Wrap Text
Announcement of Mazor's firm intention to make an offer to the Mazor shareholders to repurchase their Mazor shares
Mazor Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 2007/017221/06)
Share code: MZR
ISIN: ZAE000109823
(“Mazor” or “the Company”)
ANNOUNCEMENT OF MAZOR'S FIRM INTENTION TO MAKE AN OFFER TO THE MAZOR SHAREHOLDERS TO REPURCHASE THEIR MAZOR SHARES BY WAY OF A SCHEME OF ARRANGEMENT, OR IF THE SCHEME OF ARRANGEMENT FAILS, OF RONEN MAZOR'S FIRM INTENTION TO MAKE A GENERAL OFFER TO PURCHASE THOSE MAZOR SHARES IN ISSUE NOT ALREADY HELD BY HIM, AND THE PROPOSED DELISTING OF MAZOR FROM THE JSE
1. INTRODUCTION
The shareholders of Mazor are advised that:
* the Company has resolved to propose a scheme of arrangement in terms of section 114 of the Companies Act, No. 71 of 2008 as amended (the “Companies Act”) (the "Scheme") between the Company and its shareholders (each a "Shareholder"), in terms of which:
* the Company shall offer to repurchase from its Shareholders all of the Mazor ordinary shares held by such Shareholders (each a "Share") for a cash consideration of R0.25 per Share so repurchased ("Repurchase Consideration"), in accordance with the provisions of section 48 of the Companies Act (the "Repurchase Offer"); and
* each participant in the Scheme ("Scheme Participant") shall be entitled to elect to (i) accept the Company's Repurchase Offer in respect of such Scheme Participant's Shares (the "Repurchase Option") or (ii) reject the Company's Repurchase Offer and retain such Scheme Participant's Shares (the "Retention Option"), provided that if no election is made by a Scheme Participant in accordance with the terms of the Scheme, such Scheme Participant will be deemed to have elected the Repurchase Option;
* the Company has received a notice of firm intention from Ronen Mazor ("General Offeror") to make a general offer (the "General Offer"), as contemplated in section 117(1)(c)(v) of the Companies Act, to acquire all the Shares not held by the General Offeror (the "General Offer Shares") from the holders thereof (each a "General Offeree") for a cash consideration of R0.25 per General Offer Share so acquired ("General Offer Consideration"). The General Offer will be made separately to but concurrently with the Scheme and will be conditional upon, inter alia, the Scheme not becoming operative. The General Offer will constitute an offer as contemplated in paragraph 1.15(c) of the JSE Listings Requirements; and
* the Company has resolved to propose the delisting of all Shares from the stock exchange operated by the JSE Limited (“JSE”) in terms of paragraph 1.14 of the JSE Listings Requirements (the “Delisting”) pursuant to the provisions of paragraphs 1.15 and 1.16 of the JSE Listings Requirements being complied with. The Delisting will be conditional upon either the Scheme becoming operative or the General Offer being implemented and each of the Scheme and the General Offer will be conditional on, inter alia, the Delisting being approved in terms of paragraph 1.14 of the JSE Listings Requirements.
2. RATIONALE FOR THE SCHEME AND THE DELISTING
The Board believes that the Company has not experienced material benefits from being in the listed environment, having not garnered sufficient institutional shareholder support to justify the limitations imposed by the regulatory processes and the compliance costs and other costs associated with and incidental to being a listed entity and a participant in the regulated markets environment. Moreover, the Company considers the lack of liquidity of Mazor securities to be a disincentive for new investors and a hinderance on existing shareholders' ability to realise their investment in Mazor in the market, meaning that, from a shareholder perspective, the costs associated with Mazor being in the listed environment outweigh the benefit of being able to publicly trade in Mazor securities.
The Company has therefore decided to propose the Delisting in order to enable management of Mazor to dedicate more time and resources to the performance of the business of Mazor without dedicating time, expenses and resources to regulatory requirements and processes associated with being a listed entity.
The Company has decided to make the Repurchase Offer, by way of the proposed Scheme, for the purpose of repurchasing all the Shares held by Scheme Participants who do not elect to remain invested in the Company after the implementation of the Scheme and the Delisting. The Repurchase Offer provides Shareholders with an opportunity to realise their investment in Mazor by facilitating an exit in respect of a relatively illiquid security. Moreover, given the proposed Delisting, the Repurchase Offer provides an exit opportunity for Shareholders that do not wish to or are unable to remain invested in an unlisted entity.
