Forte Oil Plc Releases Document On Take Over Offer By Ignite Investments And Commodities Limited

Wednesday, August 28, 2019 /02:48PM /NSE / Header Image Credit: Forte Oil

Background to the Take-Over Offer

On 24 June 2019, Ignite Investments acquired 970,166,694 Ordinary Sharesrepresenting a 74.02% equity stake in Forte Oil from Zenon Petroleum & GasLimited ("Zenon Petroleum"), Thames Investment Incorporated ("ThamesInvestment") and Femi Otedola, for a cash consideration of N66.25 per share.The acquisition was consummated following the execution of a share purchaseagreement between Ignite Investments, Zenon Petroleum, Thames Investment and FemiOtedola, and the approval of the SEC and The NSE. The trade was executed on theThe NSE on 19 June 2019 and the shares were credited to the CSCS account ofIgnite Investment on 24 June 2019 in line with the T+3 settlement period.

In accordance with Section 131(1) of the ISA and Rules 445 - 448 of theSEC Rules and Regulations (as amended), Ignite Investments is required to makea Take-Over Offer to all the other shareholders of Forte Oil. Consequently, on19 June 2019, the Board of Ignite Investments granted approval for a Take-OverOffer to be made to all Qualifying Shareholders, for the acquisition of theOffer Shares. A copy of the Board Resolution of Ignite Investments approvingthe Take-Over Offer is set out on page 20.

Pursuant to Part XII of the ISA, Ignite Investments is allowed to makean Offer for all or a portion of the shares of the other shareholders of ForteOil. Ignite Investments desires to acquire up to 500,000 Ordinary Sharesrepresenting 0.04% of the total issued and fully paid up share capital of ForteOil.

The Take-Over Offer, the terms of which are set out below, has beenauthorised and registered by the SEC.

Please read carefully Clause 5.9 on page 14, which sets out theprocedures for acceptance of the Offer. Your attention is drawn, in particular,to the conditions and further terms of the Offer set out in Appendix I of thisdocument and in the Acceptance Form.

The Take-Over Offer

Ignite Investments holds 970,166,694 Ordinary Shares representing 74.02%equity stake in Forte Oil as at 24 June 2019. Ignite Investments hereby offersto purchase, subject to the terms and conditions described herein, all or partof such Qualifying Shareholder's registered holding of Ordinary Shares (asregistered to such Qualifying Shareholder in the Register of Members of ForteOil on the Qualification Date) subject to the following:

a) Under theOffer, Ignite Investments shall only acquire the Offer Shares of up to 500,000Ordinary Shares at the Offer Price of N=66.25 per share (free of allcommissions) in cash from Qualifying Shareholders so that its aggregateinterest in Forte Oil would be 74.06% of the issued and paid up capital ofForte Oil; and

b) Notwithstandingthe above, if the total number of Ordinary Shares comprised in acceptances ordeemed acceptances from Qualifying Shareholders exceeds 500,000, thenacceptances shall be scaled back so that Ignite Investments shall only beobliged to purchase a pro-rated quantity of Ordinary Shares from each suchQualifying Shareholder, being a number equal to:

Proshare Nigeria Pvt. Ltd.

In the event that this calculation results in a fractional number ofshares to be acquired from a Qualifying Shareholder, such number would berounded down to the nearest whole number.

The Offer is intended to enable all Qualifying Shareholders toparticipate, should they choose to do so. Qualifying Shareholders who acceptthe Offer will not be obligated to pay brokerage fees or commissions or anytransfer fees or charges on their acceptance of the Take-Over Offer to theOfferor or the Registrar. However, Qualifying Shareholders are cautioned toconsult with their own brokers or other intermediaries to determine whether anyfees or commissions are payable to their brokers or other intermediaries in connectionwith a deposit of Forte Oil shares pursuant to the Offer.

The Offer Shares will be acquired pursuant to the Take-Over Offer freefrom all liens, equitable charges, encumbrances, rights of pre-emption andother third party rights of any nature whatsoever and together with all therights now or hereafter attaching thereto, including, without limitation,voting rights and the right to receive and retain all dividends, distributions(if any) declared and any adjustment shares issued as a consequence of anycorporate action made or paid after the date of this document.

The Take-Over Offer will be open for acceptance from 8:00 a.m. on [.]until the Offer Closure Time, being 5:00 p.m. on [.].

Consideration and Payment for Offer Shares

Ignite Investments will pay a cash consideration of N=66.25 per share toQualifying Shareholders who accept the Take-Over Offer and validly deposittheir shares.

The Offer provides an opportunity for Qualifying Shareholders who wishto sell their shares to receive cash consideration of N=66.25 per share.

The total consideration will be funded from existing cash resources heldby or available to Ignite Investments. Ignite Investments has sufficientliquidity to fund the Offer.

