| Tue 30 Mar 2010, 9:10 | | INL/INP/RBG - Investec/Investec Plc/Rensburg Shepp |
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INL INP
INL INP
INL/INP/RBG - Investec/Investec Plc/Rensburg Sheppards Plc - Offer for
Rensburg Sheppards plc
Investec Limited
Incorporated in the Republic of South Africa
Registration number 1925/002833/06
JSE share code: INL
ISIN: ZAE000081949
Investec plc
Incorporated in England and Wales
Registration number 3633621
JSE share code: INP
ISIN: GB00B17BBQ50
Rensburg Sheppards plc
Incorporated in England and Wales
Registration number 02146011
LSE share code: RBG
ISIN: GB00B0712D26
Offer for Rensburg Sheppards plc
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR
FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OF SUCH JURISDICTION
30 March 2010
RECOMMENDED SHARE OFFER
for
Rensburg Sheppards plc ("Rensburg Sheppards")
by
Investec plc ("Investec")
Summary
- The Independent Rensburg Sheppards Directors and the Board of
Directors of Investec are pleased to announce that they have reached
agreement on the terms of a recommended all share offer under which
Investec will acquire the entire issued and to be issued ordinary share
capital of Rensburg Sheppards not already owned by it (the "Offer"). It
is intended that the Offer will be implemented by way of a Court
sanctioned scheme of arrangement under Part 26 of the Companies Act.
- Investec currently has an interest in approximately 47 per cent. of
Rensburg Sheppards` existing issued share capital and has a long and
established relationship with Rensburg Sheppards.
- Under the terms of the Offer, Rensburg Sheppards Shareholders will
receive 1.63 fully paid newly issued Investec Shares in exchange for each
fully paid Rensburg Sheppards Share currently held.
- No dividends shall be paid by Rensburg Sheppards between the date of
this announcement and the Effective Date. The Investec Shares issued to
Rensburg Sheppards Shareholders pursuant to the Offer will rank for
Investec`s final dividend in respect of the year ending 31 March 2010,
expected to be paid in August 2010.
- The Offer values each Rensburg Sheppards Share at 916 pence and the
entire issued and to be issued share capital of Rensburg Sheppards at
approximately GBP412 million based on the closing price of Investec of
562 pence on 29 March 2010 (being the last Business Day prior to the date
of this announcement and start of the offer period).
- The value of 916 pence for each Rensburg Sheppards Share represents
a premium of:
- approximately 48 per cent. to the closing mid-market price per
Rensburg Sheppards Share, of 620 pence, on 29 March 2010 (being the
last Business Day prior to the date of this announcement and the
start of the offer period);
- approximately 50 per cent. to the average closing mid-market
price per Rensburg Sheppards Share, of 609 pence, over the one month
trading period to 29 March 2010; and
- approximately 54 per cent. to the average closing mid-market
price per Rensburg Sheppards Share, of 596 pence, for the three
months trading period to 29 March 2010.
- Investec has obtained letters of intent from Schroders Investment
Management Limited and BlackRock Investment Management (UK) Limited to
vote in favour of the Scheme and the resolutions to be passed at the
Court Meeting and to vote in favour of the General Meeting Resolution in
respect of their respective holdings of 3,398,743 and 1,294,833 Rensburg
Sheppards Shares representing approximately 7.7 per cent. and 2.9 per
cent. of the existing issued share capital of Rensburg Sheppards
respectively.
- The new Investec Shares to be issued under the Scheme are expected
to represent approximately 7.8 per cent. of the issued share capital of
Investec and 5.1 per cent. of the combined issued share capital of
Investec and Investec Limited in each case as enlarged by the acquisition
of Rensburg Sheppards.
- Investec is a public limited company registered in England and
Wales. The Investec Shares are listed on the Official List and are traded
on the London Stock Exchange and are a constituent of the FTSE 100 index.
Investec is an international, specialist bank and asset manager that
provides a diverse range of financial products and services to a select
client base. Investec is organised as a network comprising five business
divisions: Private Client Activities, Capital Markets, Investment
Banking, Asset Management and Property Activities. Upon completion of the
Offer, Rensburg Sheppards will become part of Investec`s Private Client
Activities division.
- Rensburg Sheppards is a public limited company registered in England
and Wales. The Rensburg Sheppards Shares are listed on the Official List
of the London Stock Exchange. Rensburg Sheppards has a long history of
providing investment management services from its origins dating back to
the mid-nineteenth century. In its current form Rensburg Sheppards came
about through the reverse merger of Investec`s Carr Sheppards Crosthwaite
Limited business with the then Rensburg plc. The merger transformed
Rensburg Sheppards into a leading investment management firm in the UK.
Rensburg Sheppards provides high quality professional advice and services
to its clients. It has a broad geographic spread with eleven regional
offices throughout the UK and approximately 600 employees. The Rensburg
Sheppards Group had funds under management of GBP12.3 billion as at 31
December 2009 and comprises Rensburg Sheppards Investment Management and
Rensburg Fund Management.
- Investec`s current plans for Rensburg Sheppards do not involve any
material change in its executive management team, operating structure or
commercial offering. There is limited overlap between Investec and
Rensburg Sheppards operations ensuring continuity for clients and
employees.
