| Wed 15 Dec 2010, 11:24 | | RMH - RMB Holdings Limited - Terms announcement |
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RMH
RMH
RMH - RMB Holdings Limited - Terms announcement
RMB Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1987/005115/06)
Share code: RMH ISIN: ZAE000024501
("RMBH")
Terms announcement relating to the:
- restructuring of RMBH;
- placement of shares with Royal Bafokeng;
- acquisition of a further 45% interest in OUTsurance from FirstRand; and
- withdrawal of cautionary announcement.
1. Introduction
RMBH shareholders are referred to the initial cautionary announcement released
on SENS on 31 March 2010 and in the press on 1 April 2010, and subsequent
updates wherein shareholders were advised of the potential restructuring of
RMBH`s banking and insurance interests.
On 3 December 2010 RMBH`s 30% held associate, FirstRand Limited ("FirstRand"),
completed a series of transactions (collectively referred to herein as the
"FirstRand Unbundling Transaction" (see FirstRand`s website,
www.firstrand.co.za for further details) in terms of which:
- FirstRand`s wholly-owned subsidiary, Momentum Group Limited ("Momentum"),
merged with Metropolitan Holdings Limited ("Metropolitan") to form South
Africa`s third largest assurer, MMI Holdings Limited ("MMI Holdings"), the
shares of which are listed on the JSE Limited (the "JSE"); and
- FirstRand unbundled its entire interest in MMI Holdings to its ordinary
shareholders.
Following the implementation of the FirstRand Unbundling Transaction, RMBH
holds an 18% direct interest in MMI Holdings. As a result, RMBH`s portfolio of
strategic investments in South African financial services groups comprises:
- MMI Holdings (18%), Discovery Holdings Limited ("Discovery") (25%),
FirstRand STI Holdings Limited ("OUTsurance") (45%) and RMB-SI Holdings
Limited ("RMB-SI") (76%) (collectively "RMBH Insurance Interests"); and
- FirstRand (30%), owner of, inter alia, First National Bank, Rand Merchant
Bank, WesBank and 45% of OUTsurance.
For further details of the underlying RMBH Insurance Interests, shareholders
are referred to the circular to be posted to shareholders on or about 26
January 2011.
2. Overview of the RMBH Restructuring
Shareholders are advised that pursuant to the FirstRand Unbundling
Transaction, the directors of RMBH have resolved to embark on the following
restructuring:
- the issue of shares for cash to Royal Bafokeng Holdings (Proprietary)
Limited ("Royal Bafokeng") (the "Royal Bafokeng Placement");
- the acquisition by RMBH of additional FirstRand ordinary shares from
Financial Securities Limited ("FSL"), a wholly-owned subsidiary of Remgro
Limited, in exchange for the issue of new RMBH ordinary shares, thereby
increasing RMBH`s holding in FirstRand to c.33.9% (the "FirstRand
Acquisition");
- the separation of RMBH`s insurance and banking interests, through the
transfer of the RMBH Insurance Interests to a newly incorporated wholly-owned
subsidiary of RMBH, Main Street 796 Limited, which will be renamed Rand
Merchant Insurance Holdings Limited ("RMI Holdings") (the "RMBH Insurance
Interests Acquisition");
- the unbundling of RMBH`s shares in RMI Holdings to RMBH`s ordinary
shareholders and the separate listing of RMI Holdings on the JSE as an
insurance-focused investment entity (the "RMI Unbundling"); and
- the subsequent acquisition by RMI Holdings of additional MMI Holdings
ordinary shares from FSL, in exchange for the issue to FSL of new RMI Holdings
ordinary shares, in order to restore RMI Holdings` effective interest in MMI
Holdings to a level similar to that which RMBH held in Momentum prior to the
FirstRand Unbundling Transaction and to avoid any potential structural value
traps (the "FSL MMI Holdings Acquisition").
In addition, shareholders are advised that FirstRand and RMBH have reached
agreement relating to the acquisition by RMI Holdings of FirstRand`s 45%
interest in OUTsurance (the "OUTsurance Acquisition").
