Cape Town - The Rupert family, which controls both Remgro and Venfin, will not vote on the proposed takeover of Venfin by Remgro.
Remgro CEO Thys Visser told analysts at a briefing on Tuesday morning there was no pressure from the Rupert family to merge Remgro and Venfin. "This was a decision taken by the management. Life had moved on and we need to put the two companies together."
Remgro and Venfin were split out of the old Rembrandt Group in 2000, with Remgro taking the so-called old economy investments and Venfin holding onto mainly technology assets.
Visser said not only would the Rupert family not vote on the proposed merger, but that the family would also take settlement for its Venfin stake in Remgro ordinary shares and not special unlisted B-shares (which effectively ensures the Rupert family stays in control of Remgro).
Undertakings of support
Remgro issued a detailed terms announcement for the Venfin transaction to shareholders early on Tuesday morning. Venfin shareholders will be offered one new Remgro share for every 6.25 Venfin shares held - a swap ratio based on net asset values from early June.
Visser said the terms of the deal were reasonable, and that the pricing structure included control premiums on Remgro's investments like Medi-Clinic as well as making conservative assumptions around market conditions.
The notice indicated that a number of its major Remgro shareholders had already indicated support for the acquisition of Venfin.
Remgro already has signed undertakings of support from shareholders holding 165 million shares or about 38% of the group's issued shares.
Remgro has also obtained signed undertakings from Venfin shareholders holding 81 million shares or about 47% of the company's issued shares.
The Sens announcement outlined a number of benefits for both Remgro and Venfin shareholders - including removing potential conflicts of interest between the two entities, as well as increasing Remgro's exposure to unlisted and high growth investments.
Responding to a suggestion that the deal's benefits seemed stacked in favour of Remgro, Visser noted that Venfin had committed most of its available cash.
"Venfin has some attractive investments, and holds a pipeline of new investments. There is potential to grow these investments, but to do that you need capital."
Remgro, as Fin24.com indicated on Monday, is sitting on cash holdings of nearly R6bn.
One example cited by Visser was Venfin's investment in CIV Fibre Network Solutions, which held an investment in fibre-optic network specialist Dark Fibre.
He said Dark Fibre had the potential to expand into Africa, and that Venfin would want to be in a position to participate in such opportunities.