election calculation is applied).
14.6. The following assumptions have been made for purposes of presenting the pro forma
financial effects of the Offer:
14.6.1. The Offerors acquire all the Offer Shares, amounting to 205 220 672 Peregrine
Shares, from Offer Participants.
14.6.2. Offer Participants Elect to receive:
14.6.2.1. in respect of Scenario 1:
14.6.2.1.1. the Share Consideration, in the form of InvestCo A
Shares only, in respect of 30 million Offer Shares,
resulting in 30 million InvestCo A Shares being issued
to Offer Participants; and
14.6.2.1.2. the Cash Consideration in respect of 175 220 672
Offer Shares, resulting in a total Cash Consideration
payable of approximately R3 680 million to Offer
Participants. A Cash Consideration of R21.00 per
Offer Share has been assumed.
14.6.2.2. in respect of Scenario 2:
14.6.2.2.1. the Share Consideration, in the form of InvestCo A
Shares only, in respect of 41 055 316 Offer Shares,
resulting in 41 055 316 InvestCo A Shares being issued
to Offer Participants; and
14.6.2.2.2. the Cash Consideration in respect of 164 165 356 Offer
Shares, resulting in a total Cash Consideration payable
of approximately R3 448 million to Offer Participants.
A Cash Consideration of R21.00 per Offer Share has
been assumed.
14.6.3. For purposes of capitalising BidCo in order to enable the settlement of the Cash
Consideration:
14.6.3.1. in respect of Scenario 1, of approximately R3 680 million by BidCo,
Capitalworks will subscribe for BidCo Shares at a price of R17.40
per BidCo Share, in addition to the R2 742 million received by BidCo
pursuant to the Funding.
14.6.3.2. in respect of Scenario 2, of approximately R3 448 million by BidCo,
Capitalworks will subscribe for BidCo Shares at a price of R17.40
per BidCo Share, in addition to the R2 838 million received by BidCo
pursuant to the Funding.
14.6.4. The Offer Shares acquired by InvestCo pursuant to the Offer will be exchanged
for BidCo Shares on a one-for-one basis, pursuant to the Offer Share Exchange.
14.6.5. The issue of 6 100 000 InvestCo B Shares, at R17.40 per InvestCo B Share, to
ManCo and the subscription by InvestCo for BidCo Shares, at a price of R17.40
per BidCo Share, pursuant to the LTIP 3 Replacement.
14.6.6. The issue by InvestCo of 9 022 989 InvestCo B Shares and a cash payment by
BidCo of R93 million (plus interest) to NEICH, and the exchange of the Nala
Shares by InvestCo for BidCo Shares, pursuant to the Nala Acquisition.
14.6.7. Estimated once-off transaction costs amounting to R14.0 million (in respect of
Scenario 1) and R14.8 million (in respect of Scenario 2) are payable by InvestCo.
BidCo will subscribe for InvestCo Prefs in order to fund InvestCo’s pro rata
portion of the costs incurred pursuant to the Funding. This loan is repayable in 5
years and will accrue interest at 117.5% of the prime rate and is accounted for as
debt.
14.6.8. InvestCo will be treated as an investment entity in terms of IFRS 10.
Accordingly, InvestCo accounts for its investment in BidCo at fair value through
profit or loss, does not consolidate any subsidiaries and does not apply IFRS 3
when it obtains control of the entity. The fair value of the investment in BidCo
amounts to the consideration paid by InvestCo for the BidCo Shares.
14.6.9. There are no other post balance sheet events which require adjustment, other than
those detailed herein.
14.6.10. All adjustments, with the exception of the once-off transaction costs, are
expected to have a continuing effect.
