Sandon Capital Investments Limited (ASX:SNC) made an offer to acquire remaining 81.1% stake in Mercantile Investment Company Limited (ASX:MVT) for AUD 40 million on June 3, 2019. Under the terms of the offer, Sandon Capital will issue 0.2128 shares for each share of Mercantile Investment Company. Under the offer, the exchange ratio will be set by reference to the pre-tax net tangible asset backing per share as at May 31, 2019 as announced by Mercantile and Sandon under Listing Rule 4.12, being the same exchange ratio applicable to the agreement announced earlier today under which Sandon will acquire 18.8% Mercantile shares from Siblow Pty Limited. As of June 17, 2019, the exchange ratio has been calculated to be 0.2043 Sandon Shares based on pre tax NTA for every Mercantile Share. 50 million options were also acquired as a part of the acquisition.

The transaction is subject to approval by shareholders of Sandon Capital Investments, acceptance of at least 80% of Mercantile Investment Company shares at the end of the offer, no early redemption of mercantile notes, no change in management arrangements, no regulatory intervention and no prescribed occurrences, Mercantile either procuring that all indebtedness owed by Mercantile or any subsidiary of it is discharged and extinguished in full and announces on ASX on or before June 30, 2019; or announces that the due date for payment of all indebtedness owed by Mercantile or any subsidiary of it to each relevant lender has been extended to December 31, 2019. As of August 12, 2019, Sir Ron who is one of the Director has stated that the entities he controls will accept the offer currently representing 24.7% stake in Mercantile. On July 9, 2019, Sandon Capital Investments Limited presently intends to proceed with compulsory acquisition of Mercantile Investment Company Limited's Shares. The general meeting of shareholders of Sandon Capital Investments Limited will be held on August 12, 2019. As of June 20, 2019, shareholders of Mercantile Investment Company Limited are advised to take no action at this stage. On August 1, 2019, the independent Board committee of Mercantile Investment Company Limited recommended its shareholders to accept the offer. As of August 12, 2019, shareholders of Sandon Capital passed the necessary resolutions. A committee of Mercantile directors independent of Sandon has been formed and is considering Sandon's proposal to make the Offer. On August 2, 2019, certain conditions for the transaction been fulfilled. A notice providing the status of defeating conditions shall be given on September 2, 2019. As of August 27, 2019, offer has become unconditional. As of August 1, 2019, offer is scheduled to close on September 2, 2019. As of August 23, 2019, the transaction is expected to be completed on September 9, 2019. As of September 17, 2019, Mercantile Investment Company Limited applied for delisting from the New Zealand Exchange. The suspension will take place on September 19, 2019.

Watson Mangioni acted as legal advisor for Sandon Capital Investments and was paid a fee of AUD 0.14 million. Link Market Services Limited acted as registrar to Sandon Capital Investments Limited. Mont Lawyers Pty Limited and Titan Partners Corporate Finance Pty Limited acted as legal advisor and fairness opinion provider to Mercantile Investment Company Limited respectively.

Sandon Capital Investments Limited (ASX:SNC) completed the acquisition of remaining 81.1% stake in Mercantile Investment Company Limited (ASX:MVT) on September 9, 2019. Sandon currently has a relevant interest in 93.97% of Mercantile's shares and intends to commence the compulsory acquisition process for the remaining Mercantile shares. Conditions to the acquisition of the unlisted options in Mercantile have been satisfied. As of September 12, 2019, Sandon announced that it will now proceed with compulsory acquisition.