| Thu 19 Aug 2004, 11:39 | | Further Details In Respect Of The Proposed Introd |
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Standard Bank Group - Further Details In Respect Of The Proposed Introduction Of
Direct Black Share Ownership To Standard Bank Group
Standard Bank Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1969/017128/06)
Share code: SBK Namibian share code: SNB
ISIN: ZAE000038873
(`Standard Bank Group` or `the Company`)
FURTHER DETAILS IN RESPECT OF THE PROPOSED INTRODUCTION OF DIRECT BLACK
SHARE OWNERSHIP TO STANDARD BANK GROUP
1. INTRODUCTION
Standard Bank Group ordinary shareholders are referred to the announcement on 15
July 2004 relating to Standard Bank Group proposing to facilitate the
acquisition of an effective 10% interest in its South African banking operations
by a broad-based grouping of black entities (`the black ownership initiative`).
The black ownership initiative participants comprise the following:
* black strategic partners, being Safika Holdings (Proprietary) Limited and
Shanduka Group (Proprietary) Limited (formerly Millennium Consolidated
Investments (Proprietary) Limited);
* trusts to be formed for the benefit of current, as well as future, black
managers of Standard Bank Group`s subsidiaries (other than Liberty Group
Limited (`Liberty Life`) and its subsidiaries) and non-executive directors
of Standard Bank Group (`the Managers Trusts`); and
* regional business and community groups or a trust to be formed for the
benefit of those groups.
The above black ownership initiative participants are collectively referred to
as `the black partners`.
Standard Bank Group also proposes that every employee of its subsidiaries
worldwide, who is not a beneficiary under the Managers Trusts or is not a
participant in Standard Bank Group`s share incentive scheme, will be awarded 100
Standard Bank Group ordinary shares (`General Staff Scheme`), to be held for his
benefit by the Standard Bank Group General Staff Share Trust (`General Staff
Trust`). To the extent that black employees are beneficiaries under this trust,
this too will form part of the black ownership initiative.
To enable the black ownership initiative to occur:
* Standard Bank Group has established six wholly-owned subsidiaries
(collectively referred to as `the SBG subsidiaries`) whose sole purpose
will be to acquire and own Standard Bank Group ordinary shares;
* Standard Bank Group will subscribe for preference shares with a 20-year
term in the capital of each of the SBG subsidiaries at an aggregate
subscription price of R4.02 billion;
* companies who employ the beneficiaries under the General Staff Scheme will
provide approximately R127 million, in cash, to the General Staff Trust, as
a benefit to the beneficiaries arising from their employment;
* the SBG subsidiaries and the trustees of the General Staff Trust have
together proposed a scheme of arrangement in terms of section 311 of the
Companies Act, 1973 (Act 61 of 1973), as amended (`Companies Act`), between
Standard Bank Group and its ordinary shareholders (`the scheme`) for the
acquisition by the SBG subsidiaries, in terms of section 89 of the
Companies Act, and the General Staff Trust, of a total of approximately
102.3 million Standard Bank Group ordinary shares on a pro rata basis from
ordinary shareholders of Standard Bank Group for an ex-dividend
consideration of R40.50 per ordinary share (`the scheme consideration`).
This represents a discount of 4.71% to the Standard Bank Group closing
ordinary share price on Friday, 9 July 2004 of R42.50. After taking into
account the interim dividend to be paid to Standard Bank Group ordinary
shareholders on or about 13 September 2004 of 50.5 cents per ordinary
share, the effective discount to the Standard Bank Group closing ordinary
share price on Friday, 9 July 2004 is 3.57%. The aggregate consideration
will be approximately R4.14 billion;
* if the scheme is implemented, the SBG subsidiaries will acquire
approximately 99.2 million Standard Bank Group ordinary shares and the
General Staff Trust will acquire approximately 3.1 million Standard Bank
Group ordinary shares; and
* after the implementation of the scheme, the ordinary shares in the SBG
subsidiaries will be sold by Standard Bank Group to the black partners.
This announcement sets out further details relating to:
* the important dates and times relevant to the scheme;
* the pro forma financial effects of the scheme based on the interim results
for the six-month period ended 30 June 2004;
* the meetings required to implement the scheme, the black ownership
initiative and the General Staff Scheme; and
* the circular to Standard Bank Group ordinary shareholders.