The Royal Bafokeng Placement, the FirstRand Acquisition, the RMBH Insurance
Interests Acquisition, the RMI Unbundling, the FSL MMI Acquisition and the
OUTsurance Acquisition (collectively the "RMBH Restructuring") are each
subject to certain conditions, which are detailed in paragraph 8 below.
The purpose of this announcement is to provide RMBH shareholders with the
salient terms and conditions of the RMBH Restructuring.
3. Rationale for the RMBH Restructuring
3.1 Rationale for the Royal Bafokeng Placement
RMBH believes that the proposed restructuring provides an opportune time to
raise capital and introduce Royal Bafokeng into a strategic relationship with
both RMI Holdings and RMBH.
The Royal Bafokeng Placement represents an important first step for Royal
Bafokeng in achieving its stated objective of building a significant interest
in and alliance with a pre-eminent South African financial services grouping.
Furthermore, Royal Bafokeng is a reputable BEE entity that will enhance the
BEE credentials of the underlying RMBH and RMI Holdings investment entities.
3.2 Rationale for the FirstRand Acquisition
The FirstRand Acquisition will allow RMBH to bolster its strategic interest in
a premier Southern African banking group, FirstRand, to 33.9%.
3.3 Rationale for the RMBH Insurance Interests Acquisition and the RMI
Unbundling
Pursuant to the FirstRand Unbundling Transaction, RMBH is proposing a
restructuring and re-alignment of its investment portfolio to enhance
shareholder value through the creation of separate focused insurance and
banking entities.
The two separately listed entry points will provide investors with greater
flexibility in terms of their investment choices:
- RMBH investors will have access to a strategic investment in a premier
Southern African banking group, owning pre-eminent banking brands that control
significant elements of the profit pools of their segments; while
- Investors in RMI Holdings will have access to a strategic portfolio of
insurance investments with significant shares in the profits of various
segments of the insurance market. All the companies which will form part of
the RMI Holdings portfolio are quality investments that excel in their own
segments of the insurance market.
3.4 Rationale for the FSL MMI Acquisition
Following the implementation of the FirstRand Unbundling Transaction, RMI
Holdings will own an approximate 18% interest in MMI Holdings. In order to
prevent potential structural value traps, RMI Holdings intends to increase
this stake to more than 25% over time.
To this end, RMI Holdings will conclude the FSL MMI Acquisition, which will
increase its interest in MMI Holdings to just below 25%.
When appropriate, RMI Holdings will seek to acquire additional shares in MMI
Holdings to increase its stake in MMI Holdings to between 25% and 35%.
3.5 Rationale for the OUTsurance Acquisition
Pursuant to the RMBH Insurance Interests Acquisition, RMI Holdings will hold
the 45% stake in OUTsurance, previously held by RMBH. Agreement was reached on
the OUTsurance acquisition given that FirstRand`s 45% interest in OUTsurance
is regarded by FirstRand as a non-strategic investment in that OUTsurance does
not sell insurance directly into FirstRand`s banking customer base and RMBH
holds pre-emptive rights over FirstRand`s interest in OUTsurance.
Following the OUTsurance Acquisition, RMI Holdings will own a 90% interest in
OUTsurance.
The OUTsurance Acquisition will:
- Enable RMI Holdings to gain control of OUTsurance`s cash flows;
- Allow RMI Holdings` shareholders greater access to an investment in a direct
short-term insurer which has a strong management team, good growth prospects
and good dividend flow; and
- Further enhance, with a broad market segment spread, the attractiveness of
the suite of pre-eminent insurance brands owned by RMI Holdings
4. Details of the RMBH Restructuring
4.1 The Royal Bafokeng Placement
RMBH will issue 72 463 768 RMBH ordinary shares ("Royal Bafokeng Subscription
Shares") to Royal Bafokeng at an aggregate issue price of R2.5 billion,
escalating by 6% nacm from 1 January 2011 to the subscription date (projected
to be 9 February 2011) less any dividend paid on RMBH ordinary shares during
this period ("Royal Bafokeng Subscription Amount").
The Royal Bafokeng Subscription Shares will be issued at a discount of
approximately 4.6% to the 30-day volume weighted average price ("VWAP") of
RMBH on the trading day prior to this announcement.
