28.9 THE OFFER
Section 164 (11) and (16) provide that within, 5 business days after the latest of the day on which the transaction is approved by the resolution is effective, the last day for receipt of demands, or the day the company receives a demand, the company must send to each shareholder who sent a demand a written offer to pay an amount considered by the Company’s Directors to be fair value of the relevant shares determined as at the date on which, and time immediately before the Company adopted the resolution, accompanied by a statement showing how that value was determined.
Every offer in respect of shares of the same class or series must be made on the same terms. Every offer will lapse if it has not been accepted within 30 business days after it was made.
Section 164(13) Provides;
If a shareholder accepts an offer from the company under Section 164(11)
(a) The shareholder must deliver the relevant share certificates to the Company or its transfer agent or in the case of uncertificated shares take the steps required in terms of Section 53 to direct the transfer of those shares to the Company or its transfer agent; and
(b) The company must pay the shareholder the agreed amount within 10 business days after the shareholder accepted the offer and delivers the certificates or direct the transfer of uncertificated shares to the company.
There could be dramatic consequences if the company can’t pay the fair value of the minority shares. There could be a problem in that the Company is not in a position to pay for the shares and then under s 164(14)(b) and 164(17) the company can apply to court and tell the court they are unable to pay the debts as they fall due for the next twelve months. The court may then make an order that it is just and equitable having regard to the Company’s financial circumstances. The court order must also ensure that the person to whom the company owes money in terms of s 164 is paid at the earliest possible date compatible with the Company’s other obligations as they fall due and payable.