- As Stephen Koseff and Bernard Kantor are directors of both
companies, they have absented themselves from all deliberations of the
Rensburg Sheppards board in connection with the Offer, accordingly the
Offer has been considered and recommended by the Independent Rensburg
Sheppards Directors.
- The Independent Rensburg Sheppards Directors, who have been so
advised by Fenchurch Advisory Partners, consider the terms of the Offer
to be fair and reasonable. In providing advice to the Independent
Rensburg Sheppards Directors, Fenchurch Advisory Partners has taken into
account the commercial assessments of these directors. In addition, the
Independent Rensburg Sheppards Directors consider the terms of the Offer
to be in the best interests of Rensburg Sheppards Shareholders as a
whole. Accordingly, the Independent Rensburg Sheppards Directors intend
to recommend unanimously that Rensburg Sheppards Shareholders vote in
favour of the Scheme at the Court Meeting and in favour of the General
Meeting Resolution, as they have irrevocably undertaken to do themselves
in respect of their own beneficial holdings of 129,948 Rensburg Sheppards
Shares (representing as at the date of this announcement, in aggregate,
approximately 0.3 per cent. of the existing issued share capital of
Rensburg Sheppards).
- The Offer is conditional, among other things, on certain regulatory
conditions being fulfilled to the reasonable satisfaction of Investec and
Rensburg Sheppards, the passing of resolutions by Rensburg Sheppards
Shareholders and the sanction of the Court.
- It is expected that the Scheme Document will be posted to Rensburg
Sheppards Shareholders in late April and the Court Meeting and General
Meeting are expected to take place in late May or early June 2010.
Further details will be set out in the Scheme Document.
- Commenting on the Offer, Christopher Clarke, Chairman of Rensburg
Sheppards, said:
- "The independent directors of Rensburg Sheppards are pleased to
recommend this offer which is an attractive outcome for our shareholders,
clients and employees. The offer values Rensburg Sheppards at a
significant premium to its current share price and the offer
consideration is in the form of a more liquid FTSE 100 security. This
combination is underpinned by a compelling fit and sees Rensburg
Sheppards becoming part of a major and respected international financial
services group."
Commenting on the Offer, Steve Elliott, Chief Executive of Rensburg Sheppards,
said:
"Rensburg Sheppards is a successful business with a respected brand,
experienced and knowledgeable employees and a loyal client base. This
transaction provides clarity over our ownership and is enhanced by a strong
strategic fit and common vision. With very limited overlap between Rensburg
Sheppards` and Investec`s existing operations, continuity will be ensured for
clients and employees. Being part of Investec will reinforce the strong
momentum in our business and we will be well placed to grow organically and
through participation in industry consolidation."
Commenting on the Offer, Stephen Koseff, Chief Executive of Investec, said:
"Rensburg Sheppards has been a good investment for Investec over the past few
years and the proposal we have announced today is the natural next step for
both businesses. Investec`s wealth and asset management activities have grown
strongly in recent times and we believe that Rensburg Sheppards will thrive as
part of the Investec Group. We look forward to supporting Rensburg Sheppards
and enhancing our strategic position by building an even stronger business in
this core area of the market."
Commenting on the Offer, Bernard Kantor, Managing Director of Investec, said:
"We have an already strong and close relationship which is being reinforced
with today`s announcement. We have been impressed by how well the business has
performed and look forward to investing in its future development. This
transaction is consistent with our strategy of growing our asset management
and private client platforms and delivering superior service and products to
our customers."
Enquiries:
Investec
Ursula Nobrega +44 (0) 20 7597 5546
Stephen Koseff
Bernard Kantor
Rensburg Sheppards
Christopher Clarke +44 (0) 20 7597 1234
Steve Elliott
Jonathan Wragg
Goldman Sachs International (Financial
Adviser and Sponsor to Investec)
Luigi Rizzo +44 (0) 20 7774 1000
Dirk Lievens
John Brennan
Fenchurch Advisory Partners (Financial
Adviser to Rensburg Sheppards)
Malik Karim +44 (0) 20 7382 2222
Graham Marchant
BofA Merrill Lynch (Corporate Broker to
Investec)
Paul Frankfurt +44 (0) 20 7628 1000
Will Smith
Numis Securities (Corporate Broker to
Rensburg Sheppards)
Christopher Wilkinson +44 (0) 20 7260 1347
Andrew Holloway
Citigate (Public Relations Adviser to
Investec)
Jonathan Clare +44 (0) 20 7638 9571
Tom Baldock
Ged Brumby
Hudson Sandler (Public Relations Adviser
to Rensburg Sheppards)
Nick Lyon +44 (0) 20 7796 4133
Michael Sandler
The Offer will be made on the terms and subject to the conditions and further
terms set out herein in Appendix I to this announcement and the further terms
and conditions set out in the Scheme Document and Forms of Proxy when issued.
The bases and sources of certain financial information contained in this
announcement are set out in Appendix II to this announcement. A summary of the
irrevocable undertakings given by the Independent Rensburg Sheppards Directors
and letters of intent received from Rensburg Sheppards Shareholders is
contained in Appendix III to this announcement. Certain terms used in this
announcement are defined in Appendix IV to this announcement.
Goldman Sachs International, which is authorised and regulated in the UK by
the Financial Services Authority, is acting for Investec and no one else in
connection with the Offer and this announcement and will not be responsible to
anyone other than Investec for providing the protections afforded to clients
of Goldman Sachs International or for providing advice in connection with the
Offer or any matter referred to herein.