RMBH will utilise the proceeds from the Royal Bafokeng Placement to subscribe
for further ordinary shares in RMI Holdings simultaneously with the transfer
of the RMBH Insurance Interests ("RMBH RMI Subscription").
4.2 The FirstRand Acquisition
The FirstRand Acquisition will result in RMBH holding an effective 33.9%
interest in FirstRand. It is intended that the FirstRand Acquisition will take
place in two stages:
- Prior to the RMI Unbundling, RMBH will purchase from FSL that number of
ordinary shares in FirstRand which, after the issue of new fully paid ordinary
shares in RMBH (the "First Consideration Shares") to FSL and the
implementation of the FSL MMI Acquisition will result in FSL holding 34.9% of
the ordinary shares in RMI Holdings (the "First FirstRand Acquisition").
- Post the RMI Unbundling, RMBH will purchase from FSL that number of further
ordinary shares in FirstRand (the "Second Sale Shares") which, after the
implementation of such acquisition and the First FirstRand Acquisition will
result in RMBH holding 33.9% of the ordinary shares in FirstRand or such
lesser percentage which will ensure that FSL will hold no more than 34.9% of
the ordinary shares in RMBH (the "Second FirstRand Acquisition"). In
consideration for the Second Sale Shares, RMBH shall issue to FSL new fully
paid ordinary shares in RMBH (the "Second Consideration Shares").
The First Consideration Shares and Second Consideration Shares will be
determined in accordance with a formula based on net asset values ("NAV") of
RMBH, utilising 15-day VWAPs for the listed underlying assets of RMBH, and the
15-day VWAP of FirstRand, as at the date on which the last of the suspensive
conditions to the First FirstRand Acquisition are fulfilled (the "Pricing
Date").
4.3 RMBH Insurance Interests Acquisition
Prior to the RMI Unbundling, RMBH will:
- transfer the RMBH Insurance Interests and the preference shares it holds in
OUTsurance, New Seasons Financial Services (Proprietary) Limited and FirstRand
Bank Limited to RMI Holdings in consideration for which RMI Holdings will
issue new RMI Holdings ordinary shares to RMBH; and
- subscribe for new RMI ordinary shares at an aggregate issue price equal to
the Royal Bafokeng Subscription Amount.
4.4 RMI Unbundling
The issued ordinary share capital structure of RMI Holdings, other than the
par value per share, will, following the implementation of the Royal Bafokeng
Placement, the First FirstRand Acquisition, the RMBH Insurance Interests
Acquisition and the RMBH RMI Subscription, mirror that of RMBH. RMBH
shareholders will therefore receive 1 RMI Holdings ordinary share for every
RMBH ordinary share held on the record date for the RMI Unbundling.
Following the RMI Unbundling, RMI Holdings will be separately listed on the
JSE as an insurance-focused investment entity.
4.5 The FSL MMI Acquisition
As a consequence of the FirstRand Unbundling Transaction, MMI Holdings will be
a leading insurance-focused financial services group conducting business in
South Africa and elsewhere in Africa. The business of MMI Holdings will
consist of life insurance, healthcare administration, asset management, short-
term insurance and employee benefits.
In terms of the FSL MMI Acquisition, RMI Holdings will acquire 105 608 098 MMI
Holdings ordinary shares from FSL in consideration for which RMI Holdings will
allot and issue to FSL that number of RMI Holdings ordinary shares which will
be determined in accordance with a formula based on the NAV of RMI Holdings,
utilising 15-day VWAPs for the listed underlying assets of RMI Holdings, and
the 15-day VWAP of MMI Holdings, as at the Pricing Date.
4.6 The OUTsurance Acquisition
Following the RMI Unbundling, RMI Holdings will acquire:
- FirstRand`s 45% interest in OUTsurance for a cash consideration of R3.75
billion (the "OUTsurance Acquisition Consideration"); and
- FirstRand`s preference shareholding in OUTsurance for cash at its carrying
value as at the date of the OUTsurance Acquisition. As at 14 December 2010 the
carrying value of this preference shareholding was R401 million.