Ignite Investments estimates that if it acquires all of the OrdinaryShares stated under the Offer, the total amount required for the purchase ofthe Ordinary Shares will be N=33,125,000.00.

Acceptance Conditions

Ignite Investments shall not be obliged to take up, purchase or pay for,any Forte Oil shares tendered by a Qualifying Shareholder under the Take-OverOffer (such shares being the "Relevant Forte Oil shares") unless all of thefollowing conditions are satisfied or waived by Ignite Investments at or priorto the Offer Closure Time:

i. The Offer shall have been validly accepted ordeemed to be validly accepted in accordance with Clause 5.10 on page 14 and theQualifying Shareholder(s) shall not have exercised their right of withdrawal inrespect of one or more Ordinary Shares as at the Offer Closure Time;

ii. The absence of pending or threatened materiallitigation, investigations or other matters in respect of the Relevant ForteOil shares;

iii. The representations and warranties of theQualifying Shareholders set out on the Acceptance Form on pages 23 to 24 aretrue and accurate in all respects; and

iv. The Relevant Forte Oil shares tendered are notsubject to any charge, lien or other encumbrances.

Eligibility

This document is being sent to all Qualifying Shareholders. QualifyingShareholders who prior to their receipt of this document have sold or otherwisetransferred all of their shares in Forte Oil are requested to forward thisdocument to the transferee, or to the agent through whom the shares were sold,for transmission to the transferee.

The Take-Over Offer is open to the Qualifying Shareholders who mayparticipate in the Take-Over Offer by depositing and not withdrawing some orall the Offer Shares held by them (with respect to the withdrawal, this canonly occur within ten days after the date of the Take-Over Offer). Offer Shareswould be deemed to have been deposited pursuant to the Take-Over Offer if aduly completed Acceptance Form and accompanying documents have been received bythe Registrars before the Offer Closure Time.

Dividends and Distributions

Subject to the terms and conditions of the Take-Over Offer above inClause 5.4, by accepting the Take-Over Offer and depositing Offer Shares inaccordance with the procedures described herein, a Qualifying Shareholderagrees to sell, assign and transfer to Ignite Investments all rights, benefits,title and interest in all the Offer Shares deposited pursuant to the Take-OverOffer including any and all dividends and distributions which may be declaredon or in respect of the deposited Offer Shares after the Offer Closure Time.

Rights of Withdrawal

Qualifying Shareholders may withdraw some or all of the Offer Sharesthey deposited pursuant to the Take-Over Offer at any time until [.], i.e. 10days after the opening date of the Take-Over Offer. Qualifying shareholders whowish to withdraw their Offer Shares must submit a written notification whichshould be delivered to the Registrars before 5:00 p.m. on [.].

Over-Subscription of the Take-Over Offer and ScalingBack

Following the Offer Closure Time, if the total number of Ordinary Sharescomprised in acceptances or deemed acceptances from Qualifying Shareholdersexceeds 500,000, then acceptances shall be scaled back so that IgniteInvestments shall only be obliged to purchase a pro-rated quantity of OrdinaryShares at the Offer Price from each such Qualifying Shareholder being a numberequal to:

Proshare Nigeria Pvt. Ltd.

Any excess Forte Oil shares will be returned by the Registrars toQualifying Shareholders on a pro-rata basis to the number of Forte Oil sharesdeposited under the Take-Over Offer. In the event that the pro-rata calculationresults in a fractional number of shares to be acquired from a QualifyingShareholder, such number of shares would be rounded down to the nearest wholenumber.

Acceptance / Action to Be Taken

Qualifying Shareholders should read this clause in conjunction withAppendix I to this document. Qualifying Shareholders who hold their ordinaryShares in certificated form must dematerialize their shares via theirstockbroker in order to be eligible to participate in the Take-Over Offer. Theinstructions on the Acceptance Form are deemed to form part of the terms of theOffer.

If you have any queries as to how to complete the Acceptance Form orrequire additional Acceptance Forms, please contact Veritas Registrars Limited,who is acting as the Registrars to the Offer, or Stanbic IBTC StockbrokersLimited, who is acting as the Stockbrokers to the Offer, at their respectiveregistered addresses set forth on page 10 of this document.

If you wish to accept the Offer in respect of Forte Oil shares, pleasereturn the Acceptance Form duly completed and signed and accompanied with thestamp and signature of your stockbroker, to the Registrars at the addressstated on the Acceptance Form with the statement of your CSCS account as soonas possible, and in any event so as to ensure that the documents arrive notlater than the Offer Closure Time.

Qualifying shareholders with corporate accounts will be required topresent a copy of the board resolution authorising the verification of the CSCSstatement and a signature mandate card in addition to their Acceptance Form.After settlement of the instruction, you will not be able to access the ForteOil shares deposited in CSCS for any transaction or charging purposes.