Pro forma financial effects of the Offer on an Offer Participant who receives the Share Consideration
Reported Adjusted, Scenario 1 Scenario 2
before the
Offer After the Offer After the Offer
InvestCo InvestCo Percentage Percentage InvestCo InvestCo Percentage Percentage
A Share B Share change in change in A Share B Share change in change in
respect of respect of respect of an respect of an
an InvestCo an InvestCo InvestCo A InvestCo B
A Share B Share Share Share
Actual Pro forma Pro forma Pro forma % % Pro forma Pro forma % %
Continuing operations
Basic EPS (cents) 78.0 95.5 (84.0) (84.0) (188%) (188%) (79.0) (79.0) (183%) (183%)
Diluted EPS (cents) 78.0 95.5 (84.0) (84.0) (188%) (188%) (79.0) (79.0) (183%) (183%)
Basic HEPS (cents) 78.0 67.5 (84.0) (84.0) (224%) (224%) (79.0) (79.0) (217%) (217%)
Diluted HEPS (cents) 78.0 67.5 (84.0) (84.0) (224%) (224%) (79.0) (79.0) (217%) (217%)
Discontinued operations
Basic EPS (cents) (0.2) (0.2) (84.0) (84.0) - - (79.0) (79.0) - -
Diluted EPS (cents) (0.2) (0.2) (84.0) (84.0) - - (79.0) (79.0) - -
Basic HEPS (cents) (0.2) (0.2) (84.0) (84.0) - - (79.0) (79.0) - -
Diluted HEPS (cents) (0.2) (0.2) (84.0) (84.0) - - (79.0) (79.0) - -
NAVPS (cents) 857.2 852.0 1 709.0 1 709.0 101% 101% 1 713.7 1 713.7 101% 101%
Reported Adjusted, Scenario 1 Scenario 2
before the
Offer After the Offer After the Offer
InvestCo InvestCo Percentage Percentage InvestCo InvestCo Percentage Percentage
A Share B Share change in change in A Share B Share change in change in
respect of respect of respect of an respect of an
an InvestCo an InvestCo InvestCo A InvestCo B
A Share B Share Share Share
Actual Pro forma Pro forma Pro forma % % Pro forma Pro forma % %
TNAVPS (cents) 579.8 638.4 1 709.0 1 709.0 168% 168% 1 713.7 1 713.7 168% 168%
Weighted average number of shares
in issue (‘000) 203 181 203 181 30 000 15 123 41 055 15 123
Number of shares in issue (‘000) 203 181 203 181 30 000 15 123 41 055 15 123
Notes:
1. The financial information in the “Reported” column has been derived, without adjustment,
from Peregrine’s unaudited consolidated interim financial statements for the six months
ended 30 September 2019. The weighted average number of Peregrine Shares in issue and
number of Peregrine Shares in issue reflects all Peregrine Shares in issue, amounting to
220 467 242 Peregrine Shares, less 15 246 570 Peregrine Shares held by subsidiaries and
2 012 792 and 26 533 Peregrine Shares held by the Citadel Holdings Limited Employee
Share Trust and the Peregrine Share Incentive Share Trust respectively.
2. The “Adjusted, before the Offer” column has been derived from the “Reported” column
adjusted for:
2.1 the disposal by Stenham Group Limited of its entire shareholding in SAM Holdings
to SAM Global Limited (“SAM Disposal”), being an Offer Condition, for
approximately GBP11.25 million (translated at the relevant exchange rate on 31
March 2019 for purposes of EPS and HEPS and on 30 September 2019 for purposes
of NAVPS and TNAVPS resulting in a capital loss of R6.7 million, offset by the
release of the estimated cumulative translation adjustment of R83.4 million as a result
of the deconsolidation of the foreign entity for statement of comprehensive income
purposes and for statement of financial position purposes a capital gain of R5.9
million. It is assumed that the proceeds are reinvested at an interest rate of 6.25%;
2.2 once-off transaction costs attributable to the Offer and which are payable by Peregrine
amounting to approximately R17.9 million; and
2.3 R9.2 million of costs pertaining to the accelerated vesting of Peregrine Shares in terms
of Peregrine’s long-term executive remuneration incentive scheme, as well as the
derecognition of a liability relating to the short-term incentive scheme of R6.4 million,
all of which, with the exception of the profit/loss relating to the SAM Disposal and once-
off transaction costs, are expected to have a continuing effect.
3. The financial information included in the “After the Offer” columns has been derived by
taking the InvestCo pro forma financial effects pursuant to the Offer (based on InvestCo’s
unaudited financial statements at incorporation, adjusted for the Offer based on the
assumptions detailed in paragraph 14.6 above), and multiplying these results by the
exchange ratio of one InvestCo Share for every one Offer Share, to provide pro forma
financial effects of the Offer on an Offer Participant who receives the Share Consideration,
presented separately for an InvestCo A Share and an InvestCo B Share.