The OUTsurance Acquisition Consideration is determined on the assumption that
no dividend, distribution or similar payment is declared or made by OUTsurance
to OUTsurance`s shareholders between the date of this announcement and the
date on which the OUTsurance Acquisition becomes effective.
It is envisaged that RMI Holdings will fund the OUTsurance Acquisition through
a combination of the capital raised through the Royal Bafokeng Placement and
subsequent RMBH RMI Subscription, and the raising of debt.
The effective date of the OUTsurance Acquisition is expected to be on or about
31 March 2011 and will result in RMI Holdings holding an effective 90%
interest in OUTsurance and OUTsurance will, accordingly, become a subsidiary
of RMI Holdings.
Upon completion of the OUTsurance Acquisition it is the intention of RMI
Holdings to invite OUTsurance`s executive team to co-invest alongside RMI
Holdings in OUTsurance. The funding of such management co-investment is
expected to amount to approximately R500 million and will be facilitated by
RMI Holdings.
5. Resultant Group Structure
5.1 RMBH structure
It is anticipated that, following implementation of the RMBH Restructuring,
the structure of RMBH will be as depicted in the diagram below:
SEE PRESS FOR DIAGRAM
5.2 RMI Holdings` structure
It is anticipated that, following implementation of the RMBH Restructuring,
the structure of the newly listed entity, RMI Holdings, will be as depicted in
the diagram below:
SEE PRESS FOR DIAGRAM
6. Related party transaction
FSL currently holds 25% of RMBH`s ordinary issued share capital and as a
material shareholder of RMBH, it is classified as a related party to RMBH in
terms of the Listings Requirements of the JSE (the "JSE Listings
Requirements"). As a result, the FirstRand Acquisition and the FSL MMI
Acquisition are considered related party transactions. Accordingly:
- while FSL will be taken into account in determining the quorum at the
general meeting of RMBH shareholders, its votes will not be taken into account
in determining the results of the voting at such general meeting in relation
to the resolutions required to authorise, approve and implement the FirstRand
Acquisition and the FSL MMI Acquisition; and
- in accordance with the relevant provisions of the JSE Listings Requirements,
KPMG Service (Proprietary) Limited ("KPMG") has been appointed as the
independent expert to advise the RMBH board on whether the terms and
conditions of the FirstRand Acquisition and the FSL MMI Acquisition are fair
to RMBH shareholders. KPMG`s report will be included in the circular to be
posted to RMBH shareholders.
7. Pro forma financial effects of the RMBH Restructuring
7.1 Pro forma financial effects of the RMBH Transaction
The unaudited pro forma financial effects of RMBH have been prepared to show
the impact of the Royal Bafokeng Placement, the FirstRand Acquisition, the
RMBH Insurance Interests Acquisition, the RMBH RMI Subscription, the RMI
Unbundling and the OUTsurance Acquisition (collectively "the RMBH
Transaction").
The unaudited pro forma financial effects are presented for illustrative
purposes only and, because of their nature, may not fairly reflect RMBH`s
results or financial position, after the RMBH Transaction and going forward.
The unaudited pro forma financial effects have been prepared using accounting
policies that are consistent with International Financial Reporting Standards
("IFRS") and with the basis on which the historical financial information has
been prepared in terms of the accounting policies adopted by RMBH.
The directors of RMBH are responsible for the compilation, contents and
preparation of the unaudited pro forma financial effects and for the financial
information from which it has been prepared. Their responsibility includes
determining that:
- the unaudited pro forma financial information has been properly compiled on
the basis stated;
- the basis is consistent with the accounting policies of the RMBH; and
- that the pro forma adjustments are appropriate for the purposes of the
unaudited pro forma financial information disclosed in terms of the JSE
Listings Requirements.
