Wrap Text
Joint Firm Intention Announcement
WORKFORCE HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number 2006/018145/06)
Share code: WKF ISIN: ZAE000087847
("Workforce" or "the Company")
FORCE HOLDINGS PROPRIETARY LIMITED
Incorporated in the Republic of South Africa
Registration number 1973/013522/07
("Force Holdings" or "the Offeror")
JOINT ANNOUNCEMENT OF FORCE HOLDINGS' FIRM INTENTION TO ACQUIRE THE ISSUED
ORDINARY SHARES IN WORKFORCE, SAVE FOR THOSE HELD BY FORCE HOLDINGS AND CERTAIN
EXCLUDED SHAREHOLDERS, BY WAY OF A SCHEME OF ARRANGEMENT AND THE SUBSEQUENT
DELISTING OF FORCE HOLDINGS FROM THE JSE LIMITED
1. INTRODUCTION
1.1 Shareholders of Workforce ("Workforce Shareholders" or "Shareholders") are advised that on
18 October 2024 ("Signature Date") Workforce and Force Holdings (the "Parties") entered into an
implementation agreement ("Implementation Agreement") in terms of which Force Holdings
agreed to express a firm intention to make an offer ("Force Holdings Offer") to acquire all of the
issued ordinary shares ("Workforce Shares" or "Shares") in the Company ("Issued Shares") from
Shareholders on the terms and conditions as will be set out in more detail in the scheme circular to
be sent to Workforce Shareholders containing full details of the Scheme ("Circular") save for:
1.1.1 111 216 111 Shares already directly owned by Force Holdings;
1.1.2 and those Workforce Shares held by certain Shareholders, which Force Holdings has
advised the Company, have agreed with Force Holdings to be excluded from the Force
Holdings Offer ("Excluded Shareholders"), which Shares comprise:
1.1.2.1 65 860 000 Shares owned and/or controlled by Little Kittens Investments
Proprietary Limited ("Little Kittens"), the entity through which the Chief
Executive Officer of Workforce, Ronald Stanley Katz, holds his indirect
beneficial interest in Workforce Shares;
1.1.2.2 42 900 000 Shares owned and/or controlled by Force Holdings' wholly owned
subsidiary, Verbicept Proprietary Limited ("Verbicept");
1.1.2.3 14 870 000 Shares owned by Force Holdings' wholly owned subsidiary, Pha
Phama Africa Investments Proprietary Limited ("Pha Phama"); and
1.1.2.4 2 159 707 Shares held by Workforce Staffing Proprietary Limited ("Treasury
Shares").
1.2 As at the Signature Date, the Excluded Shareholders collectively hold an aggregate of 125 789 707
Shares ("Excluded Shares"), representing 51.61% of the Issued Shares.
1.3 The Workforce Shares, excluding those referred to in paragraphs 1.1.1 and 1.1.2 above, equate to
6 725 525 Shares held by Shareholders eligible to participate in the Force Holdings Offer ("Eligible
Shareholders"), representing approximately 2.76% of the Issued Shares ("Eligible Shares").
2. MECHANICS OF THE FORCE HOLDINGS OFFER AND SCHEME OF ARRANGEMENT
2.1 The Force Holdings Offer will be implemented by way of a scheme of arrangement ("Scheme") in
terms of section 114(1) of the Companies Act, 2008 (Act 71 of 2008), as amended ("Companies
Act"), to be proposed by the Workforce board of directors ("Board") between Workforce and the
Eligible Shareholders in terms of which Eligible Shareholders will, if the Scheme becomes operative,
dispose of their Shares ("Scheme Shares") to Force Holdings for the Scheme Consideration (as
defined in paragraph 2.3 below).
2.2 The holders of the Workforce Shares referred to in paragraphs 1.1.1 and 1.1.2 above will not
participate in the Scheme and thus will not sell their Shares in terms thereof.
