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Cape Town - The board of directors of Italtile advised shareholders on Tuesday that the company has submitted a non-binding expression of interest to Ceramic Industries.
The offer is to acquire the entire issued share capital of Ceramic, other than the shares beneficially owned by Italtile Ceramics (a wholly owned subsidiary of Italtile), the treasury shares held by National Ceramic Industries and the shares issued to David Robert Alston, Lance Andrew Foxcroft and Tshepo Molefakgotla, being the chief financial officer, the chief executive officer and the chief operations officer of Ceramic respectively.
The target shares make up approximately 75% of the issued share capital of Ceramic and the purchase price consideration, which will be approximately R3.75bn is to be settled 50% in cash and 50% by the issue of Italtile shares at R11.57 per share.
Furthermore, in order to ensure equitable treatment of all shareholders and afford minority shareholders the opportunity to avoid dilution of their shareholding as a result of the acquisition, Italtile said it intends to undertake a renounceable rights offer.
In terms of the rights offer, Italtile will offer a total of 22 shares for every 100 shares held in Italtile at the close of business on the record date for the rights offer at a subscription price of R11.57 per rights offer share.
The rights offer ratio was determined based on the number of Italtile shares that Rallen, the current majority shareholder of Ceramic and majority shareholder of Italtile, would receive as part of the acquisition consideration compared to the number of Italtile shares currently held by Rallen.
In order to ensure minority shareholders have the opportunity to limit the dilution from the acquisition consideration, Rallen will undertake not to follow, nor to dispose of its rights in terms of the rights offer. As a result, a maximum number of 105 million rights offer shares could be taken up, resulting in the raising of approximately R1.2bn.