Before(2) After After RMI After
FirstRand Unbundling(4) Second
Unbundling FirstRand
Transaction(3) Acquisition(5)
A B C D
Earnings per
share (cents) 300.8 297.5 779.8 755.2
Headline earnings
per share (cents) 299.8 293.4 199.0 199.0
Net asset value
per share
NAV (cents) 1 904.0 1 929.8 1 374.9 1 419.0
Net tangible
asset value per
share (NTAV)
(cents) 1 900.2 1 926.0 1 374.9 1 419.0
Weighted average
number of shares
(`000) 1 199 086 1 200 219 1 349 760 1 409 344
Shares in issue,
adjusted for treasury
shares (`000) 1 199 970 1 201 684 1 350 333 1 409 917
After Percentage
OUTsurance change
Acquisition(6)
E C/B D/C E/D E/B
Earnings per share (cents) 824.2 162.1 (3.2) 9.1 177.0
Headline earnings
per share (cents) 196.9 (32.2) - (1.1) (32.9)
Net asset value per share
NAV (cents) 1 490.6 (28.8) 3.2 5.0 (22.8)
Net tangible asset value
per share (NTAV) (cents) 1 490.6 (28.6) 3.2 5.0 (22.6)
Weighted average number
of shares (`000) 1 409 344
Shares in issue, adjusted
for treasury shares (`000) 1 409 917
Notes:
1. The unaudited pro forma financial effects are prepared on the assumption
that the RMBH Transaction was effective 1 July 2009 for purposes of the
effects on earnings and 30 June 2010 for purposes of effects on NAV.
2. Based on the published audited annual financial results of RMBH, for the
year ended 30 June 2010.
3. Represents the unaudited pro forma financial position of RMBH, after the
FirstRand Unbundling Transaction, which includes the impact of the merger of
Metropolitan and Momentum and the unbundling by FirstRand of MMI Holdings
shares to FirstRand shareholders. This represents the adjusted before position
of RMBH against which the unaudited pro forma financial effects of the RMBH
Transaction is illustrated.
4. Represents the unaudited pro forma financial information, after the RMI
Holdings Unbundling, which includes the following:
i. The Royal Bafokeng Placement, for net proceeds of R2.5 billion. The Royal
Bafokeng Placement will comprise the issue of 72.5 million ordinary shares to
Royal Bafokeng at a price of R34.72 per share. As the proceeds from the Royal
Bafokeng Placement will be transferred to RMI Holdings in terms of the RMBH
RMI Subscription, no earnings from the proceeds of the issue are assumed.
ii. The acquisition of an additional 138 million FirstRand ordinary shares
from FSL at an assumed price of R18.60 through the issue of RMBH shares at an
assumed price of R37.33, in terms of the First FirstRand Acquisition.
iii. The deconsolidation and the transfer of the RMBH Insurance Interests and
other assets, including OUTsurance preference shares of R271 million,
FirstRand Bank Limited preference shares of R100 million, cash of R2,633
million relating primarily to the Royal Bafokeng Placement and other insurance-
related assets of R16 million (collectively "Other Balance Sheet Items") to
RMI Holdings.
iv. The recognition of a non-recurring profit of R7,813 million on the
distribution at fair value of RMI Holdings ordinary shares as a dividend in
specie to RMBH shareholders; and
v. Estimated transaction costs associated with the RMBH Transaction of R12.5
million, assuming an allocation to RMBH of 50% of total transaction costs of
R25 million, which are once-off in nature.
5. Represents the unaudited pro forma financial effects on RMBH of the
acquisition of an additional 78 million FirstRand ordinary shares from FSL at
an assumed price of R18.60 through the issue of RMBH shares at an assumed
price of R24.21 (post the RMI Unbundling) as part of the Second FirstRand
Acquisition.
6. Represents the effective unaudited pro forma financial effects on RMBH, as
a result of the financial effects on FirstRand of the sale of its 45% interest
in OUTsurance, as a shareholder of FirstRand.
7.2 Pro forma financial effects of the RMI Holdings Transaction
The unaudited pro forma financial effects of RMI Holdings have been prepared
to show the impact of the RMI Unbundling, the FSL MMI Acquisition and the
OUTsurance Acquisition (collectively the "RMI Holdings Transaction").
The unaudited pro forma financial effects are presented for illustrative
purposes only and, because of their nature, may not fairly reflect the RMI
Holdings results or financial position, after the RMI Holdings Transaction,
and going forward.
The unaudited pro forma financial effects have been prepared using accounting
policies that are consistent with IFRS and with the basis in terms of the
accounting policies adopted by RMI Holdings.
