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Investec Plc - Proposed Sale Of Carr Sheppards Crossthwaite Ltd To Rensburg Plc
Release Date: 23/03/2005 09:10:15 Code(s): INP INL
Investec Plc - Proposed Sale Of Carr Sheppards Crossthwaite Ltd To Rensburg Plc
Not for release, publication or distribution in whole or in part in or into the
United States, Canada, Australia or Japan
INVESTEC PLC
Reg no. 3633621
Isin:GB0031773103
Share code:INP
Investec Limited
Incorporated in the Rep of South Africa
Reg No :1925/002833/06
Share code:INL Isin:ZAE000040531
PROPOSED SALE OF CARR SHEPPARDS CROSTHWAITE LIMITED TO RENSBURG PLC
Investec plc shareholders are referred to the announcement released on 10
December 2004 (`the 10 December Announcement`) and are now advised that the
Board of Investec plc has reached an agreement for the sale of Carr Sheppards
Crosthwaite Limited to Rensburg plc. Attention of the shareholders is drawn to
the following announcement made today by the Board of Rensburg plc (listed on
the London Stock Exchange under share code RBG) which contains further
information relating to the recommended transaction. Save as disclosed in the
Rensburg Plc announcement, there has been no significant change affecting any
matter contained in the 10 December Announcement and no other significant matter
has arisen which would have been required to be mentioned in the 10 December
Announcement if it had arisen at the time of preparation of the 10 December
Announcement.
23 March 2005
Sponsor: Investec Bank limited
RENSBURG PLC
ACQUISITION TO CREATE THE UK`S SEVENTH LARGEST PRIVATE CLIENT FUND MANAGER WITH
GBP10.3 BILLION FUNDS UNDER MANAGEMENT
* Transformational acquisition of Carr Sheppards Crosthwaite to create the
seventh largest private client wealth manager in the UK with GBP10.3 billion
of
funds under management.
* Compelling strategic fit based on a common vision and complementary
geographic and service strengths.
* Creation of a new independent listed investment management group with
revenues of approximately GBP84 million. (1)
* Considerable scope to grow future revenues of the enlarged group by improving
overall return on funds under management towards the industry benchmark of
100 basis points.
* The directors and proposed directors expect the acquisition to be
significantly earnings enhancing for the enlarged group for the first full
financial year post completion. (2)
* Carr Sheppards Crosthwaite forecast profit before tax(3) for the year ending
31 March 2005 of GBP8.3 million, after net non-recurring charges of
GBP7.3 million.
* Rensburg profit before tax(3) for the year ending 30 November 2004 of GBP8.8
million.
* Expected annual pre-tax cost synergies of GBP5.5 million, a significant
proportion of which is expected to be achieved in the year ending 31 March
2007.
* The enlarged group will adopt Rensburg Sheppards as the corporate name and
brand.
* Christopher Clarke will be Chairman of Rensburg Sheppards plc, Michael Burns
Chief Executive, Stephen Elliott Managing Director and Jonathan Wragg Finance
Director.
Commenting on the acquisition, Michael Burns, Chief Executive of Rensburg and
proposed Chief Executive of Rensburg Sheppards, said:
`This combination is a unique opportunity to create one of the leading private
client wealth management groups extending our franchise throughout the UK. The
clear financial and commercial benefits for all our stakeholders are supported
by a strong strategic fit, common vision, shared culture and low risk
integration plan. I am confident that Rensburg Sheppards will be well
positioned to grow revenues, benefit from cost savings and continue to develop
as an attractive stand alone listed entity.`
Stephen Elliott, Chief Executive of Carr Sheppards Crosthwaite and proposed
Managing Director of Rensburg Sheppards, said:
`This transaction represents a significant step forward for Carr Sheppards
Crosthwaite which will benefit the business and its clients by creating value,
deepening our presence in the UK and bringing together complementary investment
products. We are very enthusiastic about this combination.`
Structure and financial terms
* Carr Sheppards Crosthwaite is a wholly-owned subsidiary of Investec. The
transaction will be effected by the acquisition of Carr Sheppards Crosthwaite
through the issue of 25.5 million new Rensburg ordinary shares and a GBP60
million subordinated loan to Investec. Investec has agreed to transfer 2.8
million of its consideration shares to an Employee Benefit Trust (`EBT`) to
be established for the benefit of certain key Carr Sheppards Crosthwaite
employees.
* Following Completion, Investec will own approximately 47.7% of Rensburg`s
enlarged share capital, existing Shareholders will own approximately 46.4%,
with the balance of Rensburg`s Ordinary Shares held by the EBT.
* Furthermore, for a period of five years following completion, Investec has
undertaken not to vote in excess of 30% of the voting rights of the issued
share capital of Rensburg Sheppards.
* As part of the acquisition terms, Rensburg shareholders will be entitled to
a Special Dividend of 45 pence per existing ordinary share, expected to be
paid on 18 May 2005.
* Rensburg will issue to Investec a subordinated loan of GBP60 million at
completion. The total amount is repayable in equal instalments over eight
years, following a repayment holiday of two years.
