| Wed 16 Sep 2009, 16:11 | | NED/NBKP - Nedbank - Acquisition by Nedbank Group of Imperial Financial |
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NED NBKP
NED NBKP
NED/NBKP - Nedbank - Acquisition by Nedbank Group of Imperial Financial
Holdings` (`IFH`) 49,9% interest in Imperial Bank Limited (`Imperial Bank`)
(`acquisition`)
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 Limited`)
Acquisition by Nedbank Group of Imperial Financial Holdings` (`IFH`) 49,9%
interest in Imperial Bank Limited (`Imperial Bank`) (`acquisition`)
1. Introduction
Further to the voluntary announcement (`the voluntary announcement`)
published by Nedbank Group and Nedbank Limited on the Securities Exchange
News Service on 14 August 2009, Nedbank Limited has entered into a binding
agreement to acquire IFH`s shareholding of 49,9% of the ordinary shares
(`ordinary shares`) in Imperial Bank for a purchase consideration which
will be settled in instalments over a six month period commencing on the
fulfilment of the conditions precedent, the present value thereof being
approximately R 1 775 million (`the purchase consideration`) as at 30 June
2009, being the date from which Nedbank Limited will acquire the full
economic benefits of the acquisition. IFH is a wholly owned subsidiary of
Imperial Holdings Limited (`Imperial Holdings`).
It is the intention that, after the acquisition and subject to the
requisite regulatory authorities` and other approvals, the businesses of
Imperial Bank, comprising of substantially all of the assets and
liabilities of Imperial Bank could, when appropriate, be amalgamated with
businesses within Nedbank Limited.
This announcement is published in compliance with the JSE Limited Listings
Requirements (`Listings Requirements`) and to provide members with
information regarding the acquisition. For additional information relating
to the Imperial Bank businesses and the rationale for the acquisition,
please refer to the voluntary announcement.
2. Conditions precedent to the acquisition
The conditions precedent pertaining to the acquisition include:
2.1 the approval of the competition authorities, in so far as it is
necessary;
2.2 compliance with the Listings Requirements;
2.3 Nedbank Group obtaining a fairness opinion that declares that the
acquisition is fair in compliance with the Listings Requirements;
2.4 the Securities Regulation Panel confirming in writing that it does not
object to or has no jurisdiction in respect of IFH voting in respect
of the resolutions contemplated in paragraph 2.5 below;
2.5 the passing and to the extent necessary registration of whatever such
resolutions of Imperial Bank as are required to give effect to various
elements of the acquisition; and
2.6 the approvals of the Minister of Finance in terms of section 37 of the
Banks Act, 1990.
At the date of this announcement none of the conditions in this paragraph
have been fulfilled.
3. Settlement of the purchase consideration, election by Nedbank Limited and
placement of shares
3.1 Settlement
Subject to paragraph 3.2.2, the purchase consideration will be settled
in four instalments by Nedbank Limited over a period of six months.
3.2 Elections by Nedbank Limited
Nedbank may make elections in terms of which:
3.2.1 Other than in respect of the first installment, Nedbank
Group ordinary shares, currently held as treasury shares by
a subsidiary of Nedbank Group (`treasury shares`) equal in
value of up to 80% of the value of each installment, will
be acquired by IFH. The value of the treasury shares so
acquired will be determined by using a predetermined formula
based on the average market prices at each installment date.
IFH will acquire 80% in value of the first installment in
treasury shares; and
3.2.2 Nedbank can early settle in cash and/or treasury shares
which will be placed on behalf IFH.
4. Subordinated debt
It is the intention that, subject to the acquisition of 100% of the
ordinary shares and attainment of the necessary regulatory and other
approvals, the R800 million subordinated debt in Imperial Bank listed on
the Bond Exchange of South Africa will be assumed by Nedbank Limited.
5. Agreement with members of the Imperial Holdings group
Imperial Bank has historically funded motor vehicle transactions introduced
by members of the Imperial Holdings group of dealerships (`Imperial
dealerships`) through the Motor Finance Corporation division of Imperial
Bank (`MFC`). Within MFC, the Imperial dealerships originate approximately
30 000 loans for new and used vehicles each year.