The directors of the RMI Holdings are responsible for the compilation,
contents and presentation of the unaudited pro forma financial effects and for
the financial information from which it has been prepared. Their
responsibility includes determining that:
- the unaudited pro forma financial effects have been properly compiled on the
basis stated;
- the basis is consistent with the accounting policies adopted by RMI
Holdings;
- the pro forma adjustments are appropriate for the purposes of the unaudited
pro forma financial information disclosed in terms of the JSE Listings
Requirements.
Before (2) After RMI After FSL
Unbundling (3) MMI
Acquisition(4)
A B C
Earnings per share (cents) - 77.9 78.3
Diluted earnings per share (cents) - 77.2 77.4
Headline earnings per share (cents) - 76.2 77.3
Diluted headline earnings per
share (cents) - 75.4 76.3
Net asset value per share
(NAV) (cents) - 728.5 780.9
Net tangible asset value per
share (NTAV) (cents) - 725.1 777.8
Weighted average number of
shares (`000) 0* 1 342 013 1 474 584
Shares in issue, adjusted for
treasury shares (`000) 0* 1 342 905 1 475 769
After Percentage
OUTsurance change
Acquisition(5)
D C/B D/C
Earnings per share (cents) 86.9 0.5 11.0
Diluted earnings per share (cents) 86.0 0.3 11.1
Headline earnings per share (cents) 85.9 1.4 11.1
Diluted headline earnings per share (cents) 84.9 1.2 11.3
Net asset value per share (NAV) (cents) 581.5 7.2 (25.5)
Net tangible asset value per share (NTAV) (cents) 578.3 7.3 (25.7)
Weighted average number of shares (`000) 1 474 584
Shares in issue, adjusted for treasury
shares (`000) 1 475 769
* Weighted number and number of shares is 7.
Notes:
1. The unaudited pro forma financial effects are prepared on the assumption
that the RMI Holdings Transaction was effective 1 July 2009 for purposes of
the effects on earnings and 30 June 2010 for purposes of effects on NAV.
2. RMI Holdings is a newly incorporated wholly-owned subsidiary of RMBH formed
for the purposes of the RMI Unbundling.
3. Represents the unaudited pro forma financial effects, after the RMI
Unbundling, which includes the following:
3.1 The equity accounting of the investment in and earnings relating to the
MMI Holdings interest and the Discovery interest;
3.2 The consolidation of the assets, liabilities and earnings relating to the
OUTsurance interest and RMB-SI interest;
3.3 The transfer from RMBH to RMI Holdings of the Other Balance Sheet Items.
No earnings from the cash are assumed as R2.5 billion will be utilised in part
settlement of the consideration on the OUTsurance Acquisition and the balance
will be utilised within the operations of RMI Holdings, the return on which is
not certain at this stage;
3.4 Consolidation entries relating to the accounting treatment for deemed
treasury shares in terms of the existing accounting policies of RMBH and
accounting policies adopted by RMI Holdings; and
3.5 Estimated transaction costs associated with the proposed RMI Holdings
Transaction of R12.5 million, assuming an allocation to RMI Holdings of 50% of
total transaction costs of R25 million, which are once-off in nature.
4. Represents the unaudited pro forma financial effects, after the acquisition
of additional 106 million MMI Holdings shares from FSL at an assumed price of
R16.81 through the issue of RMI Holdings shares at an assumed price of R13.12.
5. Represents the unaudited pro forma financial effects, after the acquisition
of FirstRand`s 45% interest in OUTsurance and an adjustment to reflect the
funding costs attached to preference share funding used to part settle the
consideration on the OUTsurance Acquisition at an assumed rate of 75% of the
prime lending rate.
8. Conditions precedent
The RMBH Restructuring will be subject to the following suspensive conditions
being fulfilled or waived by no later than 17:00 on 31 March 2011 (or such
later date as the parties to this agreement may agree in writing):
8.1 Royal Bafokeng Placement
The Royal Bafokeng Placement is subject to the following conditions:
- Royal Bafokeng having obtained bridge funding sufficient to fund the Royal
Bafokeng Subscription Amount on the subscription date; and
- the JSE having confirmed in writing that it will admit the Royal Bafokeng
Subscription Shares to listing.