Acceptances to the Offer may be delivered by post / mail, by hand(during normal business hours) or by such other method of delivery as you maydetermine. The method of delivery is at your selection and risk. Noacknowledgement of receipt of documents will be given by or on behalf of IgniteInvestments. The instructions printed on the Acceptance Form are deemed to formpart of the terms of the Offer.

Neither Ignite Investments nor any of its appointed agents or adviserswill accept or bear liability for any loss, howsoever arising, whether as aresult of any fraudulent transfer of shares, forged / stolen sharecertificates, or any other fraudulent means, or as a result of delay, or failureto deliver an Acceptance Form or share certificate or CSCS Statements, or anyother document required by or in connection with this document and theAcceptance Form before the Offer Closure Time.

Validity of Acceptance

Ignite Investments reserves the right, in its absolute discretion, totreat as valid in whole or in part any Acceptance of the Offer which is notentirely in order or which is not accompanied by the relevant CSCS statementand / or other documents of title. In that event, no payment will be made untilafter the relevant share certificate(s) and / or other documents of title orindemnities reasonably satisfactory to Ignite Investments have been received.

Qualifying Shareholders who hold Forte Oil's shares in uncertificatedform and wish to accept the Offer should note that only a duly completedAcceptance Form, with the statement of a CSCS account held by the QualifyingShareholder attached to it, will be a valid Acceptance of the Offer if it issent to the Registrars on or before the Offer Closure Time.

Ignite Investments shall not be under any duty to give notification ofany defect or irregularity in any acceptance or the procedures for theacceptance of the Take-Over Offer nor will it incur any liability for failureto give such notification. Ignite Investments will not be bound by theAcceptance Forms received by the Registrars after the Offer Closure Time.

Settlement

Qualifying Shareholders who wish to accept the Offer must provide theiractive, complete and accurate bank account details on their Acceptance Form aspayments for the accepted Forte Oil shares would be made by direct electronictransfer to the bank accounts of the respective Qualifying Shareholders.

Qualifying Shareholders who accept the Offer, will not be required topay brokerage fees or commissions to Ignite Investments or the Registrars.However, Qualifying Shareholders are cautioned to consult with their ownbrokers or other intermediaries to determine whether any fees or commissionsare payable to their brokers or other intermediaries in connection with adeposit of Forte Oil shares pursuant to the Offer.

In the event that the Offer is over-subscribed, and acceptances arescaled back in accordance with Clause 5.8 on page 13, Qualifying Shareholdersshould note that this may have timing implications and the settlement periodmay be subject to change or adjustment by the SEC.

Taxation

The taxation consequences of the Take-Over Offer will depend on thejurisdiction in which the Qualifying Shareholders are resident for taxpurposes. Under current Nigerian tax legislation, participation in theTake-Over Offer should not give rise to any chargeable capital gains tax.However, this statement is not intended to be, and should not be construed tobe, legal or tax advice to any particular shareholder. Qualifying Shareholderswho are in doubt about their taxation position, or who are subject to taxationin a jurisdiction outside Nigeria, are strongly advised to consult their ownprofessional advisers without delay as to the consequences of the Take-OverOffer in view of their own circumstances.

Plans for Employees

The Take-Over Offer is not expected to result in any changes to theterms and conditions of employment of the employees of Forte Oil. Where anyemployee does not wish to continue in the employment of Forte Oil after theTake-Over Offer has been concluded, such employee will be entitled to obtainthe full terminal benefits due under his / her existing contract of service.

Deceased Shareholders

If any Qualifying Shareholder is deceased and his / her Ordinary Sharesis in certificated form, the administrators of the estate / executors of thedeceased's may accept the Take-Over Offer by dematerialising such shares viatheir stockbroker in order to participate in the Take-Over Offer. TheAcceptance Form duly signed and completed, with copies of the death certificateand a valid letter of Administration and any other document that IgniteInvestments may require, should be submitted on or before the Offer ClosureTime.

Foreign Jurisdictions

The Take-Over Offer is being made in Nigeria in accordance with Part XIIof the ISA. Non-resident Qualifying Shareholders are advised that the legalityof making the Take-Over Offer to persons resident outside Nigeria may beaffected by the laws of the jurisdiction in which they reside. Non-residentQualifying Shareholders are therefore required to inform themselves about anyapplicable legal requirements they are obliged to observe in their countries ofresidence, as the Take-Over Offer is not being made either directly orindirectly to any shareholder who is resident in a jurisdiction where it isillegal for the Take-Over Offer to be made or accepted or in which theTake-Over Offer would in any manner breach the requirements of suchjurisdiction.

Further Information

Your attention is drawn to the copy of the Board Resolution of IgniteInvestments approving the Take-Over Offer, contained on page 20, and whichforms part of this document. Ignite Investments confirms its acquisition of theOffer Shares will not result in any variation in the total emolumentsreceivable by its directors.

DownloadFull PDF On Take Over Offer Here