5.1 Imperial Bank, Nedbank Limited, Associated Motor Holdings
(Proprietary) Limited (`AMH`) and Imperial Holdings have entered into
an agreement which will become effective after the acquisition becomes
unconditional and subject to the necessary regulatory approval, in
terms of which:
5.1.1 Imperial Bank will create a new specialist sub-division
within MFC that will be dedicated to servicing Imperial
dealerships (`the division`);
5.1.2 the Imperial dealerships will deal with the division on a
non exclusive basis;
5.1.3 Imperial Holdings and AMH will collectively participate in
50% of the profits and losses of the division in respect of
vehicle asset funding introduced by Imperial dealerships to
the division;
5.1.4 If and when the business of Imperial Bank is amalgamated
with that of Nedbank Limited, this agreement will apply to
Nedbank Limited instead of Imperial Bank; and
5.1.5 Formal channels of communication will be established to
ensure that the division regularly benefits from the
combined market knowledge, experience and infrastructure
that exist within both Imperial Bank and the Imperial
Holdings group.
6. Related-party transaction
As Nedbank Group is transacting with a material shareholder in a
subsidiary, the acquisition is a small related-party transaction in terms
of the Listings Requirements. In terms of the Listings Requirements,
shareholder approval for a small related-party transaction is not required
should the terms and conditions thereof be found to be fair.
To comply with the Listings Requirements Nedbank Group appointed
PricewaterhouseCoopers Corporate Finance (Proprietary) Limited as
independent expert (`PwC` or `the independent expert`). PwC presented its
preliminary view to the Nedbank Group Board Subcommittee which, subject to
JSE Limited approval, was that the acquisition was found to be fair to the
members of Nedbank Group. A further announcement will be made when JSE
Limited approves the fairness opinion. Once approved, the fairness opinion
will be available for inspection for 28 days after such further
announcement at Block A, Ground Floor, Nedbank Sandton, 135 Rivonia Road,
Sandown, Sandton, 2196.
7. Pro forma financial effects of the acquisition
Based on Nedbank Group`s published unaudited consolidated results for the
six months ended 30 June 2009, the unaudited pro forma financial effects
(`financial effects`) of the acquisition are set out in the table below.
These financial effects are for illustrative purposes only to provide
information on how the acquisition affects the financial information
presented by Nedbank Group and due to their pro forma nature, may not give
a true reflection of Nedbank Group`s financial position or financial
performance. These financial effects are the responsibility of the board of
directors of Nedbank Group.
The financial effects for the six months ended 30 June 2009:
Before Pro After Change
the forma the %
acquisit adjustm acquisi
ion (1) ents tion(2)
Earnings per share (`EPS`) (cents) 619 (5) 614 (0,9%)
Earnings per share (cents) - diluted 611 (5) 606 (0,8%)
Headline earnings per share (`HEPS`) 480 (1) 479 (0,3%)
(cents)
Headline earnings per share (cents) 474 (1) 473 (0,2%)
- diluted
Net asset value per share (`NAV`) 8 762 28 8 790 0,3%
(cents) (4)
Tangible net asset value per share 7 049 77 7 126 1,1%
(`TNAV`) (cents) (4)
Number of shares in issue (million) 428,31 12,61 440,92 2,9%
(3)
Weighted average number of shares in 413,93 12,61 426,54 3,0%
issue (million)
Diluted weighted average number of 419,32 12,61 431,93 3,0%
shares in issue (million)
Notes:
1. Based on IFRS reviewed consolidated financial information of Nedbank
Group for the six months ended 30 June 2009.
2. In calculating the financial effects on EPS, diluted EPS, HEPS,
diluted HEPS, NAV and TNAV it was assumed that the acquisition was
implemented on 30 June 2009 for balance sheet purposes and 1 January
2009 for income statement purposes.
3. Nedbank Group ordinary shares net of treasury shares held by a
subsidiary of Nedbank Group.
4. Assuming a purchase consideration for 49.9% of the ordinary shares at
a present value at 30 June 2009 of R1 775 million, consisting of R355
million in cash and the balance of R1 420 million in Nedbank Group
treasury shares based on the closing Nedbank Group share price as at 9
September 2009 of R112.60.
Sandton
16 September 2009
Investment bank, corporate Independent lead sponsor to
adviser and sponsors to Nedbank Group
Nedbank Group and Nedbank -Merrill Lynch South Africa
Limited (Pty) Ltd-
-Nedbank Capital, a division
of Nedbank Limited-
Independent professional Attorneys
expert
-PricewaterhouseCoopers -ENS-
Corporate Finance (Pty) Ltd-
Sponsoring broker in Namibia Independent lead sponsor to
to Nedbank Group Nedbank Limited
-Old Mutual Investment -Investec Bank Limited-
Services-
Date: 16/09/2009 16:11:02 Produced by the JSE SENS Department.
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