Fenchurch Advisory Partners, which is authorised and regulated in the UK by
the Financial Services Authority, is acting exclusively for Rensburg Sheppards
and no one else in connection with the Offer and this announcement and will
not be responsible to anyone other than Rensburg Sheppards for providing the
protections afforded to clients of Fenchurch Advisory Partners or for
providing advice in connection with the Offer or any matter referred to
herein.
Merrill Lynch International (a subsidiary of Bank of America Corporation)
("BofA Merrill Lynch"), which is authorised and regulated in the UK by the
Financial Services Authority, is acting as corporate broker for Investec and
no one else in connection with the contents of this document and will not be
responsible to anyone other than Investec for providing the protections
afforded to clients of BofA Merrill Lynch or for providing advice in
connection with this document or any matter referred to herein.
Numis Securities Limited, which is authorised and regulated in the UK by the
Financial Services Authority, is acting as corporate broker for Rensburg
Sheppards and for no one else in connection with the contents of this document
and will not be responsible to anyone other than Rensburg Sheppards for
providing the protections afforded to clients of Numis Securities Limited, or
for providing advice in relation to the contents of this document or any
matters referred to herein.
This announcement is for informational purposes only and does not constitute
an offer to sell or an invitation to purchase any securities or the
solicitation of an offer to buy any securities, pursuant to the Offer or
otherwise. The Offer will be made solely by means of the Scheme Document,
which will contain the full terms and conditions of the Offer, including
details of how to vote in favour of the Scheme. Rensburg Sheppards will
prepare the Scheme Document to be distributed to Rensburg Sheppards
Shareholders. Rensburg Sheppards and Investec urge Rensburg Sheppards
Shareholders to read the Scheme Document when it becomes available because it
will contain important information in relation to the Offer.
This announcement does not constitute a prospectus or prospectus equivalent
document.
This announcement has been prepared for the purpose of complying with English
law and the City Code and the information disclosed may not be the same as
that which would have been disclosed if this announcement had been prepared in
accordance with the laws of jurisdictions outside the United Kingdom.
The release, publication or distribution of this announcement in certain
jurisdictions may be restricted by law. Persons who are not resident in the
United Kingdom or who are subject to other jurisdictions should inform
themselves of, and observe, any applicable requirements.
Unless otherwise determined by Investec or required by the City Code, and
permitted by applicable law and regulation, the Offer will not be made,
directly or indirectly, in, into or from a Restricted Jurisdiction where to do
so would violate the laws in that jurisdiction, and the Offer will not be
capable of acceptance from or within a Restricted Jurisdiction. Accordingly,
copies of this announcement and all documents relating to the Offer are not
being, and must not be, directly or indirectly, mailed or otherwise forwarded,
distributed or sent in, into or from a Restricted Jurisdiction where to do so
would violate the laws in that jurisdiction, and persons receiving this
announcement and all documents relating to the Offer (including custodians,
nominees and trustees) must not mail or otherwise distribute or send them in,
into or from such jurisdictions as doing so may invalidate any purported
acceptance of the Offer.
The availability of the Offer to Rensburg Sheppards Shareholders who are not
resident in the United Kingdom may be affected by the laws of the relevant
jurisdictions in which they are resident. Persons who are not resident in the
United Kingdom should inform themselves of, and observe, any applicable
requirements. Further details in relation to overseas shareholders will be
contained in the Scheme Document.
The Offer relates to the shares in an English company and is proposed to be
made by means of a scheme of arrangement provided for under company law of the
United Kingdom. The scheme of arrangement will relate to the shares of a UK
company that is a `foreign private issuer` as defined under Rule 3b-4 under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"). A
transaction effected by means of a scheme of arrangement is not subject to the
proxy and tender offer rules under the Exchange Act. Accordingly, the Offer is
subject to the disclosure requirements and practices applicable in the UK to
schemes of arrangement, which differ from the disclosure requirements of the
US proxy and tender offer rules. Financial information included in the
relevant documentation will have been prepared in accordance with accounting
standards applicable in the UK that may not be comparable to the financial
statements of US companies.
Any securities to be offered pursuant to the Offer as described in this
announcement have not been and will not be registered under the US Securities
Act of 1933, as amended (the "Securities Act"), or under the securities laws
of any state, district or other jurisdiction of the United States, or of
Australia, Canada or Japan. Accordingly, such securities may not be offered,
sold or delivered, directly or indirectly, in or into such jurisdictions
except pursuant to exemptions from applicable requirements of such
jurisdictions. It is expected that the Investec Shares to be issued in the
Scheme will be issued in reliance upon the exemption from the registration
requirements of the Securities Act provided by Section 3(a)(10) thereof. Under
applicable US securities laws, persons (whether or not US persons) who are or
will be "affiliates" (within the meaning of the Securities Act) of Rensburg
Sheppards or Investec prior to, or of Investec after, the Effective Date will
be subject to certain transfer restrictions relating to the Investec Shares
received in connection with the Scheme.
If Investec exercises its right to implement the Offer by way of a Takeover
Offer, the Offer will be made in compliance with applicable US laws and
regulations, including applicable provisions of the tender offer rules under
the Exchange Act.