* Based upon the price of 500p per Ordinary Share, being the price at which
trading in Rensburg ordinary shares was suspended on 10 December 2004, the
acquisition values Carr Sheppards Crosthwaite at approximately GBP188
million.
Rensburg is being advised by Fenchurch Advisory Partners and Rothschild.
Investec is being advised by Goldman Sachs and Putnam Lovell NBF. Numis
Securities is sponsor and corporate broker to Rensburg.
This summary should be read in conjunction with the full text of the
announcement.
Enquiries:
Rensburg plc +44 151 227 Investec plc
2030 Bernard Kantor +44 20 7597 4000
Michael Burns Ursula Munitich +27 11 286 7070
Jonathan Wragg
Carr Sheppards
Crosthwaite
Limited +44 20 7597 1234
Stephen Elliott
Fenchurch Advisory +44 20 7961 Goldman Sachs +44 20 7774 1000
0740 Luigi Rizzo
Partners Jonathan Sorrell
Malik Karim
Graham Marchant
Putnam Lovell
Rothschild NBF +44 20 7478 1600
David Forbes Kevin Pakenham
+44 113 200 1900 Nirav Hathi
Jonathan Eddis
+44 207 280 5000 Citigate Dewe +44 20 7638 9571
Rogerson
Numis Securities +44 20 Simon Rigby
7776 1500 Sara Batchelor
Christopher Wilkinson
Simon Law
gcg hudson sandler +44 20 7796 Tavistock +44 20 7920 3150
4133 Communications
Nick Lyon David Foxman
Fenchurch Advisory Partners, which is authorised and regulated by the Financial
Services Authority in the UK, is acting for Rensburg and no one else in
connection with the transaction and will not be responsible to any person other
than Rensburg for providing the protections afforded to the clients of Fenchurch
Advisory Partners nor for providing advice in relation to the transaction.
Rothschild, which is authorised and regulated by the Financial Services
Authority in the UK, is acting for Rensburg and no one else in connection with
the transaction and will not be responsible to any person other than Rensburg
for providing the protections afforded to the clients of Rothschild nor for
providing advice in relation to the transaction.
Numis Securities, which is authorised and regulated by the Financial Services
Authority in the UK, is acting for Rensburg and no one else in connection with
the transaction and will not be responsible to any person other than Rensburg
for providing the protections afforded to the clients of Numis nor for providing
advice in relation to the transaction.
Goldman Sachs, which is authorised and regulated by the Financial Services
Authority in the UK, is acting for Investec and no one else in connection with
the transaction and will not be responsible to any person other than Investec
for providing the protections afforded to the clients of Goldman Sachs nor for
providing advice in relation to the transaction.
Putnam Lovell NBF, which is authorised and regulated by the Financial Services
Authority in the UK, is acting for Investec and no one else in connection with
the transaction and will not be responsible to any person other than Investec
for providing the protections afforded to the clients of Putnam Lovell NBF nor
for providing advice in relation to the transaction.
Notes:
(1) Based on the most recent audited annual accounts.
(2) Before goodwill amortisation and exceptional items. This statement should
not be construed as a profit forecast or be interpreted to mean that the
future earnings per share of the Enlarged Group will necessarily be greater
than the historic published earnings per share figures for Rensburg for the
year ended 30 November 2004.
(3) Before exceptional items and amortisation of goodwill.
RENSBURG PLC
ACQUISITION TO CREATE THE UK`S SEVENTH LARGEST PRIVATE CLIENT FUND MANAGER WITH
GBP10.3 BILLION FUNDS UNDER MANAGEMENT
Introduction
On 10 December 2004 the Boards of Rensburg and Investec plc announced that
agreement had been reached in principle for Rensburg to acquire Carr Sheppards
Crosthwaite, a wholly owned indirect subsidiary of Investec plc. Following
completion of its due diligence enquiries and further negotiations with
Investec, the Board of Rensburg is pleased to announce today that it has
conditionally agreed to acquire Carr Sheppards Crosthwaite for GBP188 million
through the issue of 25.5 million Consideration Shares and the creation of a
GBP60 million Subordinated Loan. As part of the terms of the Acquisition,
Shareholders will be entitled to a Special Dividend of 45 pence per Existing
Ordinary Share.
This transformational acquisition, which will create a major independent UK
wealth management business with combined funds under management of approximately
GBP10.3 billion, is being driven by a compelling strategic fit, common vision
and complementary geographic and service strengths. As a result, the Directors
believe the Acquisition will generate significant cost savings and the Enlarged
Group will be well positioned to take advantage of future revenue growth
opportunities.
Under the terms of the Acquisition Agreement, of the 25.5 million Consideration
Shares to be issued to Investec, Investec has agreed to immediately transfer 2.8
million Consideration Shares to an Employee Benefit Trust for the benefit of
certain key Carr Sheppards Crosthwaite employees. Accordingly, following
Completion, Investec will own approximately 47.7 per cent. of Rensburg`s
enlarged share capital, existing Shareholders will own approximately 46.4 per
cent., with the balance of Rensburg`s Ordinary Shares held by the EBT.