2.3 The consideration payable by Force Holdings to Eligible Shareholders participating in the Scheme
(each a "Scheme Participant") for the Scheme Shares shall be a cash amount equal to R1.65 (or
165 cents) per Scheme Share ("Scheme Consideration") acquired pursuant to the implementation
of the Scheme.
2.4 The Scheme Consideration represents a premium of 17% to the closing price of Workforce Shares,
and a premium of 16% premium to the 30-day volume-weighted average traded price of Workforce
Shares on the securities exchange operated by the JSE Limited ("JSE") of R1.41 and R1.42
respectively, as at 17 October 2024, being the last trading day prior to the Signature Date.
2.5 Pursuant to the approval of a special resolution by Eligible Shareholders to approve the Scheme
("Scheme Resolution") and the fulfillment and/or waiver (to the extent possible) of the Scheme
Conditions set out in paragraph 6.3 below ("Scheme Conditions"), application will be made by the
Company for the delisting of all of the Shares from the securities exchange ("Exchange") operated
by the JSE, in terms of paragraph 1.17(b) of the JSE Listings Requirements.
2.6 Should the Scheme become operative, Force Holdings will, on the date on which the Scheme is to
be implemented ("Scheme Implementation Date"), acquire all of the Scheme Shares from the
Scheme Participants (being the Eligible Shareholders but excluding the Dissenting Shareholders (if
any) as defined in paragraph 6.2.1.2 below) for the Scheme Consideration.
2.7 The purpose of this firm intention announcement is to inter alia advise the Workforce Shareholders
of the offer to the Eligible Shareholders by way of the Scheme as contemplated in Chapter 5 of the
Companies Act and Chapter 5 of the Companies Regulations promulgated under the Companies
Act (which includes the "Takeover Regulations" issued pursuant to sections 120 and 223 of the
Companies Act) ("Companies Regulations").
2.8 As required by the Companies Regulations, Workforce has constituted an independent board of
directors comprising of John Russel Macey, Kyansambo Ntombi Vundla and Shelley Thomas
("Independent Board") for purposes of evaluating the terms and conditions of the Scheme and
performing such other functions required of an independent board in terms of the Companies Act
and Companies Regulations.
3. OVERVIEW OF FORCE HOLDINGS
3.1 Force Holdings is an investment and property holding company.
3.2 The sole director of Force Holdings, Ronald Stanley Katz, who is however, not a shareholder of
Force Holdings, controls the exercise of more than 35% of the votes of Force Holdings.
3.3 The shares in Force Holdings are 100% owned by South Moulton Road Investment Limited, with
the ultimate beneficial shareholder being the Kore Foundation.
4. RATIONALE FOR THE SCHEME
4.1 Force Holdings holds, directly and indirectly, 69.33% of the Issued Shares, and if the Force
Holdings Offer is successfully implemented, Force Holdings, together with the Excluded
Shareholders, will own 100% of the Issued Shares.
4.2 The Workforce shares have not attracted significant investor interest resulting in the lack of a
meaningful rating or value appreciation in terms of share price. This has negated the possibility
and feasibility of Workforce using its shares as a means of payment consideration for mergers and
acquisitions, or as a mechanism to attract, retain and incentivise staff.
4.3 The compliance costs of Workforce maintaining its listing are material and difficult to justify given
the lack of investor interest referred to in 4.2 above.
4.4 The Scheme would also afford minority Workforce Shareholders the opportunity to exit their
investment in Workforce at a significant premium to the market price as detailed in paragraph 2.4
above.
5. OFFEROR ACTING AS PRINCIPAL AND PARTIES ACTING IN CONCERT
5.1 The Offeror is acting as principal and not as an agent in respect of the Scheme and is deemed to
be 'acting in concert' in terms of Companies Regulation 84 with the Excluded Shareholders
("Concert Parties") for purposes of the implementation of the Scheme.