The General Offeror has informed the Board of its firm intention to extend the General Offer to Shareholders, to afford Shareholders the same opportunity to realise their investment in Mazor should the Delisting be approved, but the Scheme does not become operative.
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, 2011, promulgated under the Companies Act (“Companies Regulations”). The Repurchase Offer also constitutes an “offer” as contemplated in section 1.15(c) of the JSE Listings Requirements. 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 as an arrangement between Mazor and the Shareholders, in terms whereof the Company will make an offer to repurchase from the Shareholders their Shares for a consideration per Share equal to the Repurchase Consideration, which Repurchase Consideration will be settled in cash.
3.1.2 Scheme Participants will, in terms of the Scheme, be entitled to elect the Repurchase Option or the Retention Option, provided that in the event that a Scheme Participant fails to make such an election in accordance with the terms of the Scheme, such Scheme Participant will be deemed to have elected the Repurchase Option.
3.1.3 All Shareholders, excluding (i) those Scheme Participants that have validly elected the Retention Option and (ii) those Shareholders that 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 the relevant High Court to withdraw their demands in terms of section 164(15)(c)(v)(aa) of the Companies Act, will be deemed to have disposed of all of their Shares to Mazor for a consideration per Share equal to the Repurchase Consideration, such that (i) Mazor will acquire all of the Shares previously held by those Scheme Participants electing, whether by actual or deemed election, the Repurchase Option and (ii) Scheme Participants electing the Retention Option will retain their Shares.
3.1.4 With effect from the Scheme becoming operative, the listing of all of the Shares on the JSE will be terminated pursuant to the Delisting.
3.1.5 The Scheme will be subject to the fulfilment or waiver, as applicable, of the conditions precedent set out in paragraph 3.3 below.
3.2 Scheme consideration
The Scheme Participants electing, whether by way of actual or deemed election, the Repurchase Option shall receive the Repurchase Consideration, in the amount of R0.25 per Share disposed by such Scheme Participant pursuant to the Scheme, to be settled in cash.
3.3 Conditions precedent to the Scheme
The implementation of the Scheme is subject to the fulfilment or waiver, as the case may be, of, inter alia, the following salient conditions precedent (“Scheme Conditions”):
3.3.1 the approval by the applicable majority of Shareholders of the shareholder resolution/s required to implement the Scheme is/are obtained at a general meeting of the Shareholders to be held on or about 28 December 2020 (“General Meeting”), in terms of the Companies Act and/or the JSE Listings Requirements;
3.3.2 approval by the Shareholders of an ordinary resolution to approve the Delisting in terms of paragraphs 1.15(a) and 1.16 of the JSE Listings Requirements (“Delisting Resolution”);
3.3.3 to the extent required under section 115(3) of the Companies Act, approval by the court of the implementation of the special resolution contemplated in section 115(2) of the Companies Act in terms of which the Shareholders approved the Scheme (the “Scheme Resolution”) is obtained, and Mazor not having treated the Scheme Resolution as a nullity in terms of section 115(5)(b) of the Companies Act;
3.3.4 as at 12h00 on the business day immediately following the last day on which a valid demand may be made by Shareholder in respect of the Scheme in terms of section 164(7) of the Companies Act, Mazor has not received valid demands from Shareholder/s holding in aggregate more than 2% of all the issued Shares; and
3.3.5 all approvals, consents and/or waivers from the applicable South African regulatory authorities as may be required in order for the Scheme and the Delisting to be implemented have been obtained, including, but not limited to the Takeover Regulation Panel (“TRP”) (in terms of the compliance certificate to be issued in terms of the Companies Act in relation to the Scheme) and the JSE,
(collectively the “Scheme Conditions”).
Mazor shall be entitled to waive (in whole or in part) in writing any one or more of the Scheme Conditions stipulated in paragraphs 3.3.2 and 3.3.4. The remaining Scheme Conditions stipulated above are not capable of waiver. The time and/or date for fulfilment or waiver of the Scheme Conditions may be extended by the Company as may be agreed in writing between the Company and the TRP.
3.4 Termination events
The Scheme shall terminate and cease with immediate effect only as follows:
3.4.1 if any Scheme Condition, which may be waived by Mazor, becomes incapable of fulfilment and Mazor 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.