Forward Looking Statements
This announcement contains statements about Investec and Rensburg Sheppards
that are, or may be, forward looking statements. All statements other than
statements of historical facts included in this announcement may be forward
looking statements. Without limitation, any statements preceded or followed by
or that include the words "targets", "plans", "believes", "expects", "aims",
"intends", "will", "may", "anticipates", "estimates", "projects" or words or
terms of similar substance or the negative thereof, are forward looking
statements. Forward looking statements include statements relating to the
following: (i) future capital expenditures, expenses, revenues, earnings,
synergies, economic performance, indebtedness, financial condition, dividend
policy, losses and future prospects; (ii) business and management strategies
and the expansion and growth of Investec`s or Rensburg Sheppards` operations
and potential synergies resulting from the Offer; and (iii) the effects of
government regulation on Investec`s or Rensburg Sheppards` business.
Such forward looking statements involve risks and uncertainties that could
significantly affect expected results and are based on certain key
assumptions. Many factors could cause actual results to differ materially from
those projected or implied in any forward looking statements. Due to such
uncertainties and risks, readers are cautioned not to place undue reliance on
such forward looking statements, which speak only as at the date hereof.
Investec and Rensburg Sheppards disclaim any obligation to update any forward
looking or other statements contained herein, except as required by applicable
law.
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the Code, if any person is, or will, as a
result of any transaction, become, "interested" (directly or indirectly) in 1
per cent. or more of any class of "relevant securities" of Investec or of
Rensburg Sheppards (as applicable), all "dealings" in any "relevant
securities" of Investec or Rensburg Sheppards (as applicable) (including by
means of an option in respect of, or a derivative referenced to, any such
"relevant securities") must be publicly disclosed by no later than 3.30 p.m.
(London time) on the Business Day following the date of the relevant
transaction. This requirement will continue until the Effective Date or on the
date the Scheme is otherwise withdrawn. If two or more persons act together
pursuant to an agreement or understanding, whether formal or informal, to
acquire an "interest" in "relevant securities" of Investec or of Rensburg
Sheppards, they will be deemed to be a single person for the purpose of Rule
8.3.
Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevant
securities" of Investec or of Rensburg Sheppards by Investec or Rensburg
Sheppards, or by any of their respective "associates", must be disclosed by no
later than 12.00 noon (London time) on the Business Day following the date of
the relevant transaction.
A disclosure table, giving details of the companies in whose "relevant
securities" "dealings" should be disclosed, and the number of such securities
in issue, can be found on the Panel`s website at
http://www.thetakeoverpanel.org.uk.
"Interests in securities" arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an "interest" by
virtue of the ownership or control of securities, or by virtue of any option
in respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the Code, which can also be found on
the Panel`s website. If you are in any doubt as to whether or not you are
required to disclose a "dealing" under Rule 8, please contact an independent
financial adviser authorised under the Financial Services and Markets Act
2000, consult the Panel`s website at http://www.thetakeoverpanel.org.uk or
contact the Panel on telephone number +44 (0) 20 7638 0129 or fax +44 (0) 20
7236 7013.
This summary should be read in conjunction with the full text of this
announcement. Appendix I to this announcement contains the conditions to, and
certain further terms of, the Offer. Appendix II to this announcement contains
further details of the sources of information and bases of calculations set
out in this announcement. Appendix III contains a summary of the irrevocable
undertakings given by the Rensburg Sheppards Directors and letters of intent
provided by Rensburg Sheppards Shareholders and Appendix IV contains
definitions of certain expressions used in this summary and in this
announcement.
Publication on Website and availability of Hard Copies
A copy of this announcement will be made available, free of charge, at
www.investec.com and www.rensburgsheppards.plc.uk by no later than 12 noon
(London time) on 31 March 2010.
You may request a hard copy of this announcement, free of charge, by
contacting Capita Registrars on 0870 162 3131. You may also request that all
future documents, announcements and information to be sent to you in relation
to the Offer should be in hard copy form.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR
FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OF SUCH JURISDICTION
30 March 2010
RECOMMENDED SHARE OFFER
for
Rensburg Sheppards plc ("Rensburg Sheppards")
by
Investec plc ("Investec")
1. Introduction
The Independent Rensburg Sheppards Directors and the Board of Directors of
Investec are pleased to announce that they have reached agreement on the terms
of a recommended all share offer under which Investec will acquire the entire
issued and to be issued ordinary share capital of Rensburg Sheppards, not
already owned by it (the "Offer").
Investec currently has an interest in approximately 47 per cent. of Rensburg
Sheppards` existing issued share capital and accordingly the proposed Offer is
based on the established relationship between Rensburg Sheppards and Investec.
2. The Offer
It is intended that the Offer will be implemented by way of a Court sanctioned
scheme of arrangement under Part 26 of the Companies Act.
Under the Offer, which will be subject to the conditions and further terms set
out below and in Appendix I and the full terms and conditions which will be
set out in the Scheme Document, Rensburg Sheppards Shareholders will be
entitled to receive:
for each fully paid 1.63 fully paid newly
Rensburg Sheppards Share issued Investec Shares
currently held
No dividends shall be paid by Rensburg Sheppards between the date of this
announcement and the Effective Date. The Investec Shares issued to Rensburg
Sheppards Shareholders pursuant to the Offer will rank for Investec`s final
dividend in respect of the year ending 31 March 2010, expected to be paid in
August 2010.