5.2 In terms of section 115(4) of the Companies Act, the Concert Parties will not participate in the
Scheme, will not be entitled to vote on the Scheme Resolution, nor will their shareholding be taken
into account for the purposes of establishing a quorum at the general meeting of Workforce
Shareholders to be convened for purposes of, inter alia, approving the Scheme ("General Meeting").
6. SALIENT TERMS AND CONDITIONS OF THE SCHEME
6.1 General
6.1.1 The Scheme will constitute an "affected transaction" as defined in section 117(1)(c) of the
Companies Act. It will be implemented in accordance with the Companies Act and the
Companies Regulations and will be regulated by the Takeover Regulation Panel ("TRP").
6.1.2 The Scheme will be subject to the fulfilment or, where applicable, adjustment or waiver of
the Scheme Conditions.
6.2 The Scheme becoming operative and payment of the Scheme Consideration
6.2.1 If the Scheme becomes operative, Force Holdings will be deemed to have acquired all of
the Scheme Shares and will pay the Scheme Consideration to "Scheme Participants",
being:
6.2.1.1 all Eligible Shareholders recorded in the register of securities of Workforce in
order to be eligible to receive the Scheme Consideration ("Scheme
Consideration Record Date");
6.2.1.2 but excluding those Shareholders (if any) who validly exercise their appraisal
rights by giving written notice to the Company objecting in advance to the
Scheme Resolution prior to the General Meeting in accordance with section
164(3) of the Companies Act, voting against the Scheme Resolution and
demanding, in terms of section 164(5) and 164(8) of the Companies Act, that
the Company pay to them the value of their Shares ("Dissenting
Shareholders").
6.2.2 The Scheme Consideration shall be settled in full, in accordance with the terms of the
Scheme, without any lien, right of set-off, counterclaim or other analogous right to which
Force Holdings may otherwise be, or claim to be, entitled against a Scheme Participant.
6.2.3 Details regarding the settlement of the Scheme Consideration will be provided for in the
Circular.
6.3 Scheme Conditions
6.3.1 The Scheme and the implementation thereof will be subject to the fulfilment, or where
applicable, waiver or adjustment of each of the following Scheme Conditions:
6.3.1.1 the Independent Expert referred to in paragraph 11 below has issued an
opinion ("Fair and Reasonable Opinion") confirming the terms of the
Scheme and the Scheme Consideration as being fair and reasonable, unless
the Independent Board and Force Holdings have waived this Scheme Condition
in writing before or on the date of required fulfilment;
6.3.1.2 having regard to the Fair and Reasonable Opinion, the Independent Board has
resolved that it is of the opinion that the Scheme and the Scheme Consideration
are fair and reasonable and has resolved unconditionally to recommend to
Workforce Shareholders that they vote in favour of the Scheme Resolution,
unless the Independent Board and Force Holdings have waived this Scheme
Condition in writing before or on the date of required fulfilment;
6.3.1.3 the Circular has been approved by the JSE and the TRP;
6.3.1.4 the Scheme Resolution is approved by the requisite majority of Eligible
Shareholders, as contemplated by section 115(2) of the Companies Act, and in
the event of the provisions of section 115(2)(c) of the Companies Act becoming
applicable;
6.3.1.4.1 the High Court of South Africa ("Court") approves the
implementation of the relevant resolution; and
6.3.1.4.2 if applicable, Workforce not treating the aforesaid resolution as a
nullity, as contemplated in section 115(5)(b) of the Companies Act;
6.3.1.5 Eligible Shareholders holding 5% or more of the Scheme Shares do not
exercise their appraisal rights ("Appraisal Rights") by:
6.3.1.5.1 delivering notice objecting, as contemplated in section 164(3) of the
Companies Act, to the Scheme Resolution at the General Meeting;
6.3.1.5.2 voting against the Scheme Resolution; and
