Keybridge Capital : Proposed Off-Market T/O Bid for WAM Active

For personal use only

4 February 2022

Company Announcements

ASX Limited

Level 4 North Tower

525 Collins Street

Melbourne VIC 3000

RE: PROPOSED OFF-MARKET TAKEOVER BID FOR WAM ACTIVE LIMITED (ASX:WAA)

Keybridge Capital Limited (ACN 088 267 190) (Keybridge) is pleased to announce its intention to make an off-market takeover bid (Offer) under Part 6.5 of Chapter 6 of the Corporations Act 2001 (Cth) (Corporations Act) for all the currently issued fully paid ordinary shares in WAM Active Limited (ACN 126 420 719) (WAM Active) for an all scrip bid consideration of 1.16 x $1.00 face value Keybridge convertible redeemable promissory note (CRPN) for each WAM Active share (WAM Share).

The Keybridge CRPN will have the following key terms (and will be generally similar to the recently matured issue of CRPN1):

• a face value and maturity value of $1.00.
• a term of 10 years from the date of issue.
• categorised as an equity instrument for tax purposes.
• a gross running yield of 2.0% pa2 fully franked.
• a dividend stopper on Keybridge Ordinary Shares if a CRPN interest payment remains outstanding.
• rank in priority to Keybridge Ordinary Shares in the event of wind up.
• on maturity, may be redeemed for $1.00 in cash or converted into Keybridge Ordinary Shares (at a 5% discount to the then VWAP)3.
• Keybridge intends to apply to have the CRPN quoted for trading on the Australian Stock Exchange.
• Indicative draft terms of the CRPN are attached at Annexure A to this announcement.

The $1.16 face value of the Keybridge CRPN (based on 1.16 x $1.00 CRPN) offered for each WAM Share compares to the Net Tangible Assets of WAM Active, last reported to be $0.9935 before tax (as at 31 December 2021).

WAM Active has disclosed that it holds 28.58%4 of the issued shares in Keybridge. If Keybridge successfully obtains control of WAM Active, it intends to dispose of WAM Active's shares in Keybridge within 12 months of obtaining that control (pursuant to s259D of the Corporations Act).

Bid Conditions:

A condition of the proposed bid is that Keybridge obtain its shareholders' approval under ASX Listing Rule 7.1 for the issuance of the CRPN consideration. Keybridge intends to promptly obtain such approval.

The proposed takeover by Keybridge will also be subject to the following defeating conditions:

• With the specific removal of clause (b) of the Event of Default definition. Refer to the previous CRPN prospectus: https://cdn- api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2995-01634246- 2A863100?access_token=83ff96335c2d45a094df02a206a39ff4
  2 Paid annually. Dividend of 2% pa gross inclusive of franking (or 1.4c fully franked (with franking taxed at 30%)).
  3 However, Keybridge can override a holder conversion request and instead redeem the CRPN for cash or ordinary shares at its discretion.
  4 Substantial Shareholder notice dated 25 August 2021 and based on a current issue of 212,837,836 Keybridge Shares.

Keybridge Capital Limited	|	ABN 16 088 267 190 | ASX Code KBC | Web www.keybridge.com.au
Company Office	|	Suite 614, Level 6, 370 St Kilda Road, Melbourne, Victoria 3004, Australia
Company Secretarial Enquiries	|	Telephone [phone] Email [e-mail]

For personal use only

1. 50.1% minimum acceptance
   Keybridge has a Relevant Interest in more than 50.1% (by number) of WAM Active Shares on issue before the end of the Offer Period.
2. No regulatory action
   During the period starting on the date that the Offer was announcement (Announcement Date) and ending at the end of the Offer Period (Condition Period):
3. 1. no preliminary or final decision, order of decree is made or issued;
   2. no action, proceeding or investigation is announced, commenced or threatened; and
   3. no application is made (other than by Keybridge or its associates).

By or to any regulatory organisation or government agency which is likely to or threatens to restrain, prohibit, impede or otherwise materially adversely affect the making of the Offer, the acquisition of the WAM Active Shares by Keybridge, the rights of Keybridge in respect of WAM Active and WAM Active Shares or the continued operation of the businesses of WAM Active or its subsidiaries (other than any action or decision by or application to ASIC or the Takeovers Panel in exercise of the powers or discretions conferred by the Corporations Act).