8.2 First FirstRand Acquisition
The First FirstRand Acquisition is subject to the fulfilment of the following
conditions:
- the Royal Bafokeng Placement having been implemented;
- RMBH having obtained the approval, by ordinary resolution, of its
shareholders for the RMI Unbundling;
- RMBH having obtained the approval, by ordinary resolution, of its
shareholders, for the placing of sufficient authorised but unissued ordinary
shares in RMBH under the control of its directors in order to give effect to
the First FirstRand Acquisition and the Second FirstRand Acquisition, pursuant
to the provisions of section 221 of the Companies Act, 61 of 1973 (the "Act");
- RMBH having obtained the approval, by ordinary resolution, of its
shareholders, excluding FSL, for the First FirstRand Acquisition, Second
FirstRand Acquisition and the FSL MMI Acquisition, in compliance with
paragraphs 10.4(d) and 10.4(e) of the JSE Listings Requirements; and
- RMBH obtaining advice from an independent expert acceptable to the JSE that
the First FirstRand Acquisition, Second FirstRand Acquisition and the FSL MMI
Acquisition are fair insofar as the shareholders of RMBH are concerned, in
compliance with paragraph 10.4(f) of the JSE Listings Requirements.
8.3 RMBH Insurance Interests Acquisition
The RMBH Insurance Interests Acquisition is subject to the following
conditions:
- the implementation of the Royal Bafokeng Placement and First FirstRand
Acquisition.
8.4 RMI Unbundling
The RMI Unbundling is subject to the following conditions:
- the implementation of the Royal Bafokeng Placement, First FirstRand
Acquisition and RMBH Insurance Interests Acquisition;
- the approval of the RMI Unbundling by the requisite majority of RMBH
ordinary shareholders in a general meeting.
8.5 Second FirstRand Acquisition
The Second FirstRand Acquisition is subject to the fulfilment of the following
conditions:
- the implementation of the First FirstRand Acquisition and RMI Unbundling;
and
- RMI Holdings` ordinary shares having been listed on the JSE.
8.6 FSL MMI Acquisition
The FSL MMI Acquisition is subject to the fulfilment of the following
conditions:
- the implementation of the Second FirstRand Acquisition; and
- RMI Holdings having obtained the approval, by ordinary resolution, of its
shareholders, for the placing of sufficient authorised but unissued ordinary
shares in RMI Holdings under the control of its directors, in order to give
effect to the FSL MMI Holdings Acquisition, pursuant to the provisions of
section 221 of the Act.
8.7 OUTsurance Acquisition
The OUTsurance Acquisition is subject to the fulfilment of the following
conditions:
- the unconditional written approval (or if such approval is conditional, the
parties to this agreement having each respectively approved in writing each
such condition and delivered such written approval to the other) for the
acquisition by RMI Holdings of a further 45% of the issued ordinary shares in
OUTsurance, to the extent required, by:
- the competition authorities of South Africa;
- the South African Registrars of Short-Term Insurance and Long-Term
Insurance; and
- the Namibian Registrar of Short-Term Insurance;
- FirstRand obtaining advice from an independent expert acceptable to the JSE
that the OUTsurance Acquisition is fair insofar as the shareholders of
FirstRand are concerned, in compliance with paragraph 10.7(b) of the JSE
Listings Requirements.
9. Directorate
The board of directors of RMI Holdings will initially mirror that of RMBH.
Consideration will in due course be given to restructuring the boards of
directors to reflect the interests of the various stakeholder groups.
