The Scheme will, subject to the fulfilment of the condition referred to in paragraph 3 below, be proposed by the Imperial board of directors ("Imperial Board") in terms of section 114 of the South African Companies Act, No. 71 of 2008 ("Companies Act") and, upon implementation of the Scheme, DP World will pay an estimated aggregate Scheme Consideration to Imperial Ordinary Shareholders of ZAR 12,729,101,022; provided that, if Imperial: (a) has undertaken (or undertakes) a capital reduction; or (b) has declared, paid or made (or declares, pays or makes) a distribution, dividend or similar payment, in each case to or for the benefit of any Imperial Ordinary Shareholders (a "Distribution") between 1 January 2021 and the date that the Scheme is implemented (other than in respect of the interim ordinary dividend of ZAR 0.83 per Imperial Ordinary Share declared by Imperial on 23 February 2021), the Scheme Consideration shall be automatically reduced by an amount equal to the amount of such Distribution in respect of each Imperial Ordinary Share, it being noted that no such Distribution is contemplated.
The Scheme Consideration represents a premium of approximately:
- 39.5% to the closing price of Imperial Ordinary Shares traded on JSE Limited ("JSE") of ZAR 47.30 as at 7 July 2021;
- 4.2% to the 30-day volume weighted average price ("VWAP") of Imperial Ordinary Shares traded on the exchange operated by the JSE of approximately ZAR 49.18 calculated as at 7 July 2021; and
- 35.2% to the 3-month VWAP of Imperial Ordinary Shares traded on the exchange operated by the JSE of approximately ZAR 48.82 calculated as at 7 July 2021.
- Upon implementation of the Scheme, DP World will own all of the Imperial Ordinary Shares and, consequently:
-Imperial's American Depository Receipt ("ADR") programme will be terminated.
Condition to the posting of the circular
The posting of a circular to Imperial Ordinary Shareholders in respect of the Scheme ("Circular") is subject to the fulfilment of the suspensive condition that, by not later than 23:59 on 10 August 2021 (or such extended or later date as provided for in the TIA), Imperial shall have obtained the approval of each of the JSE, the Takeover Regulation Panel ("TRP") and the Financial Surveillance Department of the South African Reserve Bank for the posting of the Circular.
The Circular is expected to be posted to Imperial Ordinary Shareholders on or before 10 August 2021 and will include further details of the Scheme and the notice of general meeting to be held for the purposes of, inter alia, considering and, if deemed fit, passing the special resolution required to approve the Scheme and other resolutions ancillary to the Proposed Transaction ("Scheme Meeting"). The salient dates in relation to the Scheme will be published at or about the time of posting of the Circular.
Conditions to the implementation of the scheme
The implementation of the Scheme will be subject to the suspensive conditions ("Scheme Conditions") that, by not later than 23:59 on the 210th day after the date of publication of this announcement on SENS (or such extended or later date as provided for in the TIA) ("Scheme Cut-off Date"):
-the special resolution of the Imperial Ordinary Shareholders which approves the Scheme shall have been approved by the Imperial Ordinary Shareholders as required by section 115(2)(a) of the Companies Act ("Scheme Resolution");
-if required by section 115(3) of the Companies Act, Imperial shall have obtained the approval of a court to proceed with the implementation of the Scheme Resolution. In order to establish whether such approval is required, if less than 15% of the votes exercised on the Scheme Resolution were opposed to the Scheme Resolution, Imperial shall not implement the Scheme Resolution until either:
- the period of 10 business days (as such term is defined in section 115(3)(b) of the Companies Act) has elapsed since the vote without any Imperial Ordinary Shareholder who opposed the Scheme Resolution applying for leave to apply to a court for a review of the Proposed Transaction; or
- if any such application is made by such an Imperial Ordinary Shareholder, such application is unsuccessful (and Imperial shall promptly use best endeavours to oppose any such application).
If such approval of a court is required, Imperial shall promptly use best endeavours to obtain such approval and shall not treat the Scheme Resolution as a nullity, as contemplated in section 115(5)(b) of the Companies Act;
- the TRP shall have issued a compliance certificate in relation to the Proposed Transaction and, to the extent that the Scheme Condition referred to in paragraph 4.1.8 below has not been waived in accordance with the TIA, the Ukhamba Offer (as defined in paragraph 8.2 below) ("TRP Compliance Certificate Condition");
- the South African competition authorities established in terms of the Competition Act, No. 89 of 1998 shall have approved the Proposed Transaction on terms and conditions (if any) that DP World has confirmed in writing to Imperial are satisfactory to DP World, acting in its sole discretion;
- all other competition and other regulatory approvals, clearances or non-oppositions which have been agreed upon by DP World and Imperial, or which DP World has confirmed in writing to Imperial, to be required for the implementation of the Proposed Transaction shall have been obtained (or, where applicable, deemed to have been obtained), in each case, on terms and conditions (if any) that DP World has confirmed in writing to Imperial are satisfactory to DP World, acting in its sole discretion;
- either:
-if paragraph 4.1.6(a) is not satisfied, then, within the time period permitted in terms of the Companies Act, a Shareholder (or Shareholders) holding more than 5% of all of the Imperial Ordinary Shares has or have (as applicable) not exercised appraisal rights by giving valid demands in terms of sections 164(5) to 164(8) of the Companies Act;
- the B-BBEE Transaction shall have become unconditional and been implemented by the parties thereto, in each case in accordance with its terms;
- the sale of the Imperial Deferred Shares (as defined in paragraph 8.1 below) by Ukhamba Holdings Proprietary Limited (RF) ("Ukhamba") to DP World that will arise from Ukhamba's acceptance of the Ukhamba Offer (as defined in paragraph 8.2 below) shall have become unconditional in accordance with its terms, save for any condition requiring that the Scheme becomes operative; and
- the TIA shall not have been terminated in accordance with its terms prior to the time at which all of the other Scheme Conditions have been fulfilled or, if applicable, waived in accordance with the TIA.