2. IMPORTANT DATES AND TIMES
2004
Last day to trade Standard Bank Group ordinary shares
on the JSE Securities Exchange South Africa (`JSE`)
in order to be recorded in the register of members
of Standard Bank Group to vote at the scheme meeting on
(note 2) Thursday, 2 September
Record date to vote at the scheme meeting at
17:00 on Thursday, 9 September
Last day for receipt of forms of proxy for the
scheme meeting by 09:00 on (notes 3 and 4) Friday, 10 September
Last day for receipt of forms of proxy for the
general meeting by 10:00 on (note 5) Friday, 10 September
Scheme meeting to be held at 09:00 on Monday, 13 September
General meeting to be held at 10:00 or 10 minutes
after the conclusion or adjournment of the scheme
meeting, whichever is the later, on Monday, 13 September
Announcement of results of the general scheme
meeting and the scheme general meeting on SENS
on or about Monday, 13 September
Announcement of results of the general scheme
meeting and the scheme general meeting in the
press on or about Tuesday, 14 September
Court hearing to sanction the scheme on Tuesday, 21 September
If the scheme is sanctioned and implemented:
Announcement on SENS regarding the sanctioning
of the scheme on Tuesday, 21 September
Announcement in the press regarding the
sanctioning of the scheme on Wednesday, 22 September
Expected last day to trade Standard Bank Group
ordinary shares on the JSE in order for
ordinary shareholders to be eligible to
receive the scheme consideration on (note 6) Thursday, 23 September
Expected first day to trade Standard Bank Group
ordinary shares on the JSE ex entitlement to
the scheme consideration on Monday, 27 September
Expected record date, being the date on which
ordinary shareholders must be recorded on the
register of members of Standard Bank Group in
order to be scheme participants and so become
entitled to receive the scheme consideration,
at 17:00 on Friday, 1 October
Expected operative date of the scheme, at the
commencement of trading on the JSE, on Monday, 4 October
The scheme consideration expected to be
transferred or posted (as the case may be), and
new share certificates expected to be posted, to
certificated scheme participants whose documents
of title are received by the transfer secretaries
of the Company before 12:00 on Friday,
1 October 2004, on or about Monday, 4 October
or
Failing receipt of documents of title before 12:00
on Friday, 1 October 2004, within five business
days of receipt thereof by the transfer
secretaries of the Company
The scheme consideration expected to be credited
to the dematerialised scheme participants` accounts
held at their CSDP or broker and share balances
updated Monday, 4 October
Notes
1. The abovementioned times and dates are South African times and dates, and
are subject to change. Any such change will be published on SENS and in the
press.
2. Shareholders are advised that as trading in ordinary shares on the JSE is
settled within the STRATE environment five business days following the
trade, shareholders acquiring dematerialised shares after Thursday, 2
September 2004 will not be eligible to vote at the scheme meeting.
3. If a form of proxy for the scheme meeting is not received by the time and
date shown above, it may be handed to the chairperson of the scheme meeting
by not later than 10 minutes before the scheme meeting is due to commence.
4. If the date of the scheme meeting is adjourned or postponed, forms of proxy
must be received by no later than 24 hours prior to the time of the
adjourned or postponed scheme meeting, provided that for the purposes of
calculating the latest time by which forms of proxy must be received,
Saturdays, Sundays and public holidays will be excluded.
5. If the date of the general meeting is adjourned or postponed forms of proxy
must be received by no later than 24 hours prior to the time of the
adjourned or postponed general meeting, provided that for the purposes of
calculating the latest time by which forms of proxy must be received,
Saturdays, Sundays and public holidays will be excluded.
6. Shareholders may not dematerialise or rematerialise their Standard Bank
Group ordinary shares after Thursday, 23 September 2004. Dematerialisation
and rematerialisation of Standard Bank Group ordinary shares will re-
commence after Monday, 4 October 2004.
3. PRO FORMA FINANCIAL EFFECTS
The illustrative pro forma financial effects set out below have been prepared to
indicate to Standard Bank Group ordinary shareholders the impact of the scheme
on the interim earnings per share (`EPS`), headline EPS (`HEPS`), net asset
value (`NAV`) and tangible NAV (`TNAV`) per Standard Bank Group ordinary share.
The material assumptions are set out in the notes following the tables. These
pro forma financial effects do not constitute a representation of the future
financial position of Standard Bank Group on implementation of the scheme. These
pro forma financial effects are the responsibility of the board of directors of
Standard Bank Group, have not been reviewed by the auditors and are purely for
illustrative purposes.
* It should be noted that as announced on Tuesday, 6 July 2004, Standard Bank
Group raised additional preference share capital with an aggregate value of R3
billion (`the capital raising`), the impact of which has been shown in the table
below with effect from 1 January 2004.
3.1 Pro forma financial effects of the scheme
After the
Before the capital Net After the Net
scheme raising change scheme change (3)
(%) (%)
EPS (cents) 250.3 246.7 (1.4) 245.9 (1.8)
HEPS (cents) 252.5 248.9 (1.4) 248.2 (1.7)
NAV per ordinary share
(cents) (1) 2228 2228 0.0 2071 (7.0)
TNAV per ordinary share
(cents) (1) 2172 2172 0.0 2011 (7.4)
ROE (%) (2) 23.0 22.7 24.4
1 Excludes cash in the hands of the ordinary shareholder.
2 Return on ordinary shareholders equity (`ROE`) is based on average ordinary
shareholders` equity for the period.
