NEDCOR LIMITED - SALE OF EDWARD NATHAN & FRIEDLAND (PTY) LTD
NEDCOR LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1966/010630/06
JSE share code: NED
ISIN code: ZAE000004875
(`Nedcor` or `the group`)
SALE OF EDWARD NATHAN & FRIEDLAND (PTY) LTD
The board of directors of Nedcor wishes to announce the sale of the corporate
law advisory and consultancy business of Edward Nathan & Friedland (`ENF`),
acquired by the group in October 1999. ENF has been sold, with effect from 31
October 2004, for a cash consideration of R50 million to Edward Nathan (Pty) Ltd
(`Edward Nathan`), which is owned by the 47 directors of the business.
Nedcor`s strategy is to focus on its core banking business and ENF is not
regarded as a core business. Considering all relevant factors, including the
need to structure the business of Edward Nathan to continue to attract, retain
and properly incentivise professional staff and the expiry of the service
contracts of key directors of ENF on 31 December 2004, it is the view of the
Nedcor board of directors that this transaction represents the best strategic
outcome for Nedcor shareholders.
In addition to the purchase price of R50 million, the available cash in ENF of
R33 million will be paid back to Nedbank Limited (`Nedbank`) in part settlement
of the ENF loan account. The overall effect of the sale of ENF will be a loss to
the Nedcor group of R20 million in 2004.
In terms of the agreements:
- Neither Nedcor nor its subsidiaries (`the Nedcor group`) will provide
funding for the acquisition by the directors.
- No member of the Nedcor group has provided any warranties in respect of the
acquisition by the directors.
- Professor Michael Katz is one of the directors of Edward Nathan. He has
undertaken to remain with Edward Nathan and remains vice-chairman and a non-
executive director of the Nedcor and Nedbank boards.
- Both Edward Nathan and Nedcor will continue to refer work to each other
where appropriate, provided this does not create any conflicts with clients or
breach client confidentiality.
- The Nedcor board requested Ernst & Young Corporate Finance (Pty) Limited
(`E&Y Corporate Finance`) to conduct an independent assessment of the
transaction for purposes of good governance. Following the conclusion of their
procedures, E&Y Corporate Finance is of the opinion that the transaction has
been concluded at the lower end of their fair value range. However, after
considering relevant qualitative factors, E&Y Corporate Finance has nevertheless
concluded that the transaction is fair and reasonable.
Sandton
22 December 2004
For further information contact
Tier 1 Investor Relations
Tel +27 (0)21 702-3102
Investment bank and joint sponsor
Nedbank Capital
Lead Sponsor
Merrill Lynch South Africa (Pty) Limited
Date: 22/12/2004 02:30:02 PM
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