EXECUTIVE SUMMARY OF THE AUTHORITY OF THE PANEL AND TAKEOVER REGULATIONS WITH REFERENCE TO AFFECTED TRANSACTIONS

Background

The “Panel” is the Takeover Regulation Panel established in terms of the Companies Act, 2008 (“the Companies Act”).

The Panel is, inter alia, responsible to regulate “affected transactions” and “offers” to the extent provided for in the Companies Act and the Takeover Regulations.

The Takeover Regulations are the regulations made by the Minister of Trade and Industry in accordance with the Companies Act.

Executive Summary

Any person making an “offer” must –

(i)   comply with all the reporting or approval requirements as stipulated by the applicable provisions of the Companies Act

      or as stipulated in the Takeover Regulations, unless the Panel has granted such person an exemption; and

(ii)  not give effect to an “affected transaction” unless the Panel has –

(a)  issued a compliance certificate with respect to the transaction; or

(b)  granted an exemption for that transaction.

An “offer” is defined as “when used as a noun, means a proposal of any sort, including a partial offer, which, if accepted,would result in an affected transaction other than such a transaction that is exempt in terms of section 118 (3)

An “affected transaction” is defined as –

(i)    a transaction or series of transactions amounting to the disposal of all or the greater part of the assets or undertaking

       of a regulated company, as contemplated in section 112, subject to section 118 (3);

(ii)   an amalgamation or merger, as contemplated in section 113, if it involves at least one regulated company, subject

       to section 118 (3);

(iii)  a scheme of arrangement between a regulated company and its shareholders, as contemplated in section 114,

       subject to section 118 (3);

(iv)  the acquisition of, or announced intention to acquire, a beneficial interest in any voting securities of a regulated

       company to the extent and in the circumstances contemplated in section 122 (1);

(v)   the announced intention to acquire a beneficial interest in the remaining voting securities of a regulated company

       not already held by a person or persons acting in concert;

(vi)  a mandatory offercontemplated in section 123; or

(vii) compulsory acquisition contemplated in section 124;”

In terms of the Companies Act a “regulated company” is –

(i)   a public company;

(ii)  a state-owned company; or

(iii) a private company, but only if the percentage of the issued securities of that company have been transferred,

      other than by transfer between or among related or inter-related persons, within the period of 24 months immediately

      before the date of a particular affected transaction or offer exceeds 10% of the issued securities of the applicable private

      company.


 Parts B and C of Chapter 5 of the Companies Act.

s120 and s223 of Companies Act..

Part C of Chapter 5 of the Companies Act.

s121 of the Companies Act.

s118 (3) states that despite the definition of “affected transaction”set out in section 117 (1) (c), Part B, Part C

(of Chapter 5 of the Companies Act) and the Takeover Regulations do not apply to –

(a)     a proposal to dispose, or disposal, of all or the greater part of the assets or undertaking ofa regulated company;

(b)     a proposed amalgamation or merger involving at least one regulated company; or

(c)     a scheme of arrangement proposed by a regulated company,

to the extent that any such affected transaction is pursuant to or contemplated in an approved businessrescue plan in terms of Chapter 6 of the Companies Act.

This percentage is prescribed by the Minister of Trade and Industry and is subject to change from time to time.