Clover Industries enters into an Implementation Agreement
Clover Industries Limited has entered into an implementation agreement with Milco SA Proprietary Limited ("Milco"), in terms of which Milco will make an offer to acquire all of the issued shares in Clover (on a fully diluted basis, such that thereafter there will be no remaining rights exercisable or convertible into shares) ("Clover Shares"), by way of a scheme of arrangement ("Scheme") in terms of section 114 of the Companies Act, No.71 of 2008, as amended ("Companies Act") between Clover and the Shareholders. The amount payable in terms of the Scheme will be a cash consideration of R25.00 per Clover Share ("Scheme Consideration"), subject to the terms set out in paragraph 5 below. Clover has established an independent board of directors ("Independent Board") for purposes of the Scheme and related matters (the "Transaction"), including, evaluating the terms and conditions of the Scheme and advising Shareholders thereon as required by the Regulations promulgated under the Companies Act ("Companies Regulations"). The Independent Board comprises Dr. Steve Booysen (as lead independent director), Dr. Whitey Basson, Ms. Neo Mokhesi, Mr. Flemming Morgan and Ms. Babalwa Ngonyama. Pursuant to paragraph 1.17(b) of the JSE Listings Requirements, all the Clover Shares will be delisted from the Main Board of the JSE and the Namibian Stock Exchange ("NSX") pursuant to the implementation of the Scheme ("Delisting"). The purpose of this joint firm intention announcement ("FIA") is to, inter alia, advise Shareholders of the terms and conditions of the Transaction. 2. INFORMATION ABOUT CLOVER Clover is a leading and competitive branded consumer goods and products group operating in South Africa and select African countries reaching a wide range of consumers with a range of quality value-added dairy and non-dairy products. Clover has one of the largest ambient and chilled distribution networks in Southern Africa. The Company?s segments include: dairy fluids, dairy concentrated products, ingredients, non-alcoholic beverages, fermented products and other products. Clover's footprint extends across South Africa and sub-Saharan Africa, with the Company employing over 8,500 employees. 3. INFORMATION ABOUT MILCO Milco has been formed to act as the Offeror in the proposed Scheme. Immediately following the Scheme operative date, the shareholding of Milco will be held as follows: - c.78.7% by Milco Mauritius International Limited, a Mauritian holding company, the Milco shareholding of which will, in turn, be effectively held c.59.5% by International Beer Breweries Limited ("IBBL"), c.8.3% by IncuBev Limited ("IncuBev") and c.10.9% by Ploughshare Investments Limited ("Ploughshare"); - 15% by Brimstone Investment Corporation Limited ("Brimstone"); and - c.6.3% by the executive management of Clover ("Management").
4. RATIONALE FOR THE TRANSACTION Milco believes that Clover presents a uniquely attractive investment given its expansive chilled distribution capability, strong market position for key brands and an experienced management team. Milco, which brings extensive knowledge of the dairy, juice and non-alcoholic beverage industries, has the technical and research ability to bring healthier food to consumers, access to international brands, and connections and operating experience in sub-Saharan businesses, in addition to its proven commercial and trade abilities. Milco intends to combine its capabilities with those of Clover to unlock value through key strategic initiatives, primarily aimed at accelerating sales, distribution and efficiency opportunities within Clover?s product portfolio in South Africa, with expansion into select sub-Saharan Africa territories. Clover Industries Limited is a branded foods and beverages group, listed on the main board of the Johannesburg Stock Exchange.