The Offer values each Rensburg Sheppards Share at 916 pence and the entire
issued and to be issued share capital of Rensburg Sheppards at approximately
GBP412 million based on the closing price of Investec of 562 pence on 29 March
2010 (being the last Business Day prior to the date of this announcement and
start of the offer period).
The value of 916 pence for each Rensburg Sheppards Share represents a premium
of:
- approximately 48 per cent. to the closing mid-market price per
Rensburg Sheppards Share, of 620 pence, on 29 March 2010 (being the last
Business Day prior to the date of this announcement and the start of the
offer period);
- approximately 50 per cent. to the average closing mid-market price
per Rensburg Sheppards Share, of 609 pence, over the one month trading
period to 29 March 2010; and
- approximately 54 per cent. to the average closing mid-market price
per Rensburg Sheppards Share, of 596 pence, for the three months trading
period to 29 March 2010.
The new Investec Shares to be issued under the Scheme are expected to
represent approximately 7.8 per cent. of the issued share capital of Investec
and 5.1 per cent. of the combined issued share capital of Investec and
Investec Limited in each case as enlarged by the acquisition of Rensburg
Sheppards.
The new Investec Shares will be issued credited as fully paid and will rank
pari passu in all respects with existing Investec Shares. The new Investec
Shares will be issued on the Scheme becoming effective to Rensburg Sheppards
Shareholders on the register at the close of business at the Scheme Record
Time.
Fractions of new Investec Shares will not be allotted or issued pursuant to
the Offer and will be disregarded.
It is expected that the Scheme Document will be posted to Rensburg Sheppards
Shareholders in late April and the Court Meeting and General Meeting are
expected to take place in late May or early June 2010. Further details will be
set out in the Scheme Document. Investec will be preparing a prospectus for
the purposes of section 85(1) of the Financial Services and Markets Act 2000,
which will be made available on www.investec.com on or around the date of
posting of the Scheme Document.
3. Independent Rensburg Sheppards Directors
As Stephen Koseff and Bernard Kantor are directors of both companies, they
have absented themselves from all deliberations of the Rensburg Sheppards
board in connection with the Offer, accordingly the Offer will only be
considered and recommended by the Independent Rensburg Sheppards Directors.
The lndependent Rensburg Sheppards Directors (as at the date of this
announcement) are Christopher Clarke, Steve Elliott, Jonathan Wragg, David
Bulteel, Michael Haan, Robert Lister, Ian Maxwell Scott, Jonathan Seal, Isla
Smith, Tomas Street, Judith Price and Simon Kaye.
4. Background to and reasons for the Offer
As a specialist bank and asset manager, the Investec Group has focused on
developing a balanced and diversified portfolio of businesses serving the
needs of select market niches where it can compete effectively. The Investec
Group`s wealth and asset management activities have developed strongly over
the past few years and are important and core components of its business
model.
The Investec Group seeks to maintain an appropriate balance between revenue
earned from operational risk businesses and revenue earned from financial risk
businesses. This ensures that the Investec Group is not over reliant on any
one part of its business to sustain its activities and that it has a large
recurring revenue base that the directors of Investec believe enable it to
better navigate through varying cycles and to support its long-term growth
objectives.
The Investec Group`s current strategic objectives include increasing the
proportion of its non-lending revenue base and moving the organisation onto
the front foot thereby capitalising on opportunities within the dislocated
financial system. Against this background, the Investec Group intends to
continue to strengthen and develop its wealth and asset management and private
client platforms.
In its current form Rensburg Sheppards came about on 6 May 2005 through the
reverse merger of Investec`s Carr Sheppards Crosthwaite Limited`s business
with the then Rensburg plc. Following that transformational merger, Investec
retained a major shareholding and currently has an approximate 47 per cent.
interest in Rensburg Sheppards` issued share capital.
During the five year period that Investec has been a major shareholder of
Rensburg Sheppards, the company has made strong progress in developing and
growing its business and has been successful in its business strategy. As a
shareholder, Investec has benefited from the business development, share price
performance and consistent dividend stream that have been delivered. Investec
believes that Rensburg Sheppards` business is a core component of the Investec
Group and this has been indicated by Investec`s continued shareholding level
and support.
Investec intends to retain Rensburg Sheppards` brand for the business acquired
in order to maximise the opportunity in the UK onshore market and is
enthusiastic about supporting Rensburg Sheppards` continued business
development including any future consolidation strategy.
Investec believes that this combination of Investec`s existing wealth
management businesses with that of Rensburg Sheppards will create a strong
wealth management platform allowing it to significantly enhance its strategic
position and that there is great potential to generate longer term value and a
more stable future for the combined business and its employees following
completion of this transaction.
5. Recommendation
The Independent Rensburg Sheppards Directors, who have been so advised by
Fenchurch Advisory Partners, consider the terms of the Offer to be fair and
reasonable. In providing advice to the Independent Rensburg Sheppards
Directors, Fenchurch Advisory Partners has taken into account the commercial
assessments of the Independent Rensburg Sheppards Directors. In addition, the
Independent Rensburg Sheppards Directors consider the terms of the Offer to be
in the best interests of Rensburg Sheppards Shareholders as a whole.