6.3.1.5.3 delivering a valid demand, as contemplated in sections 164(5) to
164(8) of the Companies Act, within the time period prescribed in
section 164(3) and (7) of the Companies Act,
unless the Independent Board and Force Holdings have waived this Scheme
Condition in writing before or on the date of required fulfilment;
6.3.1.6 the regulatory approvals required to implement the Scheme having been
obtained, namely:
6.3.1.6.1 the Financial Surveillance Department of the South African
Reserve Bank grants such approvals with respect to the Scheme
as are required in terms of the South African Exchange Control
Regulations (promulgated in terms of the South African Currency
and Exchanges Act No. 9 of 1933) to implement the Scheme either
unconditionally, or subject to conditions acceptable to Force
Holdings; and
6.3.1.6.2 the JSE grants such approvals as are required in terms of the JSE
Listings Requirements with respect to the Scheme; and
6.3.1.7 prior to the fulfilment or where applicable waiver of the last of the Scheme
Conditions in paragraphs 6.3.1.1 to 6.3.1.6, the Independent Board has not
withdrawn, modified or qualified its recommendation that Shareholders (who
are entitled to vote on the Scheme Resolution) vote in favour of the Scheme
Resolution and/or withdrawn, modified or qualified its opinion that the Scheme
Consideration is fair and reasonable to Shareholders, unless the Independent
Board and Force Holdings have waived this Scheme Condition in writing
before or on the date of required fulfilment.
6.3.2 In the event of the circumstances in section 115(3)(a) becoming potentially applicable by
reason of at least 15% of Scheme Participants having voted against the Scheme
Resolution, Workforce shall not be obliged to bring an application to Court as
contemplated in section 115(5)(a) unless:
6.3.2.1 Force Holdings, within one business day of any Scheme Participant who voted
against the Scheme Resolution requiring Workforce to seek Court approval
as contemplated in Section 115(5)(a) (or such later date as agreed in writing
by the Board) (i) confirms in writing to the Board that Force Holdings agrees
to an extension of the Second Long Stop Date (the Second Long Stop Date
being 30 April 2025) to no earlier than 30 June 2025 (or such other date as
may be agreed in writing by the Board); and (ii) delivers to the TRP a new
TRP Guarantee for the extended period as security for the payment of the
Scheme Consideration, if required, the TRP Guarantee having been issued
and delivered to the TRP and the TRP approved the new TRP Guarantee;
and
6.3.2.2 the Board has resolved to bring the application,
in which case the Board shall be entitled, at its election, to declare the Scheme Resolution
a nullity.
6.3.3 Each Party shall use its reasonable endeavours to procure the fulfilment or, where
applicable, waiver or adjustment of the Scheme Conditions as soon as reasonably
practicable.
6.3.4 The Scheme Conditions in paragraphs 6.3.1.1 to 6.3.1.3 must be fulfilled or, where waiver
or adjustment is permitted, waived or adjusted by no later than the First Long Stop Date
(the First Long Stop Date being 31 January 2025) and the Scheme Conditions in
paragraphs 6.3.1.4 to 6.3.1.7 must be fulfilled or, where waiver or adjustment is
permitted, waived or adjusted by no later than the Second Long Stop Date. Workforce
and Force Holdings shall be entitled to extend the First Long Stop Date and/or the
Second Long Stop Date by written agreement and subject to TRP approval insofar as
necessary. If the First Long Stop Date or the Second Long Stop Date is extended, the
amended date will be released on SENS and, if required, published in the South African
press.
6.3.5 The Scheme Conditions in paragraphs 6.3.1.3, 6.3.1.4 and 6.3.1.6 are regulatory in
nature and cannot be waived.
6.3.6 Neither Force Holdings nor Workforce may waive or vary any other Scheme Condition
unless that waiver is agreed to in writing by both Workforce and Force Holdings and is
permissible in law (or unless specifically provided for in the Implementation Agreement).