4. The “Percentage change in respect of an InvestCo A Share” column compares the
“InvestCo A Share” column included in the “After the Offer” column with the “Adjusted,
before the Offer” column.
5. The “Percentage change in respect of an InvestCo B Share” column compares the
“InvestCo B Share” column included in the “After the Offer” column with the “Adjusted,
before the Offer” column.
15. CIRCULAR AND PROSPECTUS
15.1. Peregrine and the Offerors will issue a combined offer circular to Peregrine Shareholders,
as contemplated in Regulations 102 and 106, setting out the full terms and conditions of
the Scheme and the General Offer and including the notice convening the General Meeting
(“Circular”).
15.2. The Circular will be accompanied by a prospectus to be issued by InvestCo in accordance
with section 99 of the Companies Act and registered with the Companies and Intellectual
Property Commission, the purpose of which is to provide Peregrine Shareholders with
information regarding InvestCo (“Prospectus”).
15.3. The Circular, accompanied by the Prospectus, is expected to be posted on or about 14 April
2020. A further announcement pertaining to the posting of the Circular and Prospectus will
be released in due course.
15.4. Peregrine Shareholders are advised to refer to the Circular and the Prospectus for the full
terms and conditions of the Transaction.
16. OTHER IMPORTANT INFORMATION
Further details relating to the Transaction and the related salient dates and times will be published
on SENS in due course.
17. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Further to the Cautionary Announcement and the subsequent renewals thereof on 12 December
2019 and 29 January 2020, Peregrine Shareholders are advised that caution is no longer required
to be exercised when dealing in the Company’s securities.
18. THE INDEPENDENT BOARD AND PEREGRINE BOARD RESPONSIBILITY
STATEMENT
The Independent Board and Peregrine Board (to the extent that the information relates to Peregrine)
collectively and individually accept responsibility for the information contained in this
announcement and certify that, to the best of their knowledge and belief, the information contained
in this announcement relating to Peregrine is true and this announcement does not omit anything
that is likely to affect the import of such information.
19. CAPITALWORKS, BIDCO AND INVESTCO BOARD RESPONSIBILITY
STATEMENT
Capitalworks and the board of directors of InvestCo and BidCo (to the extent that the information
relates to Capitalworks, InvestCo and BidCo) collectively and individually accept responsibility
for the information contained in this announcement and certify that, to the best of their knowledge
and belief, the information contained in this announcement relating to Capitalworks, InvestCo and
BidCo is true and this announcement does not omit anything that is likely to affect the import of
such information.
13 March 2020
Joint sponsor and corporate advisor to Peregrine and the Independent Board
Java Capital
Attorneys to Peregrine and the Independent Board
Werksmans Inc.
Corporate advisor to Capitalworks, InvestCo and BidCo
One Capital Advisory Proprietary Limited
Attorneys to Capitalworks, InvestCo and BidCo
Cliffe Dekker Hofmeyr Inc.
Joint sponsor to Peregrine
Deloitte & Touche Sponsor Services (Proprietary) Limited
Independent expert
KPMG Services Proprietary Limited
Underwriter, Initial Mandated Lead Arranger, Facility Co-ordinator, Bookrunner and
Preference Share Agent to the Offerors
Nedbank Limited (acting through its Nedbank Corporate and Investment Banking division)
24
Disclaimer
This announcement shall not constitute an offer to sell or the solicitation of an offer to buy securities, nor shall there be
any sale of the securities described herein, in any jurisdiction, in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of such jurisdiction or without an exemption from the
registration or qualification requirements under the securities laws of such jurisdiction.
The distribution of this announcement in certain jurisdictions may be restricted by applicable law and therefore persons
in such jurisdictions into which this announcement is released, published or distributed should inform themselves about
and observe such restrictions.