1. No change to the investments management agreement
   During the Condition Period, there is no amendment or change to, or agreement to amend or change, the terms of WAM Active's investment management agreement.
2. No Prescribed Occurrences
   None of the following happens during the Condition Period (each being a separate condition):
3. 1. the shares of WAM Active or any of the Controlled Entities of WAM Active are converted into a larger or smaller number of shares;
   2. WAM Active or a subsidiary of WAM Active resolves to reduce its share capital in way;
   3. WAM Active or a subsidiary of WAM Active:
   4. 1. enters into a buy-back agreement; or
      2. resolves to approve the terms of a buy-back agreement under sections 257C of 257D of the Corporations Act;
   5. WAM Active or a subsidiary of WAM Active issues shares, or grants an option over its shares, or agrees to make such an issue or grant such an option (such condition specifically excludes securities issued pursuant to options in existence at the Announcement Date);
   6. WAM Active or a subsidiary of WAM Active issues or agrees to issue convertible notes;
   7. WAM Active or a subsidiary of WAM Active disposes or agrees to dispose of the whole or a substantial part of its business or property;
   8. WAM Active or a subsidiary of WAM Active grants or agrees to grant an Encumbrance over the whole or a substantial part of its business or property;
   9. WAM Active or a subsidiary of WAM Active resolves to be wound up;
   10. a liquidator or provisional liquidator of WAM Active or a subsidiary of WAM Active is appointed;
   11. a Court makes an order for the winding up of WAM Active or a subsidiary of WAM Active;

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1. 1. an administrator of WAM Active or a subsidiary of WAM Active is appointed under section 436A, 436B or 436C of the Corporations Act;
   2. WAM Active or a subsidiary of WAM Active execute a deed of company arrangement; or
   3. a receiver, or a receiver and manager, is appointed in relation to the whole, or a substantial part of the property of WAM Active or a subsidiary of WAM Active.
2. No material transactions
   Except for any proposed transaction reasonably full details of which are publicly announced by WAM Active before the Announcement Date, none of the following events occurs during the period starting on the Announcement Date and ending at the end of the Offer Period without the written consent of Keybridge:
3. 1. WAM Active or any of its subsidiaries acquires, offers to acquire or agrees to acquire one of more companies or assets (or an interest in one of more companies or assets) for an amount in any single transaction of more than $2,000,000 or any amount in aggregate in any series of transactions of more than $2,000,000, or makes an announcement about such as acquisition or acquisitions;
   2. WAM Active or any of its subsidiaries disposes, offers to dispose or agrees to dispose of one or more companies or assets (or an interest in one or more companies or assets) for an amount in any single transaction of more than $2,000,000 or any amount in aggregate in any series of transactions of more than $2,000,000, or makes an announcement about such a disposal;
   3. WAM Active or any of its subsidiaries enters into, offers to enter into or announces that it proposes to enter into any joint venture, partnership or dual listed company structure involving a commitment of greater than $2,000,000 in any single transaction or an amount in aggregate in any series of transactions of more than $2,000,000, or makes an announcement about such a commitment; or
   4. WAM Active or any of its subsidiaries incurs or commits to, or grants to another person a right the exercise of which would involve WAM Active or any of its subsidiaries incurring or committing to any capital expenditure or liability for one of more related items of greater than $2,000,000 or makes an announcement about such a commitment.
4. No material adverse change
   During the Condition Period, there is no occurrence of any change which has or could reasonably be expected to have a material adverse effect on the assets, liabilities, financial position, performance, profitability or prospects of WAM Active and/or its subsidiaries.
5. Conduct of WAM Active's business
   During the Condition Period, none of WAM Active and any body corporate which is or becomes a subsidiary of WAM Active, without the written consent of Keybridge:
6. 1. adopts a new constitution or makes any change to its constitution or passes any special resolution or proposes to do so;
   2. gives or agrees to give any encumbrance (including a Security Interest or mortgage) over any of its assets otherwise than in the ordinary course of business; or
   3. appoints any additional director to its board of directors whether to fill a casual vacancy or otherwise.
7. No superior alternative proposal
   During the Condition Period, no alternative proposal to the Offer is announced that:

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1. 1. is recommended by any WAM Active director; or
   2. offers consideration that is higher than the consideration offered under the bid valued, as far as practicable, in accordance with the principles applying under section 621(3) of the Corporations Act and ASIC Regulatory Guide 9: Takeover bids.
2. No material litigation During the Condition Period:
3. 1. None of WAM Active and its subsidiaries has threatened or commenced against it any material claims or proceedings in any court of tribunal (and a claim or proceeding is taken to be material if it may reasonably result in a judgment of $100,000 or more), other than that which has been fully and fairly publicly disclosed to the ASX prior to the Announcement Date;
   2. The consideration under the Offer is required to be increased or WAM Active or one of its associates of Keybridge is required or reasonably likely to be required to pay any amount to any one or more WAM Active shareholders in connection with the Offer as a result of:
   3. 1. Any litigation that is commenced, is threated to be commenced, announced or is made known to WAM Active (whether or not becoming public); or
      2. Any preliminary or final decision or order of any regulator or other government agency, other than as a result of Keybridge publicly undertaking to increase the consideration under the Offer or Keybridge lodging a notice of variation under section 650D of the Corporations Act relating to an increase of the consideration under the Offer; or
   4. The aggregate liability of WAM Active and its subsidiaries under or in connection with any existing claim or proceeding in any court or tribunal is or is likely to be materially more than the provision made for the claim or proceeding in WAM Active's last audited annual financial statements or, if no provision has been made, is or likely to be more than $100,000.
4. No de-listing
   During the Condition Period, WAM Active is not removed, or suspended for an aggregate of at least 5 Business Days or, from the official list of the ASX.
5. CRPN issuance satisfying ASX Listing Rules
   ASX being satisfied that the issuance of the CRPN complies with ASX Listing Rules.5
6. Restrictions on others acquiring shares in WAM Active
   During the Condition Period, no person other than Keybridge or an associate of Keybridge (as defined in section 12(2) of the Corporations Act) gains more than 10% of the voting power in WAM Active.
7. No Director appointment
   During the Condition Period, no person is appointed as a Director of WAM Active other than to comply with section 201A of the Corporations Act, or as appointed by shareholder resolution.
8. No Dividend

• ASX have advised that it requires formal submissions from Keybridge in relation to Listing Rule 6.1 and 12.5 and expressly reserves its rights in relation to the application of ASX Listing Rules to Keybridge and the proposed issue of CRPN. Keybridge will make such submissions. Keybridge notes that the terms of the CRPN are very similar to those of its previously listed CRPN instrument that satisfied all ASX Listing Rules.

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During the Condition Period, no dividend is declared or paid by WAM Active.

1. No NTA fall
   The reported after-taxNTA of WAM Active not declining by 5% or more below the after-taxNTA of WAM Active of $1.0213 per share announced to the ASX in the Net Asset Backing - December 2021 Report on 14 January 2022.
   And, the reported pre-taxNTA of WAM Active not declining by 5% or more below the pre-taxNTA of WAM Active of $0.9935 per share announced to the ASX in the Net Asset Backing - December 2021 Report on 14 January 2022.
2. No fall in the market of below 10% or more

The S&P/ASX All Ordinaries Accumulation Index not closing at a level that is 10% or more below the level of that index at 5:00pm (Melbourne Time) on the trading day immediately prior to Announcement Date and remaining at or below that level for at least two consecutive trading days during the Condition Period.

A bidder's statement, which will contain further information about the Offer, will be prepared in due course and sent to WAM Active's shareholders in accordance with the requirements of the Corporations Act.

The Offer will open for acceptances around that time and will be open for at least one month (unless withdrawn during that period under section 652B of the Corporations Act).

For further information in relation to the proposed takeover, please contact me on 0412 606 899.

Yours sincerely,

Nicholas Bolton

Managing Director

Keybridge Capital Limited

1. [e-mail]

1. [phone]

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