| Tue 20 Jan 2004, 14:24 | | MUTUAL & FEDERAL INSURANCE COMPANY LIMITED - FIRM |
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MUTUAL & FEDERAL INSURANCE COMPANY LIMITED - FIRM INTENTION BY OLD MUTUAL (SOUTH
AFRICA) LIMITED ("OMSA") TO MAKE AN
OFFER TO ACQUIRE THE ENTIRE ISSUED
SHARE CAPITAL OF MUTUAL & FEDERAL
AND CAUTIONARY ANNOUNCEMENT
MUTUAL & FEDERAL INSURANCE COMPANY LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1970/006619/06)
JSE Share Code: MAF
NSX Share Code: MTF
ISIN: ZAE 000010823
("Mutual & Federal")
FIRM INTENTION BY OLD MUTUAL (SOUTH AFRICA) LIMITED ("OMSA") TO MAKE AN OFFER TO
ACQUIRE THE ENTIRE ISSUED SHARE CAPITAL OF MUTUAL & FEDERAL AND CAUTIONARY
ANNOUNCEMENT
1. INTRODUCTION
The board of directors of Mutual & Federal ("the board") wishes to announce
that OMSA, a wholly-owned subsidiary of Old Mutual plc ("OMplc"), has
advised that it intends to acquire all of the Mutual & Federal shares, not
already owned by OMSA and its subsidiaries for the benefit of the
shareholders of OMSA and its subsidiaries ("the offer shares"), by means of
a scheme of arrangement in accordance with section 311 of the Companies Act
("the Act") ("the scheme"). OMplc and its subsidiaries currently own 50.5%
of the issued share capital of Mutual & Federal.
RSA Overseas Holdings (Luxembourg) (No1) s.a.r.l. ("RSA"), which owns 37.1%
of the issued share capital of Mutual & Federal, has irrevocably undertaken
in terms of an agreement concluded with OMSA, to vote in favour of the
scheme in respect of all of the Mutual & Federal shares that it owns.
2. SCHEME CONSIDERATION
The offer is a cash consideration of R17.50 per offer share; provided that
should Mutual & Federal declare a final dividend in respect of the 2003
financial year, and should the record date for such dividend be before the
scheme record date, the scheme consideration shall be reduced by such
dividend.
To the extent that the consideration exceeds R15.25 per offer share (less
any final dividend per offer share declared in respect of the 2003
financial year where the record date is on or before the scheme record
date), RSA has agreed to waive such excess amount in respect of the offer
shares it owns.
Nedbank Corporate has confirmed to the SRP that OMSA has sufficient
resources available to meet its commitments in respect of the scheme
consideration.
3. CONDITIONS PRECEDENT
The offer is subject to, inter alia, the fulfilment of the following
conditions precedent:
- approval of the detailed terms of the scheme by the board;
- sanction of the scheme by the High Court of South Africa and the
approval of the requisite majority of holders of the offer shares;
and
- the approval, to the extent necessary, of the JSE, the SRP, the
Financial Services Board and the South African Reserve Bank.
4. FOLLOW-ON OFFER
Should the scheme not be proposed or be unsuccessful, OMSA will make a
follow-on offer to acquire the offer shares. The cash consideration per
offer share in the follow-on offer will be the same as the scheme
consideration per offer share described in 2 above. The follow-on offer
will not be conditional on any level of acceptances, nor be subject to any
condition other than the necessary regulatory approvals.
RSA has irrevocably undertaken, in respect of all of the offer shares that
it owns, to accept the follow-on offer, should it be made, and to waive the
excess on the basis set out in 2 above.
5. FOREIGN EXCHANGE AGREEMENT
OMplc and RSA have entered into an agreement whereby RSA will pay to a
bank, nominated by OMplc and acting as principal, a rand amount equal to
the full consideration RSA receives under the scheme (or follow-on offer
should it be made), together with any final dividend that RSA may receive
from Mutual & Federal in respect of the 2003 financial year, (collectively
amounting to R1 387 million). Such bank will in turn pay to RSA GBP100
million.
In terms of the same agreement, OMplc will pay to the said bank in UK
pounds, such consideration as may be agreed between OMplc and the said
bank, and will receive R1 387 million.
6. INDEPENDENT FAIR AND REASONABLE OPINION
The board has appointed an independent sub-committee to consider the offer
and make recommendations to the board. The sub-committee will appoint an
independent third party to furnish an opinion in relation to the terms and
conditions of the scheme, and the follow-on offer if required.
7. CAUTIONARY ANNOUNCEMENT
Mutual & Federal shareholders are advised to exercise caution when dealing
in their Mutual & Federal shares until a further announcement regarding the
transaction is made.
Johannesburg
20 January 2004
INVESTMENT BANK, TRANSACTION ADVISOR AND JOINT SPONSOR TO MUTUAL & FEDERAL:
Nedbank Corporate
Joint sponsor to Mutual & Federal:
Merrill Lynch
Date: 20/01/2004 01:55:05 PM Produced by the JSE SENS Department