3.5 Each of Liat Mazor, Ronen Mazor, Shlomo Mazor, Doba Judith Mazor, the trustees for the time being of the Ati Trust and Zomar Proprietary Limited (collectively the “Excluded Shareholders”) will be excluded from voting on the Scheme Resolution. Mazor Aluminium (Pty) Ltd (“Mazor Aluminium”), a wholly-owned subsidiary of Mazor and the registered holder of 4 444 714 treasury shares, will by virtue of section 48(2)(b)(ii) of the Companies Act not be entitled to exercise the voting rights attaching to those treasury shares on the Scheme Resolution. Such Excluded Shareholders and Mazor Aluminium will, notwithstanding their exclusion from the entitlement to vote on the Scheme Resolution, be entitled to participate in the Scheme should the Scheme become operative. As set out in more detail in paragraph 6.1.3 below, each of the Excluded Shareholders and Mazor Aluminium have undertaken to elect the Retention Option in terms of the Scheme.
4. TERMS AND CONDITIONS OF THE GENERAL OFFER
Simultaneously with the Scheme, the General Offeror will make a concurrent but separate General Offer to the General Offerees to acquire all the General Offer Shares, in terms of which each General Offeree will be entitled to elect whether or not to dispose of all of its General Offer Shares to the General Offeror for a consideration per General Offer Share equal to the General Offer Consideration.
The General Offer constitutes an “affected transaction” as defined in section 117(1)(v) of the Companies Act and as such the General Offer is regulated by the Companies Act and the Companies Regulations. The General Offer also constitutes an “offer” as contemplated in section 1.15(c) of the JSE Listings Requirements.
The salient terms of and other information pertaining to the General Offer are set out below:
4.1 Terms of the General Offer
4.1.1 The General Offer will be conditional on, inter alia, the Scheme not becoming operative, on the following basis:
4.1.1.1 In the event that the Scheme becomes operative, the General Offer will thereupon immediately lapse and be of no force and effect; or
4.1.1.2 If the Scheme does not become operative, and all the remaining conditions precedent to the General Offer are fulfilled or waived, as applicable, then the General Offer will become operative and will be implemented in accordance with its terms.
4.1.2 The General Offer is not subject to a minimum number of acceptances by the General Offerees.
4.1.3 If the General Offer becomes wholly unconditional and is implemented, then the listing of all the Shares on the JSE will be terminated pursuant to the Delisting, and each General Offeree that has accepted the General Offer (“General Offer Participant”) will dispose of its General Offer Shares to the General Offeror and as consideration therefor receive the General Offer Consideration. General Offerees who have not accepted the General Offer, subject to the provisions of section 124(1) of the Companies Act as set out below, will remain shareholders in Mazor, on the basis that Mazor will become an unlisted entity pursuant to the implementation of the Delisting, and the tradability of their Mazor Shares will be limited.
4.1.4 In the event that the General Offer is implemented and accepted by such number of Shareholders holding at least 90% of the General Offer Shares, excluding the Shares held by the General Offeror, his related or inter-related persons, and persons acting in concert, the General Offeror may, at his 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 applicable General Offerees pursuant to the General Offer.
4.2 The General Offer Consideration
General Offer Participants shall receive the General Offer Consideration, in the amount of R0.25 per General Offer Share disposed of by such General Offer Participant in terms of the General Offer.
4.3 The General Offer Conditions
Implementation of the General Offer is subject to the fulfilment or waiver, as the case may be, of the following conditions:
4.3.1 the Scheme has not become operative;
4.3.2 approval by the Shareholders of the Delisting Resolution in terms of paragraphs 1.15(a) and 1.16 of the JSE Listings Requirements has been obtained; and
4.3.3 all approvals, consents and/or waivers from the applicable South African regulatory authorities as may be required in order for the General Offer and the Delisting to be implemented have been obtained,
(the “General Offer Conditions”).
The General Offer Condition set out in paragraph 4.3.2 is capable of waiver by the General Offeror. The remainder of the General Offer Conditions are not capable of waiver. The time and/or date for fulfilment of any General Offer Condition may be extended by the General Offeror from time to time as may be agreed in writing between the General Offeror and the TRP.
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.
4.4 Termination Events
The General Offer will terminate with immediate effect, if any or all of the General Offer Conditions have not been fulfilled or waived, as applicable, on or before the relevant date/s for fulfilment or waiver.
