A Consortium of investors, through Newco, has indicated a firm intention to make an offer to acquire all the issued and to be issued Shares in Barloworld, other than those held by the Excluded Shareholders, for cash, by way of a Scheme or a Standby Offer.
Newco is proposing a transaction that unlocks substantial value for the Scheme Participants at an offer price of R120.00 per Share which will not be reduced for the R3.10 per Share dividend that was recently declared by Barloworld on Friday, 22 November 2024 as set out in the Barloworld SENS announcement dated Monday, 25 November 2024. Refer to the announcement for defined terms and further details.
Notes from The Finance Ghost:
This is a complex transaction. If you are a Barloworld shareholder, you should read the full announcement, which Barloworld has placed in Ghost Mail in an effort to help shareholders understand the transaction.
Here are some important points that I believe you should be aware of:
- A scheme of arrangement is a mechanism whereby the decision of shareholders who vote on the transaction is binding on all shareholders. In other words, if the deal is approved by 75% of shareholders at the general meeting and it meets all other conditions, then all shareholders will be forced to sell at the scheme price.
- There is a general standby offer, which means Newco is willing to acquire shares at this price even if the scheme of arrangement is not approved and doesn’t go ahead.
- There are a number of important conditions for the scheme, including material adverse change clauses. It is not a guarantee that the deal will go ahead, even if the scheme is approved by shareholders.
- The independent board has already appointed Rothschild & Co to act as independent expert. The expert has opined that the terms are fair and reasonable to shareholders. Based on this, the independent board intends to recommend that shareholders vote in favour of the scheme.
This is just a small selection of the many important terms of the deal and is not intended to replace a review by shareholders of the announcement and subsequent circular.