- DP World and Imperial shall use their reasonable commercial endeavours to procure the fulfilment of the Scheme Conditions and to achieve the implementation of the Scheme. However, this does not oblige DP World to accept any terms or conditions in connection with the grant of a competition or other regulatory approval, clearance or non-opposition for the purposes of the Scheme Conditions referred to in paragraphs 4.1.4 and 4.1.5 above.
- If any Scheme Condition is not fulfilled or, if applicable, waived in accordance with the TIA on or before the Scheme Cut-off Date, the Scheme shall lapse and not become effective and the TIA (other than the provisions which survive its termination) will terminate with immediate effect.
ADR Holders
Holders of Imperial's ADRs will be entitled to vote on the Proposed Transaction as provided for under the terms of the deposit agreement between those holders, Imperial and the Bank of New York Mellon ("ADR Depositary") dated 26 June 1996. The ADR Depository will provide further details to the ADR holders in relation to voting on the Scheme in due course. Upon implementation of the Scheme, the Imperial Ordinary Shares represented by the ADRs will be acquired by DP World and the Scheme Consideration will be payable to ADR holders, following which Imperial's ADR programme will be terminated.
Cash confirmation
In compliance with regulations 111(4) and 111(5) of the Companies Regulations, 2011 which were published in terms of the Companies Act (the "Companies Regulations"), the TRP has been provided with a written irrevocable confirmation from Deutsche Bank (in a form approved by the TRP) that sufficient cash is held in escrow for the payment of the aggregate Scheme Consideration and the Ukhamba Consideration (as defined in paragraph 8.2 below). Such cash has been funded to DP World by the DP World Parent.
Ukhamba offer
- At the date of this announcement, Ukhamba holds 5,204,953 deferred ordinary shares of ZAR 0.04 each ("Imperial Deferred Shares") in the issued share capital of Imperial, which are the only deferred ordinary shares in the issued share capital of Imperial.
- DP World has therefore made to Ukhamba, and Ukhamba has accepted, a comparable offer ("Ukhamba Offer") to purchase all of the Imperial Deferred Shares from Ukhamba for an aggregate price of ZAR 219,507,816 ("Ukhamba Consideration"), such aggregate amount being calculated by multiplying ZAR 66 by the number of Imperial Deferred Shares which are capable of being converted into Imperial Ordinary Shares.
- The sale arising from the acceptance of the Ukhamba Offer is subject to the following suspensive conditions:
-the shareholders of Ukhamba shall have passed such resolutions as may be necessary to amend Ukhamba's memorandum of incorporation ("MOI") to the extent necessary to authorise Ukhamba to dispose of the Imperial Deferred Shares pursuant to the Ukhamba Offer, and such resolutions shall have been filed with the Companies and Intellectual Property Commission; and
-the shareholders of Imperial shall have passed such resolutions as may be necessary to amend the memorandum of incorporation of Imperial to permit the transfer of the Imperial Deferred Shares to DP World, and such resolutions shall have been filed with the Companies and Intellectual Property Commission.
- Ukhamba has also given to DP World an irrevocable undertaking to vote in favour of the Scheme Resolution, which undertaking is also subject to Ukhamba's MOI being amended to the extent necessary to authorise that vote by Ukhamba.
Long-term incentive schemes
- Imperial currently has three long-term incentive schemes in place, namely a deferred bonus plan ("DBP"), a share appreciation rights scheme ("SARS") and a conditional share plan ("CSP").
- All rights under the DBP will have vested prior to the implementation of the Scheme and participants in the DBP will accordingly acquire Imperial Ordinary Shares that may be acquired in terms of the Scheme.
- Certain of the rights granted under the CSP and SARS will, subject to the fulfilment of performance conditions, vest prior to the implementation of the Scheme and then either be settled in:
-cash at the Scheme Consideration as soon as reasonably possible after the Scheme has been implemented.
- The Imperial Board has resolved to apply the rules of the CSP and the SARS to the rights granted under the CSP and SARS which have not vested prior to the implementation of the Scheme ("Unvested Rights") and accordingly:
-use its discretion by determining that 65.17% (in value) of the time pro-rated portion of those Unvested Rights referred to in paragraph 9.4.1 will be settled in cash as soon as possible after implementation of the Scheme ("Accelerated Rights") whilst the remaining 34.83% (in value) of those aforementioned Unvested Rights will lapse.
- In accordance with the CSP and the SARS, Unvested Rights that do not become Accelerated Rights and that do not lapse will remain subject to the CSP and SARS ("Remaining Rights"), but the rules of the CSP and the SARS will be amended, among other things, to take into account the Delisting after implementation of the Scheme, and provide that the Remaining Rights will be cash settled at the Scheme Consideration.
- As a result of the aforegoing, no comparable offer will be extended by DP World for any vested rights referred to in paragraph 9.2 and 9.3 above, Unvested Rights, Accelerated Rights or Remaining Rights.
