- SCIL offers to acquire from the SCL shareholders all their SCL ordinary shares
- Shareholders who accept the Offer by the closing date shall receive 1 new SCIL share for every 0.98 shares they hold in SCL
HARARE – Seed Co International Limited (SCIL) has reaffirmed its intention to merger with its Zimbabwean operations, Seed Co Limited (SCL) as a strategic step following the former’s listing on the recently introduced US dollar denominated bourse, the Victoria Falls Stock Exchange (VFEX).
In addition to its listing on the VFEX, SCIL shares are primarily listed on the Botswana Stock Exchange while Seed Co limited is separately listed on ZSE.
In clarifying rationale for the offer in a circular to shareholders issued on Wednesday 13 January 2021, SCIL says that transferring only one of the entities, SCIL, to the VFEX trading in US$ while leaving SCL on the ZSE trading in Z$ will not protect value for shareholders.
“Against this background, SCIL deemed it strategically fit to integrate SCL’s operations under SCIL with a view to strengthening the profile of SCIL following its Secondary Listing’s migration from the ZSE to the VFEX.
“This integration of the Zimbabwean operations will make SCIL’s profile on the VFEX comparable to its dual listed counterparts whose make up comprise both international and Zimbabwean operations,” SCIL said.
The entity offers to acquire from the SCL shareholders all their SCL ordinary shares for the Offer Consideration.
According to the circular, SCL shareholders who accept the Offer by the closing date shall receive 1 new SCIL share for every 0.98 shares they hold in SCL.
“The share swap is based on the relative intrinsic values of SCIL and SCL determined through an independent valuation of the two companies. The share swap ratio represents a premium of 5% on the average 30-day and 60-day VWAPs of SCIL and SCL shares as of 26 June 2020,” SCIL said.
Subject to the Offer being accepted by shareholders of SCL to the extent that SCIL’s shareholding in SCL reaches more than 70% or SCL has less than 300 shareholders, SCL will apply for voluntary delisting of SCL from the ZSE in terms of section 11(6) (b) of the ZSE Listing Requirements.
SCIL also clarified that should the takeover and de-listing threshold of 70% SCL issued share capital acceptances to the SCIL open market offer not be reached, SCIL will not proceed with the acquisition of any SCL shares.
“Accordingly, the offer is therefore conditional upon acceptances to the SCIL’s open market offer cumulatively exceeding 70% of SCL’s issued share capital”.
Seed Co International Limited (“SCIL”) was incorporated on 7 July 2000 in Botswana under the International Financial Services Centre. The Company was a wholly-owned subsidiary of Seed Co Limited (“SCL) until 9 August 2018 when the Shareholders of SCL approved the partial unbundling and separate listing of SCIL. SCIL was partially unbundled through a dividend-in-specie of its shares to SCL Shareholders. SCL retained a 27% shareholding in SCIL which it still owns to date.
SCIL and SCL operate under ‘the African Seed’ brand with their operations falling under the same management and sharing various support and technical functions.
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