In the European Economic Area (the "EEA"), this announcement is addressed only to and directed only at, persons in
member states who are "qualified investors" within the meaning of Article 2(e) of Regulation (EU) 2017/1129
("Qualified Investors"). In the United Kingdom, this announcement is being distributed only to, and is directed only at,
Qualified Investors who are: (i) persons who have professional experience in matters relating to investments falling
within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended
(the "Order"), (ii) high net worth entities falling within Article 49(2)(a) to (d) of the Order, and (iii) persons to whom it
may otherwise lawfully be communicated (all such persons together being referred to as "relevant persons"). This
announcement must not be acted on or relied on (i) in the United Kingdom, by persons who are not relevant persons,
and (ii) in any member state of the EEA, by persons who are not Qualified Investors. In the UK and EEA, any investment
or investment activity to which this announcement relates will be available only to (i) in the United Kingdom, relevant
persons, and (ii) in any member state of the EEA, Qualified Investors, and will be engaged in only with such persons.
Notice to US investors in Peregrine
The Offer relates to the shares of a South African company and is being made by means of a scheme of arrangement
provided for under South African company law. A transaction effected by means of a scheme of arrangement is not
subject to the tender offer or proxy solicitation rules under the US Securities Exchange Act of 1934 (the "US Exchange
Act"). Accordingly, the Offer is subject to the disclosure requirements and practices applicable in South Africa to
schemes of arrangement which differ from the disclosure requirements of the US tender offer and proxy solicitation
rules. The financial information included in this announcement has been prepared in accordance with accounting
standards applicable in South Africa and thus may not be comparable to financial information of US companies or
companies whose financial statements are prepared in accordance with generally accepted accounting principles in the
US.
If, in the future, BidCo exercises its right to implement the Offer by way of the General Offer, which is to be made into
the US, such Offer will be made in compliance with the applicable US laws and regulations, including Section 14(e)
and Regulation 14E under the US Exchange Act.
It may be difficult for US holders of Peregrine Shares to enforce their rights and any claim arising out of the US federal
laws, since Capitalworks, BidCo, InvestCo and Peregrine are located in a non-US jurisdiction, and some or all of their
officers and directors may be residents of a non-US jurisdiction. US holders of Peregrine Shares may not be able to sue
a non-US company or its officers or directors in a non-US court for violations of the US securities laws. Further, it may
be difficult to compel a non-US company and its affiliates to subject themselves to a US court's judgement.
Neither the US Securities and Exchange Commission nor any US state securities commission has approved or
disapproved of the acquisition, or determined if this announcement is accurate or complete. Any representation to the
contrary is a criminal offence in the US.
25
US Peregrine Shareholders also should be aware that the transaction contemplated herein may have tax consequences
in the US and, that such consequences, if any, are not described herein. US Peregrine Shareholders are urged to consult
with legal, tax and financial advisers in connection with making a decision regarding this transaction.
Forward-looking statements
The statements contained in this announcement that are not historical facts are “forward-looking” statements. These
forward-looking statements are subject to a number of substantial risks and uncertainties, many of which are beyond
the Company’s, Capitalworks’, InvestCo’s and BidCo’s control and actual results and developments may differ
materially from those expressed or implied by these statements for a variety of factors. These forward-looking statements
are statements based on the Company’s, Capitalworks’, InvestCo’s and BidCo’s current intentions, beliefs and
expectations about among other things, the Company’s results of operations, financial condition, prospects, growth,
strategies and the industry in which the Company operates. By their nature, forward-looking statements involve risks
and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future.
Many of these risks and uncertainties relate to factors that are beyond the Company’s, Capitalworks’, InvestCo’s and
BidCo’s ability to control or estimate precisely, such as changes in taxation, future market conditions, currency
fluctuations, the actions of governmental regulators and other risk factors. Such risks and uncertainties could cause
actual results to vary materially from the future results indicated, expressed or implied in such forward-looking
statements. The forward-looking statements contained in this announcement speak only as of the date of this
announcement and the Company, Capitalworks, InvestCo and BidCo undertake no duty to update any of them publicly
in light of new information or future events, except to the extent required by applicable law or the JSE Listings
Requirements.
No statement in this announcement is intended as a profit forecast or a profit estimate and no statement in this
announcement should be interpreted to mean that earnings per Peregrine Share for the current or future financial years
would necessarily match or exceed the historical published earnings per Peregrine Share. Prices and values of, and
income from, shares may go down as well as up and an investor may not get back the amount invested. It should be
noted that past performance is no guide to future performance. Persons needing advice should consult an independent
financial adviser.
Date: 13-03-2020 09:05:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
