Grindrod Shipping Holdings , a global provider of maritime transportation services predominantly in the drybulk sector, announced that we have entered into a transaction implementation agreement , dated October 11, 2022, among the Company, Taylor Maritime Investments Limited and Good Falkirk Limited, a wholly-owned subsidiary of TMI , providing for a voluntary conditional cash offer to be made by the Offeror for all of the issued ordinary shares in the capital of the Company .
Under the terms of the Offer, shareholders of the Company (“Grindrod Shareholders”) will be entitled to receive the offer price of US$21.00 in cash for each Share tendered in the Offer. Under the terms of the Implementation Agreement, subject to the conditions to the Offer being satisfied (or, to the extent permitted, waived) as of the expiration time of the Offer, the Company has agreed to declare and pay a special dividend of US$5.00 per Share (“Special Dividend”) to Grindrod Shareholders that hold Shares as of a dividend record date to be established by the Board. If the conditions to the Offer are not satisfied (or, to the extent permitted, waived) as of the expiration time of the Offer (as such expiration may be extended), subject to the rules of the Johannesburg Stock Exchange (the “JSE”) no Special Dividend will be paid by the Company. Under the terms of the Offer and the Implementation Agreement, if the conditions to the Offer are satisfied (or to the extent permitted, waived) as of the expiration time of the Offer (as such expiration may be extended), Grindrod Shareholders who have validly tendered (and not withdrawn) their Shares in accordance with the terms of the Offer (and who hold Shares as at the Special Dividend record date) would therefore receive an aggregate transaction value of US$26.00 per Share (comprising the offer price of US$21.00 in cash and the Special Dividend) (“Transaction Value”), valuing the Company’s existing issued and to be issued ordinary share capital at approximately US$506 million on a fully diluted basis (including the Special Dividend). As mandated by the Financial Surveillance Department of the South African Reserve Bank, Grindrod shareholders holding their Shares on the JSE will receive their Offer consideration in the equivalent amount of South African Rand. The South African Rand to U.S. Dollar exchange rate to be applied to determine the amount of South African Rand will be set out in the formal offer documentation to be issued in respect of the Offer.
The Transaction Value of US$26.00 per Share represents a 26.8% premium to the last traded price per Share on August 26, 2022, being the last full day of trading in the Shares on NASDAQ preceding the filing of the Schedule 13D Amendment disclosing that TMI, the Offeror and the Company had entered into a letter of intent with respect to the Offer. The Transaction Value also represents 36.8%, 30.8%, 14.7%, and 19.4% premia to the 30-day, 60-day, 90-day, and 180-day volume weighted average prices, respectively, prior to August 26, 2022. The Offer in cash provides an immediate and certain exit opportunity for Grindrod Shareholders at an attractive premium to the Company’s undisturbed share price at a time of significant market volatility and economic uncertainty.
The Offer is conditioned upon, amongst other things:
(i) the Offeror having received, by the expiration time of the Offer, as extended, valid tenders in accordance with the terms of the Offer (which have not been validly withdrawn) of at least such number of Offer Shares which, together with Shares acquired before (or, with the approval of the Company, during the period of) the Offer (and including any Shares issued to the Offeror pursuant to the Offeror’s payment of the offer price of US$21.00 in respect of Company Forfeitable Shares, will result in the Offeror and persons acting in concert with it, holding such number of Shares carrying more than 50% of the voting rights attributable to the aggregate of all the Shares of the Company in issue (other than Shares held in treasury) and the number of Shares that would result from the valid vesting and settlement in full of the Company Forfeitable Shares;
(ii) approval of TMI’s shareholders in respect of a proposed amendment to TMI’s existing investment policy;
(iii) all applicable suspension periods (including any extensions thereof) relating to the Offer under the Competition Act, No. 89 of 1998 (as amended) having expired or lapsed and the South African Competition Commission’s approval relating to the Offer having been obtained;
(iv) (a) the Board having declared a Special Dividend of US$5.00 per Share and fixed as the record date therefor a date on or prior to the date on which the expiration time of the Offer occurs, (b) the Company having remitted sufficient funds to the applicable transfer agents for payment in full of the Special Dividend and (c) the Company having irrevocably instructed the applicable transfer agents to pay and distribute the funds for the Special Dividend to the holders of record of outstanding Shares as of the Special Dividend record date as soon as possible after the expiration time of the Offer; and
(v) the other conditions which are set forth in Schedule 1 of the Joint Rule 3.5 Announcement that was separately published today by the Company and TMI pursuant to Rule 3.5 of The Singapore Code on Take-overs and Mergers.
Grindrod Investments Proprietary Limited, an entity that holds approximately 10.12% of the outstanding Shares, has entered into a Tender and Support Agreement pursuant to which, subject to the terms and conditions set forth therein, it has agreed to tender its Shares into the Offer.
Jefferies LLC is serving as financial advisor to the Company and Provenance Capital Pte. Ltd.is serving as Independent Financial Advisor to the Company. Fried, Frank, Harris, Shriver & Jacobson LLP, Allen & Gledhill LLP and Edward Nathan Sonnenbergs Inc. are providing legal counsel to the Company.
Source: Grindrod Shipping Holdings Ltd.