Accordingly, the Independent Rensburg Sheppards Directors intend to recommend
unanimously that Rensburg Sheppards Shareholders vote in favour of the Scheme
at the Court Meeting and in favour of the General Meeting Resolution, as they
have irrevocably undertaken to do themselves in respect of their own
beneficial holdings of 129,948 Rensburg Sheppards Shares (representing as at
the date of this announcement, in aggregate, approximately 0.3 per cent. of
the existing issued share capital of Rensburg Sheppards).
6. Irrevocable undertakings and letters of intent
Investec has received irrevocable undertakings from each of the Independent
Rensburg Sheppards Directors to vote or procure the vote in favour of the
resolutions to be proposed at the Court Meeting and the General Meeting in
respect of their own beneficial holdings of 129,948 Rensburg Sheppards Shares,
representing approximately 0.3 per cent. of the existing issued share capital
of Rensburg Sheppards. The undertakings given by the Independent Rensburg
Sheppards Directors cease to be binding if the Scheme is withdrawn or lapses,
unless Investec exercises its right to announce a Takeover Offer for the
entire issued share capital of Rensburg Sheppards, not already owned by it, in
which case it shall cease to have effect on the withdrawal or lapsing of the
Takeover Offer. The Independent Rensburg Sheppards Directors hold a total of
401,127 Rensburg Sheppards Shares (representing as at the date of this
announcement, in aggregate, approximately 0.9 per cent. of the existing issued
share capital of Rensburg Sheppards) through the Rensburg Sheppards Employee
Benefit Trust which are not capable of being subject to irrevocable
undertakings.
Investec has obtained letters of intent from Schroders Investment Management
Limited and BlackRock Investment Management (UK) Limited to vote in favour of
the Scheme and the resolutions to be passed at the Court Meeting and to vote
in favour of the General Meeting Resolution in respect of their respective
holdings of 3,398,743 and 1,294,833 Rensburg Sheppards Shares representing
approximately 7.7 per cent. and 2.9 per cent. of the existing issued share
capital of Rensburg Sheppards respectively.
Further details of these irrevocable undertakings and the letters of intent
are set out in Appendix III to this announcement.
7. Background to and reasons for the recommendation
In assessing the Offer from Investec, the Independent Rensburg Sheppards
Directors have taken into account a number of factors, including:
- The Offer represents a premium of approximately 48 per cent. to the
closing mid-market price of per Rensburg Sheppards Share, of 620 pence,
on 29 March 2010 (being the last Business Day prior to the date of this
announcement);
- The consideration offered provides Rensburg Sheppards Shareholders
an interest in a more liquid FTSE 100 security;
- Investec intends to strengthen further its presence in wealth and
asset management and Rensburg Sheppards forms a core strategic component
of the Investec Group;
- Investec is a strong partner to support the strategic development
and growth of Rensburg Sheppards for the benefit of all stakeholders; and
- Clients and employees will benefit from being part of a major and
respected international financial services organisation.
In consideration of these factors the Independent Rensburg Sheppards Directors
unanimously recommend the Offer to Rensburg Sheppards Shareholders as set out
in paragraph 5 above.
8. Information on the Investec Group
The Investec Group is an international, specialist bank and asset manager that
provides a diverse range of financial products and services to a select client
base. It was founded as a leasing company in Johannesburg in 1974, acquired a
banking licence in 1980 and was listed on the JSE Limited South Africa in
1986.
In July 2002 the Investec Group implemented a dual listed companies structure,
which synthetically merged Investec, listed on the Official List and traded on
the London Stock Exchange with Investec Limited, which is listed on the
Johannesburg Stock Exchange. Investec also has a secondary listing on the
Johannesburg Stock Exchange. Investec is a constituent of the FTSE 100 index
and together with Investec Limited has a pro forma market capitalisation of
approximately GBP4.2 billion. In 2003 the Investec Group concluded a
significant empowerment transaction in which the Investec Group`s empowerment
partners collectively acquired a 25.1 per cent. stake in the issued share
capital of Investec Limited.
The Investec Group has expanded through a combination of substantial organic
growth and a series of strategic acquisitions. It now has an efficient
integrated international business platform offering all of its core activities
in the United Kingdom and South Africa, with select activities also in
Australia.
The Investec Group is organised as a network comprising five business
divisions: Private Client Activities, Capital Markets, Investment Banking,
Asset Management and Property Activities. Its head office provides certain
group-wide integrating functions and is also responsible for its central
funding and the Trade Finance business.
For the year ended 31 March 2009 the Investec Group reported operating profit
(net profit before tax, goodwill and non-operating items but after earnings
attributable to minorities) of GBP397.0 million (GBP216.0 million for the six
months ended 30 September 2009), assets of GBP37.1 billion (GBP40.3 billion
for the six months ended 30 September 2009) and total capital resources of
GBP3.8 billion (GBP4.1 billion for the six months ended 30 September 2009).