6.3.7 The Scheme will not be implemented unless the TRP has issued a compliance certificate
to Workforce with respect to the Scheme in terms of section 121(b) of the Companies
Act.
7. RIGHT TO MATCH
7.1 Without limiting the provisions of section 126(1)(a) of the Companies Act, Workforce shall not, in
respect of any Superior Proposal, being a bona fide written alternative proposal received by
Workforce from an unsolicited third party ("Alternative Offer") that would in the opinion of the
Independent Board (acting in good faith and in the exercise of their fiduciary and statutory duties
(having taken written advice from external advisors): (a) is reasonably capable of being
implemented, taking into account, inter alia, all financial, regulatory and/or financing aspects of the
alternative offer, including its suspensive conditions; and (b), if implemented in accordance with its
terms, result in a transaction more favourable to Shareholders than the Force Holdings Offer taking
into account the terms and conditions set out in (a) above of the Alternative Offer), enter into any
agreement to effect same, unless:
7.1.1 Force Holdings has been provided with a copy of the document containing such Superior
Proposal (with such deletions as are necessary to protect any confidential portions of
such document, provided that the material terms and conditions thereof, and the identity
of the person making such Superior Proposal, may not be deleted), together with details
of the principal reasons as to why the Independent Board considers the Superior
Proposal if implemented in accordance with its terms to be a more favourable transaction
to the Eligible Shareholders than the Force Holdings Offer, in order to afford Force
Holdings the right to match or better the Superior Proposal;
7.1.2 ten business days have elapsed from the date on which Force Holdings has received a
copy of the document contemplated in paragraph 7.1.1 above and Force Holdings has
not made a revised binding offer with a new Scheme Consideration and/or other terms
and/or proposing any other form of alternative transaction ("New Force Holdings Offer")
such that the New Force Holdings Offer would, if completed substantially in accordance
with the terms thereof, be equal or more favourable than the Superior Proposal; and
7.1.3 the Superior Proposal has been received by Workforce prior to the fulfilment or, where
capable, waiver of the last Scheme Condition; and
7.1.4 Workforce terminates the Implementation Agreement as contemplated in paragraph 7.3
below.
7.2 Upon receipt of the New Force Holdings Offer, the Board and the Independent Board must review
the terms thereof in good faith. If the Board and the Independent Board determine that the New
Force Holdings Offer would be equal to or more (or no less) favourable than the Superior Proposal,
then the Parties must use their reasonable endeavours to agree the amendments to the
Implementation Agreement that are reasonably necessary to reflect the New Force Holdings Offer
and to enter into an addendum to the Implementation Agreement and/or supplement the Circular,
to implement and give effect to the New Force Holdings Offer including the recommendations to
support the New Force Holdings Offer and not the Superior Proposal.
7.3 If a Superior Proposal is received by Workforce and/or the Independent Board and if Force
Holdings has not within the ten business days period contemplated in paragraph 7.1.2 above (or
such additional period of time as may be agreed in writing by the Parties) submitted a New Force
Holdings Offer together with a revised guarantee to the TRP approved by the TRP:
7.3.1 the Independent Board shall be entitled to withdraw or modify its recommendation in
respect of the Force Holdings Offer; and
7.3.2 Workforce shall be entitled to elect not to be bound to the Implementation Agreement for
purposes of the Force Holdings Offer and terminate the Implementation Agreement.
8. TRP GUARANTEE
In accordance with regulation 111(4)(a) and 111(5) of the Companies Regulations, Force Holdings has
provided the TRP with an irrevocable bank guarantee issued by ABSA Bank Limited in respect of a
guaranteed amount which is sufficient to satisfy the payment of the maximum Scheme Consideration,
being an amount of R11 300 262.60.
9. INTERESTS OF OFFEROR AND OFFEROR DIRECTORS IN WORKFORCE SHARES
9.1 The Offeror holds, directly and indirectly, 168 986 111 Shares representing 69.33% of the Issued
Shares.
