| Fri 14 Aug 2009, 10:35 | | NBK/NBKP - Nedbank Group/Nedbank - Voluntary announcement regarding the proposed |
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NED NBKP
NED NBKP
NBK/NBKP - Nedbank Group/Nedbank - Voluntary announcement regarding the proposed
acquisition by Nedbank Group of Imperial Holdings Limited`s 49,9% interest in
Imperial Bank Limited
Nedbank Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1966/010630/06)
Share code: NED NSX: NBK
ISIN: ZAE000004875
(`Nedbank Group`)
Nedbank Limited
(Incorporated in the Republic of South Africa)
(Registration number 1951/000009/06)
Share code: NBKP
ISIN: ZAE000043667
(`Nedbank`)
Voluntary announcement regarding the proposed acquisition by Nedbank Group of
Imperial Holdings Limited`s (`Imperial Holdings`) 49,9% interest in Imperial
Bank Limited (`Imperial Bank`) (`proposed acquisition`)
1 Introduction
Members are referred to the voluntary announcement published on the
Securities Exchange News Service on 29 May 2009, advising members that
Nedbank Group had entered into discussions with Imperial Holdings regarding
the acquisition of the remaining shares in Imperial Bank not already owned
by Nedbank Group. Members are advised that Nedbank Group has entered into a
non-binding memorandum of understanding in terms of which it has been
agreed, in principle, to acquire Imperial Holdings` shareholding of 49,9%
of the ordinary shares (`ordinary shares`) in Imperial Bank for a
consideration of R1 775 million (`the purchase consideration`).
As Nedbank Group is transacting with a material shareholder in a
subsidiary, the proposed acquisition is a small related-party transaction
in terms of the JSE Limited Listings Requirements. Once final terms have
been agreed with Imperial Holdings, Nedbank Group will publish a further
announcement in compliance with the JSE Limited Listings Requirements.
2 Nature of the businesses being acquired
Imperial Bank consists of four asset-based finance divisions, namely
Vehicle Finance, Supplier Asset Finance, Property Finance and Professional
Finance.
Vehicle Finance
In November 1995 Imperial Holdings established Imperial Bank to provide
asset-based finance in the South African market and to focus on motor
vehicle finance for customers of the Imperial Group and other motor
dealerships. In 2001 Imperial Bank branded its vehicle finance business
Motor Finance Corporation (`MFC`) as an independent brand. MFC is primarily
focused on servicing the dealer channel, in which segment it is well-
established. This division had total assets of R30,3 billion at 30 June
2009, and reported a net profit for the six months to 30 June 2009 of R68,6
million.
Property Finance
Imperial Bank Property Finance focuses on medium-sized commercial mortgages
and property developments. This division had total assets of R8,4 billion
at 30 June 2009, and reported a net profit for the six months to 30 June
2009 of R41,1 million.
Supplier Asset Finance
Supplier Asset Finance focuses on financing in niche markets, including
suppliers of `yellow goods` (ie vehicles and equipment used in the
construction and mining industries). This division had total assets of R3,5
billion at 30 June 2009, and reported a net loss for the six months to 30
June 2009 of R9,6 million.
Professional Finance
Professional Finance focuses principally on the provision of finance to
medical and dental professionals, and serves some 8 000 clients. This
division had total assets of R5,1 billion at 30 June 2009, and reported a
net profit for the six months to 30 June 2009 of R10,5 million.
3 Rationale for the proposed acquisition
Imperial Bank is currently a 50,1% subsidiary of Nedbank. As a consequence,
Nedbank has had a significant influence on the manner in which Imperial
Bank`s operations have been conducted in the past. The proposed acquisition
will allow Nedbank to:
* create a more efficient structure within which to conduct the combined
operations;
* benefit from the skills currently housed separately in two operations;
* improve the scale and profitability of its vehicle asset finance
business;
* compete more effectively in the motor dealership channel through the
MFC brand;
* cross-sell a broader range of products to the Imperial Bank client
base; and
* eliminate the inefficient capital and funding arrangement that it
currently has with Imperial Bank.
4 Regulatory approvals and conditions precedent
The proposed acquisition will be subject to various regulatory approvals
and conditions precedent.
5 Preference shares
Nedbank Group has informed Imperial Bank that it intends to make an offer
to acquire the shares of the holders of Imperial Bank non-redeemable, non-
participating, non-cumulative preference shares once the final terms have
been agreed with Imperial Holdings.
6 Purchase consideration
Up to a maximum of approximately 80% of the purchase consideration will be
settled in the form of Nedbank Group ordinary shares, currently held as
treasury shares, and the balance in cash.
Sandton
14 August 2009
Investment bank, corporate Independent lead sponsor to Nedbank
adviser and sponsor to Group
Nedbank Group and Nedbank Merrill Lynch South Africa (Pty)
Limited Limited
Nedbank Capital, a division
of Nedbank Limited
Independent lead sponsor to Attorneys
Nedbank Limited ENS
Investec Bank Limited
Sponsoring broker in Namibia
to Nedbank Group
Old Mutual Investment
Services (Namibia) (Pty) Ltd
20090803 Terms announcement (MoU) v9 (clean)_8774/glr/mw/7-8-2009
Date: 14/08/2009 10:35:01 Produced by the JSE SENS Department.
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