On the 18 March 2010, the Investec Group announced its pre-close briefing for
the financial year ending 31 March 2010. For the year ending 31 March 2010,
the Investec Group expects operating profit (net profit before tax, goodwill
and non-operating items but after earnings attributable to minorities) to be
marginally higher than the prior year. Since 31 March 2009 to 28 February 2010
loans and advances have increased 10 per cent. to GBP17.8 billion, customer
deposits have increased 37 per cent. to GBP20.0 billion and funds under
management have increased 42 per cent. to GBP69.4 billion (including GBP12.3
billion relating to Rensburg Sheppards as at 31 December 2009). The Investec
Group has a strong liquidity position and has approximately GBP9 billion of
cash and near cash available to support its activities. The total and tier 1
capital adequacy ratios are expected to be 15.5 per cent. and 11.0 per cent.,
respectively, for Investec as at 31 March 2010.
9. Information on Rensburg Sheppards
Rensburg Sheppards is a public limited company registered in England and
Wales. Rensburg Sheppards Shares are listed on the Official List of the London
Stock Exchange. It has a long history of providing investment management
services from its origins dating back to the mid nineteenth century. In its
current form Rensburg Sheppards came about through the reverse merger of
Investec`s Carr Sheppards Crosthwaite Limited business with the then Rensburg
plc. The merger transformed Rensburg Sheppards into a leading investment
management firm in the UK.
Rensburg Sheppards provides high quality professional advice and services to
its clients. It has a broad geographic spread with eleven regional offices
throughout the UK and approximately 600 employees. The group had funds under
management of GBP12.3 billion at 31 December 2009 and comprises Rensburg
Sheppards Investment Management and Rensburg Fund Management.
Rensburg Sheppards Investment Management provides investment management
services for private clients, charities, pension schemes and trusts. It also
provides independent financial planning advice for private clients and
businesses. Rensburg Sheppards Investment Management had GBP11.0 billion funds
under management as at 31 December 2009 of which GBP8.1 billion related to
discretionary mandates and GBP2.9 billion related to non-discretionary
mandates.
Rensburg Fund Management is the group`s fund management division. It manages a
range of unit trusts and provides specialist fund management services for
segregated portfolios. It had GBP1.3 billion in funds under management as at
31 December 2009.
For the year ended 31 March 2009, Rensburg Sheppards reported net revenue of
GBP110.3 million (GBP51.6 million for the six months ended 30 September 2009),
profit before tax of GBP30.5 million (GBP12.5 million for the six months ended
30 September 2009) and earnings per share of 49.0 pence (20.4 pence for the
six months ended 30 September 2009). Net assets as at 31 March 2009 were
GBP197.7 million (GBP200 million as at 30 September 2009).
10. Management, employees and locations
Investec`s current plans for Rensburg Sheppards do not involve any material
change in its executive management team, operating structure or commercial
offering. There is limited overlap between Investec and Rensburg Sheppards`
operations ensuring continuity for clients and employees. Investec does not
intend to change Rensburg Sheppards` places of business. Following the
completion of the Offer, the existing employment rights, including pension
rights, of the management and employees of Rensburg Sheppards will be fully
safeguarded.
11. Rensburg Sheppards Share Scheme
At the same time as, or as soon as practicable following, publication of the
Scheme Document, Rensburg Sheppards will write to participants in the Rensburg
Sheppards Share Scheme to inform them of the effect of the Offer on their
rights under the Rensburg Sheppards Share Scheme and to set out appropriate
proposals.
12. Implementation Agreement
Rensburg Sheppards and Investec have entered into the Implementation
Agreement, which contains certain obligations in relation to the
implementation of the Scheme and the conduct of Rensburg Sheppards` operations
prior to the Effective Date or termination of such agreement. In particular,
the Implementation Agreement contains the following principal provisions:
Conduct of business between the date of announcement and the Effective Date
and Dividends
Pursuant to the Implementation Agreement Rensburg Sheppards has undertaken
(without prejudice to Rule 21.1 of the City Code) that until the earlier of
(i) the Effective Date and (ii) termination of the Implementation Agreement in
accordance with its terms, it shall not, and it shall procure that no member
of the Rensburg Sheppards Group shall (without the prior written consent of
the Investec):
- carry on business other than in the ordinary course (including
anything deemed by the Panel to be in the ordinary course) and consistent
with past practice; or
- take any action which would be reasonably likely to delay or
prejudice, or increase the cost of, the Offer including but not limited
to (i) the allotment, issue or proposal relating to an allotment or issue
of any share capital or any securities convertible into share capital, or
rights or options to subscribe for or acquire any share capital (of
itself or Rensburg Sheppards); or (ii) issue or grant of any options or
awards under any employee share plans of the Rensburg Sheppards Group or
amend any of its Group`s employee share plans; or
- declare, make or propose any dividend or other distribution.
Termination provisions
The Implementation Agreement may, subject to compliance with the City Code and
the requirements of the Panel, terminate in certain circumstances, including:
(a) if a Condition becomes incapable of satisfaction or is invoked so as
to cause the Offer not to proceed in circumstances where such invocation
is in accordance with the Code;
(b) if Rensburg Sheppards Shareholders do not vote to approve the Offer
at the Court Meeting or the General Meeting Resolution are not approved
at the General Meeting;
(c) if the Court Order is not granted or (save as the parties may agreed
in writing) the Effective Date has not occurred on or before 30 September
2010;
(d) by notice in writing from Investec to Rensburg Sheppards if the
Independent Directors have withdrawn or adversely modified or qualified
their recommendation to Rensburg Sheppards Shareholders to vote in favour
of the Scheme and the General Meeting Resolution and either (i) the Panel
consents to Investec withdrawing its offer (while structured as a Scheme)
or (ii) a Third Party Transaction becomes or is declared wholly
unconditional or is completed; or
(e) if Investec elects to implement the Offer by way of a Takeover
Offer, and if the Takeover Offer once announced under Rule 2.5 of the
Code lapses in accordance with its terms or is withdrawn.
