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Mutual & Federal - Proposed acquisition of the entire issued share capital of
CGIC
Credit Guarantee Insurance Corporation of Mutual & Federal Insurance Co Limited
Africa Limited
(Incorporated in the Republic of South (Incorporated in the Republic of
Africa) South Africa)
(Registration number 1956/000368/06) (Registration number 1970/006619/06)
("CGIC") ("Mutual & Federal")
(Not listed) JSE Share Code: MAF
NSX Share Code: MTF
ISIN: ZAE000010823
JOINT ANNOUNCEMENT IN RESPECT OF A MANDATORY OFFER FOR THE ENTIRE ISSUED SHARE
CAPITAL OF CGIC BY MUTUAL & FEDERAL
1. Introduction
CGIC shareholders are advised that Mutual & Federal, which currently owns 35.07%
of the issued share capital of CGIC, has made an offer ("the offer") for those
CGIC shares it does not own ("the offer shares"). The terms and conditions of
the offer are set out below.
2. Terms of the offer
Assuming 100% acceptance in respect of the offer shares, the offer consideration
payable in cash by Mutual & Federal will be R198 486 400.00, equating to R112.00
per CGIC share ("the offer price").
If more than 90% of CGIC shareholders holding offer shares accept the offer,
Mutual & Federal intends invoking S440K of the Companies Act to compulsorily
acquire the remaining offer shares. The offer is not, however, conditional upon
such acceptance, or any other, being achieved.
3. Rationale for the offer
On 16 April 2003 Mutual and Federal acquired from Fedsure General Insurance
Limited its 6.23% shareholding in CGIC for cash at the offer price. This
increased the aggregate shareholding of Mutual and Federal in CGIC to greater
than 35%. Accordingly, Mutual and Federal is obliged to extend an offer to all
other shareholders in CGIC in accordance with The Securities Regulation Code on
Takeovers and Mergers and Rules of the Securities Regulation Panel ("the SRP
Code").
4. Conditions precedent
The making of the offer is subject to the fulfilment, to the extent necessary,
of the following conditions:
* the approval of the Exchange Control Department of the South African Reserve
Bank;
* the approval of the Competition Commission; and
* the approval of the Financial Services Board (Registrar of Short Term
Insurance).
Nedbank Corporate has confirmed to the Securities Regulation Panel ("SRP") that
Mutual & Federal has the necessary cash resources to implement the offer.
5. Salient dates of the offer
The offer will open at 09h00 on the date of posting of the documentation
referred to in paragraph 7 below. The offer will remain open for a period of at
least three weeks from the posting of such documentation and for at least two
weeks after the last of the conditions precedent are met, whichever date occurs
later. Shareholders will be informed in the press as these events occur.
The dates and time are subject to amendment. Any change will be published in the
press.
6. Opinions and recommendations
The CGIC Board is obliged, under the SRP Code, to appoint independent advisors
who will provide them with advice regarding the terms of the offer. This opinion
and the opinion of the Board will be contained in the offer circular referred to
below.
7. Offer documentation to CGIC shareholders
Subject to the approval of the JSE Securities Exchange, South Africa and the
SRP, documentation will be sent to CGIC shareholders containing details of the
offer. This is expected to occur within one month of the date of this
announcement.
Johannesburg
24 April 2003
Investment Bank to the transaction and joint sponsor to Mutual & Federal
Nedbank Corporate
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