3 Represents the net change after the capital raising and the scheme.
Notes:
1. The EPS, HEPS, NAV per ordinary share and TNAV per ordinary share `Before
the scheme` are based on the unaudited interim results for the six-month
period ended 30 June 2004.
2. The EPS and HEPS `After the scheme` are based on the assumption that the
capital raising and the scheme were implemented on 1 January 2004. The
average prime interest rate used in calculating the pro forma financial
effects was 11.50%.
3. The NAV per ordinary share and TNAV per ordinary share `After the scheme`
are based on the assumption that the capital raising and the scheme were
implemented on 30 June 2004.
4. The EPS and HEPS `After the scheme` are based on 1 243 215 359 weighted
average ordinary shares in issue (1 342 405 556 weighted average ordinary
shares in issue as per the 2004 interim results less 99 190 197 shares
acquired by the SBG subsidiaries).
5. The NAV per ordinary share and TNAV per ordinary share `After the scheme`
are based on 1 247 293 670 ordinary shares in issue (1 346 483 867 ordinary
shares in issue as per the 2004 interim results less 99 190 197 shares
acquired by the SBG subsidiaries).
6. The adjustments assume the following events:
6.1. The SBG subsidiaries have acquired 99 190 197 ordinary shares at
R40.50 per share in terms of the scheme. The acquisition has been
facilitated by R3 billion raised in terms of the capital raising
(refer to paragraph 6.2) and surplus cash in the Standard Bank
Group including its subsidiaries (`the Group`) of R1.02 billion.
The full acquisition has been debited to equity;
6.2. 30 000 000 non-redeemable, non-cumulative, non-participating
Standard Bank Group preference shares with a par value of R0.01
each at a subscription price of R100 per share have been issued.
The preference share coupon is 70% of the prime overdraft rate of
Standard Bank Group (prior to the scheme it is assumed the Group
invested the funds from the capital raising at the average JIBAR
effective rate of 8.40%, after tax of 5.88%);
6.3. employer companies in the Group have made a gross payment on
behalf of employees in terms of the General Staff Scheme of
R211.7 million, after tax of R148.2 million, facilitated out of
surplus cash in the Group. The payment has been utilised to
acquire a further 3 136 400 ordinary shares in terms of the
scheme. These shares immediately vest with employees through the
General Staff Trust;
6.4. the Group has forgone the opportunity to earn interest on the
surplus cash and the cash utilised in the General Staff Scheme,
and would have earned interest on cash retained, at the average
JIBAR effective rate of 8.40%, after tax of 5.88%, for the period
ended 30 June 2004; and
6.5. the above transactions, unless otherwise stated, are subject to
South African taxes and the tax effects have been accounted for
in the above adjustments.
7. The scheme of Standard Bank Group`s subsidiary, Liberty Group is not
included in the pro forma financial effects.
3.2 Pro forma financial effects on Standard Bank Group including the Liberty
Life black ownership initiative (Liberty Life has also announced a proposed
black ownership initiative, which it intends to facilitate by means of a
scheme of arrangement in terms of section 311 of the Companies Act between
Liberty Life and its ordinary shareholders (`Liberty Life scheme`). If the
Liberty Life scheme is implemented wholly-owned subsidiaries of Liberty
Life will acquire approximately 25.8 million Liberty Life ordinary shares).
After the
Before the capital Net After the Net
scheme raising change scheme change (3)
EPS (cents) 250.3 246.7 (1.4) 245.3 (2.0)
HEPS (cents) 252.5 248.9 (1.4) 247.9 (1.8)
NAV per ordinary share
(cents) (1) 2228 2228 0.0 2070 (7.1)
TNAV per ordinary share
(cents) (1) 2172 2172 0.0 2010 (7.5)
ROE (%) (2) 23.0 22.7 24.4
1 Excludes cash in the hands of the ordinary shareholder.
2 ROE is based on average ordinary shareholders` equity for the period.
3 Represents the net change after the capital raising and the scheme.
Notes:
The adjustments assume the following events:
1. notes 1 to 6.5 of paragraph 3.1 above apply in addition to the Liberty Life
assumptions set out in paragraphs 1.1 to 1.4 below.
