a Remaining Shares 065 x 5 000 000 3 250 000 b Quorum 025 x 3 250 000 812 500 c

A remaining shares 065 x 5 000 000 3 250 000 b quorum

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a.) Remaining Shares 0.65 x 5 000 000 = 3 250 000 b.) Quorum 0.25 x 3 250 000 = 812 500 c.) Must Vote in favour of the transaction 0.75 x 812 500 = 609 375 609 375 people must vote in favour of the transaction. 4.) RAINBOW would be able to squeeze-out the remaining shareholders of CHEMTECH once they acquired a total shareholding of 4 500 000 shares. 5 000 000 x 90% = 4 500 000 shares
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- Following indicates that the target should not frustrate the offer of the acquiring : JSE Listing Requirements - If listed on the JSE – have to meet certain requirements with regard to business combinations - JSE requirements (Service Issue 14) align with the Companies Act and the King III Report - Specific attention to business combinations lies in Section 9 of JSE Listings Requirements Must consult the JSE on the matter as soon as possible JSE requires detailed information on, amongst other things(before transaction can happen): o The impact of the deal on market capitalisation o The dilution of shareholding o The structure of the deal (cash? Exchange?) o The value of the transaction o Directors dealings (very NB – has there been any insider trading) The business combination needs to be categorised: Category 1: transaction size is in excess of 25% of the shareholding of the target company Special Resolution is required within 28 days of proposing transaction 5 | P a g e Section 119 of the Companies Act (No.71 of 2008) (1) The Panel must regulate any affected transaction or offer in accordance with this Part, Part C and the Takeover Regulations, but without regard to the commercial advantages or disadvantages of any transaction or proposed transaction, in order to— (a) ensure the integrity of the marketplace and fairness to the holders of the securities of regulated companies; (b) ensure the provision of— (i) necessary information to holders of securities of regulated companies, to the extent required to facilitate the making of fair and informed decisions; and (ii) adequate time for regulated companies and holders of their securities to obtain and provide advice with respect to offers; and (c) prevent actions by a regulated company designed to impede, frustrate, or defeat an offer , or the making of fair and informed decisions by the holders of that company’s securities. Section 126 of the Companies Act (No.71 of 2008) (1) If the board of a regulated company believes that a bona fide offer might be imminent, or has received such an offer, the board must not- (a) take any action in relation to the affairs of the company that could effectively result in- (i) a bona fide offer being frustrated; or (ii) the holders of relevant securities being denied an opportunity to decide on its merits; (b) issue any authorised but unissued securities; (c) issue or grant options in respect of any unissued securities; (d) authorise or issue, or permit the authorisation or issue of, any securities carrying rights of conversion into or subscription for other securities; (e) sell, dispose of or acquire, or agree to sell, dispose of or acquire, assets of a material amount except in the ordinary course of business; (f) enter into contracts otherwise than in the ordinary course of business; or (g) make a distribution that is abnormal as to timing and amount , without the prior written approval of the Panel, and
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