Further information regarding the Implementation Agreement will be set out in
the Scheme Document.
13. Structure of the Scheme
It is intended that the acquisition of the Rensburg Sheppards Shares will be
effected by way of a Court sanctioned scheme of arrangement under Part 26 of
the Companies Act. The Scheme is an arrangement between Rensburg Sheppards and
the Rensburg Sheppards Shareholders and is subject to the approval of the
Court.
The purpose of the Scheme is to provide for Investec to become the holder of
the entire issued and to be issued ordinary share capital of Rensburg
Sheppards not already directly or indirectly owned by it. This is to be
achieved by the cancellation of the Scheme Shares held by Rensburg Sheppards
Shareholders and the application of the reserve arising from such cancellation
in paying up in full such number of new Rensburg Sheppards shares, which is
equal to the number of Scheme Shares cancelled, and issuing the same to
Investec. Investec will then issue new Investec Shares to Rensburg Sheppards
Shareholders on the register of members at the Scheme Record Time on the basis
set out above.
To become effective, the Scheme requires, amongst other things, the approval
by a majority in number of Scheme Shareholders representing at least 75 per
cent. in value of the Scheme Shares held by such Scheme Shareholders voting,
either in person or by proxy, at the Court Meeting, together with the sanction
of the Court and the passing by the Scheme Shareholders of a special
resolution necessary to implement the Scheme at the General Meeting. In
addition, both the Scheme and the Capital Reduction must be approved by the
Court.
The Scheme is also subject to certain conditions and certain further terms
referred to in Appendix I of this announcement and to be set out in the Scheme
Document.
Once the necessary approvals from Rensburg Sheppards Shareholders have been
obtained and the other Conditions have been satisfied or (where applicable)
waived, the Scheme will become effective upon the confirmation of the Capital
Reduction by the Court and delivery of the Reduction Court Order to the
Registrar of Companies. Subject to receipt of the requisite regulatory
approvals, the Scheme is expected to become effective by the end of June 2010.
Upon the Scheme becoming effective, it will be binding on all Scheme
Shareholders, irrespective of whether or not they attended or voted at the
Court Meeting or the General Meeting.
Rensburg Sheppards Shares will be acquired pursuant to the Scheme fully paid
and free from all licences, charges, equities, encumbrances, rights of pre-
emption and any other interests of any nature whatsoever and together with all
rights attaching thereto, including voting rights and the rights to receive
and retain in full all dividends and other distributions declared, made or
paid on or after the date of their issue.
Investec reserves the right to elect to implement the acquisition of the
Rensburg Sheppards Shares not already owned by it by way of a Takeover Offer
as an alternative to the Scheme. Any such Takeover Offer will be subject to an
acceptance condition of Investec having acquired (whether pursuant to the
Offer or otherwise) such percentage (being more than fifty per cent.) of the
Rensburg Sheppards Shares, as Investec may decide, having consulted with
Rensburg Sheppards and the Panel and will otherwise be implemented on the same
terms (subject to appropriate amendments), so far as applicable, as those
which would apply to the Scheme and in compliance with applicable laws and
regulations.
Further details of the Scheme, including an indicative timetable for its
implementation, together with how Scheme Shareholders may participate in the
Court Meeting and General Meeting, will be contained in the Scheme Document.
14. Disclosure of interests in Rensburg Sheppards Shares
Investec is interested in 20,657,000 Rensburg Sheppards Shares. This figure
includes the current holdings of Investec and its subsidiaries.
Save as mentioned above, neither Investec, nor, so far as Investec is aware,
the directors of Investec nor any party acting in concert with Investec, has
an interest in or right to subscribe for relevant securities of Rensburg
Sheppards or has any short position in relation to the relevant securities of
Rensburg Sheppards (whether conditional or absolute and whether in the money
or otherwise), including any short position under a derivative, any agreement
to sell or any delivery obligation or right to require another person to
purchase or take delivery of any relevant securities of Rensburg Sheppards.
Neither Investec, nor, so far as Investec is aware, any persons acting in
concert with Investec has borrowed or lent any relevant securities (save for
any borrowed shares which have either been on-lent or sold).
Neither Investec nor, so far as Investec is aware, any persons acting in
concert with Investec has any arrangement in relation to Rensburg Sheppards
Shares, or any securities convertible or exchangeable into Rensburg Sheppards
Shares or options (including traded options) in respect of, or derivatives
referenced to, Rensburg Sheppards Shares. For these purposes, "arrangement"
includes an indemnity or option arrangement, any agreement or understanding,
formal or informal, of whatever nature, relating to relevant securities which
is, or may be, an inducement to deal or refrain from dealing in such
securities.
15. Overseas Shareholders
The availability of the Offer to persons not resident in the United Kingdom
may be prohibited or affected by the laws of the relevant jurisdictions. Such
persons should inform themselves about, and observe, any applicable
requirements. Further details in relation to overseas shareholders will be
contained in the Scheme Document.