5 THE DELISTING
5.1 The Delisting will occur pursuant to the Scheme becoming operative or the General Offer being implemented, as the case may be.
5.2 The effect of the Delisting will be that all Shares will be removed from the list of securities admitted to trading by the JSE.
5.3 The Delisting will be implemented subject to the fulfilment of the following conditions precedent:
5.3.1 The Delisting being approved by the JSE in terms of paragraph 1.14 of the JSE Listings Requirements;
5.3.2 The Delisting Resolution being approved by the requisite majority of those Shareholders eligible to vote on the Delisting Resolution at the General Meeting in accordance with paragraphs 1.15(a) and 1.16 of the JSE Listings Requirements; and
5.3.3 Either the –
5.3.3.1 Scheme becoming operative; or
5.3.3.2 the General Offer being implemented.
6 IRREVOCABLE UNDERTAKINGS
6.1 The Scheme and General Offer
6.1.1 The Company has procured irrevocable undertakings from Shareholders holding 48.33% of the voting rights entitled to be exercised in respect of the Scheme Resolution.
6.1.2 Each of the Shareholders set out in the table below have undertaken to vote in favour of all the resolutions required to implement the Scheme, including the Scheme Resolution:
Shareholder
Number of shares
% of total issued share capital*
% of voting rights entitled to be exercised in respect of the resolution required to approve the Scheme
Yonbor Nominees Proprietary Limited
12,512,132
11.44%
48.33%
Total
12,512,132
11.44%
48.33%
* Based on 109 351 442 Shares in issue as at the last practicable date prior to the date of this announcement. There are 4 444 714 Shares held by Mazor Aluminium as treasury shares included in the total issued shares of 109 351 442.
6.1.3 Each of the Shareholders set out in the table below, including the Excluded Shareholders and Mazor Aluminium, have, in respect of all their shareholding in Mazor, undertaken to (i) elect the Retention Option in terms of the Scheme and (ii) reject the General Offer in respect of all of their Shares, and accordingly will retain their investment in Mazor pursuant to the Scheme becoming operative or the General Offer being implemented, as the case may be:
Shareholder
Number of shares
% of total issued share capital*
DJ Mazor
23 215 103
21.23%
Zomar Proprietary Limited
19 000 000
17.38%
L Mazor
14 000 000
12.80%
Ati Trust
10 000 000
9.14%
S Mazor
7 469 231
6.83%
R Mazor
5 337 604
4.88%
Mazor Aluminium
4 444 714
4.06%
Total
83 466 652
76.32%
* Based on 109 351 442 Shares in issue as at the last practicable date prior to the date of this announcement. There are 4 444 714 Shares held by Mazor Aluminium as treasury shares included in the total issued shares of 109 351 442.
6.1.4 Based on the irrevocable undertakings detailed in paragraph 6.1.3 above:
6.1.4.1 the maximum aggregate number of Shares which may be repurchased by the Company under the Scheme for the Repurchase Consideration will be 25 884 790 Shares (“Repurchase Shares”), and therefore the maximum aggregate cash consideration payable by the Company in terms of the Scheme is R6 471 197.50 (“Maximum Repurchase Consideration”); and
6.1.4.2 the maximum aggregate number of Shares which may be purchased by the General Offeror under the General Offer for the General Offer Consideration will be 25 884 790 Shares, and therefore the maximum aggregate cash consideration payable by the General Offeror in terms of the General Offer is R6 471 197.50 (“Maximum General Offer Consideration”).
6.2 The Delisting
6.2.1 The Company has procured irrevocable undertakings from Shareholders holding 83.7% of the voting rights entitled to be exercised in respect of the Delisting Resolution.
6.2.2 Each of the Shareholders set out in the table below have undertaken to vote in favour of all the resolutions required to implement the Delisting, including the Delisting Resolution:
Shareholder
Number of shares
% of total issued share capital*
L Mazor
14 000 000
12.80
S Mazor
7 469 231
6.83
R Mazor
5 337 604
4.88
DJ Mazor
23 215 103
21.23
Ati Trust
10 000 000
9.14
Zomar Proprietary Limited
19 000 000
17.38
Yonbor Nominees Proprietary Limited
12,512,132
11.44
Total
91,534,070
83.7
* Based on 109 351 442 Shares in issue as at the last practicable date prior to the date of this announcement. There are 4 444 714 Shares held by Mazor Aluminium as treasury shares included in the total issued shares of 109 351 442.