9.2 The sole director of the Offeror, Ronald Stanley Katz, who is not a shareholder of Force Holdings,
controls the exercise of more than 35% of the votes of Force Holdings.
9.3 Ronald Stanley Katz has an indirect beneficial interest in Workforce Shares, holding 65 860 000
Shares through Little Kittens.
9.4 Save for the indirect acquisition by Force Holdings of 14 870 000 Shares at R1.65 per share on
14 October 2024 and the direct acquisition of 11 880 570 Shares at R1.65 per share on 18 April
2024, the Offeror has not had any dealings in Workforce Shares during the six-month period prior
to the Signature Date.
9.5 The Offeror's director has not had any dealings in Workforce Shares during the six-month period
prior to the Signature Date.
9.6 Little Kittens, Pha Phama and Verbicept each act in concert (as defined in the Companies Act)
with Force Holdings in respect of the Force Holdings Offer and commenced to act in concert as
aforesaid on 18 October 2024. Since commencing to act in concert with Force Holdings in respect
of the Force Holdings Offer, Little Kittens, Pha Phama and Verbicept have not had any dealings
in Workforce Shares.
10. IRREVOCABLE UNDERTAKINGS
As at the date of this announcement, irrevocable undertakings have been obtained to vote in favour of
the Scheme Resolution by the following Shareholders, who collectively hold 32.71% of the Shares held
by Eligible Shareholders:
Shareholder Number of Shares Shares held as a %
held of the Scheme
directly/indirectly Shares
Esther Serebro 597 893 8.89
Philip Froom 339 147 5.04
Carol Knoetze 290 622 4.32
Steven Herscovitz 287 578 4.28
Flagship Asset Management Proprietary Limited 180 018 2.68
Ahmed Varachia 146 996 2.19
Warwick Du Preez 100 000 1.49
Diane Wright 92 642 1.38
Jacques Farmer 90 000 1.34
Arnold Cigler 75 000 1.12
Total 2 199 896 32.71
11. INDEPENDENT EXPERT AND FAIR AND REASONABLE OPINION
11.1 The Independent Board has appointed Nodus Capital TS Proprietary Limited as the independent
expert, as required in terms of section 114(2) of the Companies Act and the Companies
Regulations ("Independent Expert"), to issue an opinion dealing with the matters set out in
sections 114(2) and 114(3) of the Companies Act and regulations 90, 110(1) and 113(1)(a) of the
Companies Regulations, to express an opinion on whether the Scheme Consideration is fair and
reasonable to Eligible Shareholders ("Fair and Reasonable Opinion").
11.2 The full report of the Independent Expert in connection with the Scheme will be included in the
Circular to be distributed to Shareholders in due course.
12. DISTRIBUTION OF THE CIRCULAR
The Circular providing full details of the Scheme and containing, inter alia, the Fair and Reasonable
Opinion, the opinion and recommendations of the Independent Board, the salient dates and times
relating to the Scheme, a notice to convene the General Meeting, a form of proxy and other necessary
forms to give effect to the Scheme, will be distributed to Workforce Shareholders on or about
Wednesday, 13 November 2024.
13. RESPONSIBILITY STATEMENTS
13.1 The Independent Board (to the extent that the information relates to Workforce) 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 Workforce is true and this announcement does not omit anything that is likely to affect
the importance of such information.
13.2 The board of directors of Force Holdings (to the extent that the information relates to Force
Holdings and the Excluded Shareholders) 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 Force Holdings is true and
this announcement does not omit anything that is likely to affect the importance of such
information.
Johannesburg
21 October 2024
Corporate Advisor and Transaction Sponsor to Workforce
Merchantec Capital
Legal Advisor to Workforce
Webber Wentzel
Legal Advisor to Force Holdings
ENS
Independent Expert
Nodus Capital TS
Date: 21-10-2024 04:55:00
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