10. Salient dates and times
2011
Issue and listing of the new RMBH ordinary shares
issued in terms of the Royal Bafokeng Placement on Monday, 8 February
Subscription date in terms of the Royal Bafokeng
Placement on Tuesday, 9 February
Last day to lodge forms of proxy for the general
meeting by 10:00 on Thursday, 10 February
General meeting of RMBH ordinary shareholders at 10:00
on Friday, 11 February
Results of the general meeting released on SENS on Friday, 11 February
Expected date of fulfilment or waiver (where
applicable) of the conditions precedent to the First
FirstRand Acquisition on Friday, 11 February
Results of the general meeting published in the press on
Monday, 14 February
Publication of the abridged RMI Holdings pre-listing
statement on SENS on Monday, 14 February
Issue and listing of new RMBH ordinary shares in terms
of the First FirstRand Acquisition on Monday, 14 February
Expected date of fulfilment or waiver (where
applicable) of the conditions precedent to the
RMI Unbundling on Tuesday, 15 February
Last day to trade in dematerialised RMBH ordinary
shares on the JSE in order to participate in the
RMI Unbundling on Friday, 25 February
RMBH ordinary shares trade ex the entitlement to the
unbundled shares on Monday, 28 February
Listing of RMI Holdings unbundled shares with effect
from the commencement of business under the JSE
Code RMI, ISIN ZAE000153102 and abbreviated
name RMIH on Monday, 28 February
Commencement of trade in RMI Holdings ordinary shares
on Monday, 28 February
Record date for RMBH ordinary shareholders to
participate in the RMI Unbundling on Friday, 4 March
Expected date of fulfilment or waiver (where
applicable) of the conditions precedent to the
Second FirstRand Acquisition and the FSL MMI
Acquisition on Monday, 7 March
RMI Holdings share certificates posted, by registered
post, to certificated ordinary shareholders
on or about Monday, 7 March
Dematerialised ordinary shareholders have their
accounts at their Central Securities Depository
Participant ("CSDP") or brokers updated with their
unbundled shares on or about Monday, 7 March
Issue and listing of new RMBH shares issued in terms
of the Second FirstRand Acquisition on Tuesday, 8 March
Issue and listing of new RMI Holdings ordinary shares
issued in terms of the FSL MMI Acquisition Tuesday, 8 March
Operative date for the FSL MMI Acquisition on Wednesday, 9 March
Announcement of specified ratio in respect of the
apportionment of the cost/base cost for
taxation/CGT purposes on or about Wednesday, 9 March
Expected date of fulfilment or waiver (where
applicable) of the conditions precedent to the
OUTsurance Acquisition on Friday, 18 March
Operative date for the OUTsurance Acquisition on Thursday, 31 March
The above dates and times are subject to change. Further announcements will be
released on SENS and published in the South African press once all of the
suspensive conditions have been fulfilled, which is expected to be around 31
March 2011.
Share certificates in the name of RMBH ordinary shares may not be
dematerialised or rematerialised between Monday, 28 February 2011 and Friday,
4 March 2011, both days inclusive.
11. General meeting
A general meeting of RMBH shareholders will be held at 10:00 on Friday, 11
February 2011 at the Auditorium, 18th Floor, 1 Merchant Place, Fredman Drive,
Sandton, to consider and, if deemed fit, pass, inter alia, all resolutions
required to authorise the implementation of the RMBH Restructuring.
12. Posting of circular
A circular, including a notice of general meeting, will be posted to RMBH
shareholders holding certificated shares, as well as to those shareholders
holding dematerialised shares, that have elected to receive such documents, on
or about 26 January 2011. RMBH shareholders who hold dematerialised shares and
have not elected to receive such documents must contact their CSDP or broker
in the manner and at times stipulated in the terms of the agreement entered
into between such shareholders and their CSDP or broker should they wish to
receive the relevant documents.
13. Withdrawal of cautionary announcement
RMBH shareholders are advised that, as a result of the publication of this
announcement, the cautionary announcement is now withdrawn and caution is no
longer required to be exercised by shareholders when dealing in their RMBH
shares.
15 December 2010
Merchant bank and transaction sponsor
RAND MERCHANT BANK
A Division of FirstRand Bank Limited
Legal advisors
WEBBER WENTZEL ATTORNEYS
Competition law advisors
WERKSMAN ATTORNEYS
Independent sponsor
PRICEWATERHOUSECOOPERS CORPORATE FINANCE
Independent expert
KPMG SERVICE (PROPRIETARY) LIMITED
Independent reporting accountants and auditors
PWC
Financial advisor to Royal Bafokeng on the Royal Bafokeng Placement
DEUTSCHE BANK
Date: 15/12/2010 11:24:01 Produced by the JSE SENS Department.
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