1.1 The earnings per Liberty Life ordinary share, headline earnings per
Liberty Life ordinary share, NAV per Liberty Life ordinary share, TNAV
per Liberty Life ordinary share and the return on equity per Liberty
Life ordinary share `Before the scheme` are based on the unaudited
results for the six-month interim period ended 30 June 2004. The
weighted average number of Liberty Life ordinary shares in issue, as
per the 30 June 2004 unaudited results, of 275.3 million was used. In
respect of the NAV per Liberty Life ordinary share and TNAV per
Liberty Life ordinary share, the number of Liberty Life ordinary
shares in issue at 30 June 2004, as per the 2004 unaudited results, of
275.8 million was used.
1.2 The earnings per Liberty Life ordinary share, headline earnings per
Liberty Life ordinary share and the return on equity `After the
scheme` of 172.6, 157.1 and 10.5%, respectively, are based on the
assumption that the Liberty Life black ownership initiative was
implemented on 1 January 2004 using 249.5 million Liberty Life
ordinary shares in issue (275.3 million weighted average Liberty Life
ordinary shares in issue as per the 30 June 2004 unaudited results
less 25.8 million Liberty Life ordinary shares owned by Liberty Life`s
black partners).
1.3 The Liberty Life NAV per Liberty Life ordinary share and TNAV per
Liberty Life ordinary share `After the scheme` of 3049.5 and 2950.0,
respectively, are based on the assumption that the Liberty Life black
ownership initiative was implemented on 30 June 2004 using 250.0 million
Liberty Life ordinary shares in issue (275.8 million Liberty Life ordinary
shares in issue as per the 2004 unaudited results less 25.8 million Liberty
Life ordinary shares owned by Liberty Life`s black partners).
1.4 The `After the scheme` column reflected above, includes the following
assumptions made by Liberty Life:
1.4.1 the wholly-owned subsidiaries of Liberty Life, acquire 25.8
million Liberty Life ordinary shares at R48.50 per share in
terms of the Liberty Life black ownership initiative. The
pro rata share repurchase is funded by R1.3 billion of
capital in Liberty Life;
1.4.2 the pro rata share repurchase is debited to equity;
1.4.3 dividends on preference shares paid by these wholly-owned
subsidiaries to Liberty Life equal the dividends on Liberty
Life ordinary shares paid to these subsidiaries;
1.4.4 the cumulative preference dividends on the preference shares
in the wholly-owned subsidiaries subscribed for by Liberty
Life are calculated at 65% of the prime interest rate
(nominal annual compounded semi-annually);
1.4.5 the pro rata repurchase of R1.3 billion is financed from
Liberty Life`s shareholders` funds through Liberty Life`s
existing available cash and near cash, which would have
earned an after-tax return of 4.1% per annum;
1.4.6 a cost to company expense of approximately R33.4 million is
paid to Liberty Life employees and agents, which will be
used by employees and agents to acquire approximately 460
000 Liberty Life ordinary shares from Liberty Life ordinary
shares currently held by Liberty Life;
1.4.7 the return on equity is based on Liberty Life average
ordinary shareholders` funds for the period; and
1.4.8 estimated costs associated with the Liberty Life scheme of
approximately R22.5 million have been taken into account;
2. the Liberty Life Scheme is approved; and
3. cash obtained by Liberty Holdings Limited from the repurchase earns a
return equivalent to a call interest rate being 10.49%, after tax of 7.34%.
4. THE SCHEME MEETING, THE GENERAL MEETING AND THE CIRCULAR TO STANDARD BANK
GROUP ORDINARY SHAREHOLDERS
4.1 The scheme meeting
The scheme meeting of ordinary shareholders of Standard Bank Group
recorded in the register of members of Standard Bank Group at the
close of business on Thursday, 9 September 2004 will be held at 09:00
on Monday, 13 September 2004 in the HP de Villiers Auditorium,
Standard Bank Centre, 6 Simmonds Street, Johannesburg to consider and,
if deemed fit, to approve the scheme.
4.2 The general meeting
A general meeting of Standard Bank Group ordinary shareholders will be
held at 10:00 or 10 minutes after the conclusion or adjournment of the
scheme meeting, whichever is the later, on Monday, 13 September 2004
in the HP de Villiers Auditorium, Standard Bank Centre, 6 Simmonds
Street, Johannesburg to consider and, if deemed fit, pass, inter alia,
the resolutions required to implement the scheme.
4.3 The circular to Standard Bank Group ordinary shareholders
A document setting out details of the scheme, the black ownership
initiative and the General Staff Scheme was posted to Standard Bank
Group ordinary shareholders today.
Johannesburg
18 August 2004
Investment bank and joint sponsor
Standard Bank
Independent financial adviser
JP Morgan
Independent lead sponsor
Deutsche Securities
Attorneys
Bowman Gilfillan Attorneys
Joint independent reporting accountants
KPMG
and
PricewaterhouseCoopers
Date: 18/08/2004 09:00:46 AM Produced by the JSE SENS Department
