Imperial to buy back preference shares

IMPERIAL Holdings, the listed logistics and automotive group that plans to unbundle and separately list its two major businesses, proposes to repurchase all of the group’s issued preference shares through a scheme of arrangement.

The group said yesterday that despite the fact that preference shareholders were not entitled to participate in the unbundling in line with Imperial’s memorandum of incorporation, its board believed that the proposed scheme would be an efficient way for Imperial to simplify its capital structure prior to the unbundling and for preference shareholders to dispose of their preference shares in an orderly and effective manner.

It said the scheme would comprise a repurchase price offer of R83 a preference share, plus a preference share dividend of R2.53 a preference share for the period from June 26 up to and including October 15 this year, the expected date on which the scheme became operative.

Premium

Imperial said the offer consideration represented a premium of 29 percent to the close price of R64.29 a preference share on Friday, the last trading date prior to its announcement about the scheme and an 18 percent premium to the adjusted volume weighted average price of R70.31 a preference share traded on the JSE during the 30 trading days up to Friday.

In addition, a preference share dividend of R4.17 a share for the period accrued from December 26 last year to June 25 this year would be paid to preference shareholders on October 1.

The implementation of the scheme was subject to several conditions precedent, including the approval of eligible shareholders by the required majority.

It is anticipated that the listing of the preference shares on the JSE would be suspended from the commencement of trading on October 10, the scheme to be operative from October 15 and the listing of the preference shares on the main board of the JSE to be terminated on October 16.

The planned unbundling of Imperial will provide its shareholders with the opportunity to participate directly in Imperial Logistics and/or Motus, Imperial’s automotive business. Imperial anticipates the proposed unbundling would be implemented in the fourth quarter of this year.

The proposed unbundling was still subject to shareholder approval at a general meeting of shareholders on or about October 30 this year.

Imperial shares dropped 0.79 percent on the JSE yesterday to close at R199.29.