6.2.3 The number of votes in favour of the Delisting Resolution secured by way of the irrevocable undertakings detailed in paragraph 6.2.2 is sufficient to approve the Delisting Resolution and ensure that the requirements contemplated in paragraph 1.15(a) and 1.16 of the JSE Listings Requirements are satisfied.
7 SOLVENCY AND LIQUIDITY
The Board has applied the solvency and liquidity test contemplated section 4 of the Companies Act and has reasonably concluded that Mazor will, immediately after completing the repurchase by Mazor of the Repurchase Shares in terms of the Scheme, satisfy such solvency and liquidity test.
8 INDEPENDENT BOARD, INDEPENDENT EXPERT REPORT AND RECOMMENDATIONS
8.1 As required in terms of the Companies Regulations, the Board has constituted an independent board (“Independent Board”) for the purposes of considering, inter alia, the terms and conditions of each of the Scheme and the General Offer advising Shareholders thereon. The Independent Board comprises Messrs Frank Boner, Allan Groll and Monty Kaplan.
8.2 The Independent Board has, in accordance with section 114(2) of the Companies Act and regulation 90 of the Companies Act Regulations, appointed Letsema Corporate Finance Proprietary Limited (“Independent Expert”) as the independent expert to provide it with the independent expert report prepared in accordance with regulation 90(6) of the Companies Regulations in respect of the Scheme as required in terms of section 114(3) of the Companies Act as well as to provide an independent fairness opinion in respect of each of the Scheme and the General Offer, in terms of and in accordance with paragraph 1.15(d) of the JSE Listings Requirements as read with Schedule 5 thereto. The full substance of the Independent Expert's report in respect of the Scheme and the General Offer, once prepared, will be more fully set out in the circular to be posted to Eligible Shareholders as referred to in paragraph 12.
9 RESPONSIBILITY STATEMENTS
The Board and the Independent Board each accept responsibility for the information contained in this announcement insofar as it relates to Mazor, the Scheme and the 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.
The General Offeror accepts responsibility for the information contained in this announcement insofar as it relates to the General Offeror, the General Offer and the Delisting. To the best of his 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:
10.1 Mazor has obtained and delivered to the TRP an irrevocable cash confirmation in respect of the Maximum Repurchase Consideration issued by Cliffe Dekker Hofmeyr Inc.; and
10.2 the General Offeror has obtained and delivered to the TRP an irrevocable unconditional bank guarantee issued by Investec Limited for the Maximum General Offer Consideration.
11 GENERAL
11.1 Each of Liat Mazor, Ronen Mazor and Shlomo Mazor is, by virtue of their directorship on the Board, presumed to be acting in concert with the Company in terms of regulation 84(1)(a) of the Companies Regulations and will not seek to rebut this presumption for the purposes of implementing the Scheme.
11.2 Each of the Ati Trust and Zomar Proprietary Limited is presumed to be acting in concert with the Company in terms of regulation 84(1)(a) of the Companies Regulations and will not seek to rebut this presumption for the purposes of implementing the Scheme.
11.3 The beneficial interests in Shares held by the abovementioned Excluded Shareholders are set out in paragraph 6.1.3 above.
12 POSTING OF THE CIRCULAR
Further details of the Scheme, General Offer and the Delisting will be included in a circular to Shareholders (the “Circular”), which will contain, inter alia, the Independent Expert’s opinion and the recommendation of the Independent Board, the terms of the Scheme, General Offer, pertinent dates relating to the Scheme and General Offer, a notice of the General Meeting, a form of proxy and a form of election, surrender and transfer in respect of the Scheme. The Circular is expected to be posted on or about 25 November 2020. The salient dates in relation to the Scheme, General Offer and the Delisting will be published on SENS and in the press at the time of posting of the Circular. Shareholders are advised to refer to the Circular for the full terms of and conditions of, including related salient dates and times, the Scheme, the General Offer and the Delisting.
Cape Town
3 November 2020
Corporate Advisor & Sponsor: Bridge Capital Advisors Proprietary Limited
Legal Advisor: Cliffe Dekker Hofmeyr Inc.
Date: 03-11-2020 10:45:00
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