Investec has entered into a lock up and standstill agreement in relation to its
shareholding in Rensburg. Furthermore, for a period of five years following
Completion, Investec has undertaken not to vote in excess of 30 per cent. of the
voting rights of the issued share capital of the Company. Additionally, Investec
has agreed (subject to certain exceptions) not to dispose of any Consideration
Shares for a period of 18 months from Completion and thereafter for a further
period of 18 months not to dispose of any Consideration Shares except in a
manner which is intended to maintain an orderly market in the Ordinary Shares of
the Company.
The terms of the Acquisition were based on the underlying profitability, the
relative sizes and the growth prospects of the two businesses. The transaction
structure has been designed to ensure that there is sufficient liquidity in the
Enlarged Group`s shares and as indicated above, Investec has undertaken not to
vote in excess of 30 per cent. of the issued share capital of the Company
following Completion.
The Consideration Shares will not qualify for the final dividend in respect of
the year ended 30 November 2004, the interim dividend in respect of the first
six months of the current financial year nor for the Special Dividend. Based
upon the price of GBP5 per Ordinary Share, being the price at which trading in
the Existing Ordinary Shares was suspended on 10 December 2004, the Acquisition
values Carr Sheppards Crosthwaite at approximately GBP188 million.
In view of the size of the Acquisition relative to Rensburg, the Acquisition and
the issue of the Consideration Shares are conditional, inter alia, on the
approval of Shareholders which will be sought at an EGM on 20 April 2005. The
Acquisition is classified as a reverse takeover under the Listing Rules and
accordingly trading in the Existing Ordinary Shares of Rensburg was suspended on
10 December 2004. Trading in the Existing Ordinary Shares is expected to resume
at 8.00 a.m. on 24 March 2005.
Background to and reasons for the Acquisition
Strategic rationale
The Board is pleased to have agreed this transformational acquisition, which is
consistent with Rensburg`s long-held strategic ambition to develop both
organically and through acquisition. The combination will grow funds under
management, while providing continuity for Rensburg`s clients and staff.
The Directors and Proposed Directors believe that the principal strategic and
operational benefits arising from a combination of Rensburg and Carr Sheppards
Crosthwaite are:
* the creation of a major new force in the investment management industry with
total funds under management of GBP10.3 billion, with the Enlarged Group
ranking as the 7th largest private client wealth manager in the UK;
* a balanced spread of businesses across private client, institutional and
charities mandates. The Directors and Proposed Directors further believe that
the prospects of the Enlarged Group will be enhanced by bringing together a
number of complementary investment and product skills possessed by Rensburg
and Carr Sheppards Crosthwaite;
* a strong pan UK presence enabling significant geographic diversification.
Rensburg`s office network which is based predominantly in the North
represents an excellent fit with Carr Sheppards Crosthwaite`s office network
based in the South;
* the creation of a new independent listed investment management group with
substantial combined revenues (of approximately GBP84 million based on the
most
recent audited annual accounts) which will be well positioned to take
advantage of future revenue growth opportunities; and
* the scope for significant value creation through the combination and
rationalisation of the two operations, which is expected to provide annual
pre-tax synergies of approximately GBP5.5 million as set out below.
Financial Effects of the Acquisition
Impact on earnings
The Directors and Proposed Directors expect the Acquisition to be significantly
earnings enhancing for the Enlarged Group (before goodwill amortisation and
exceptional items) for the first full financial year post Completion.(1)
Cost Synergies
The Directors and Proposed Directors believe that the Acquisition will enable
annual pre-tax cost synergies of approximately GBP5.5 million to be achieved in
full by the year ending 31 March 2008. A significant proportion of the synergies
is expected to be achieved in the year ending 31 March 2007. These cost
synergies will primarily be realised by combining the two settlement systems
onto a single system. The Directors and Proposed Directors expect that pre-tax
reorganisation costs of approximately GBP9.0 million (excluding professional
costs associated with the Acquisition) will be incurred to achieve the
integration plan of which a significant proportion will be reflected in the
Enlarged Group`s results for the period ending 31 March 2006.
In addition, exceptional non-cash reorganisation costs of approximately GBP1.0
million are expected to be incurred in relation to certain asset write-downs in
the period ending 31 March 2006, plus an additional GBP0.7 million of capital
expenditure.
The senior management of Rensburg and Carr Sheppards Crosthwaite have devoted
considerable time and resources to establishing an integration plan for the
delivery of the potential synergy benefits referred to above.
Potential revenue synergies
In addition to the pre-tax cost synergies referred to above, the Board believes
that there is considerable scope to grow the future revenues of the Enlarged
Group by improving its overall return on funds under management. Currently, the
Enlarged Group generates an aggregate yield of approximately 82 basis points,
which is considerably lower than the return being achieved by certain of
Rensburg`s competitors and what the Board believes is the industry benchmark of
100 basis points.
Subordinated Loan
Rensburg will enter into a Subordinated Loan with Investec for GBP60 million of
which GBP45 million will attract a fixed interest rate to be set at 2.25 per
cent. above the 10 year UK swap rate as at the close of business the day before
Completion. The balance of GBP15 million will attract a floating interest rate
of 2.25 per cent. above six month LIBOR. The total amount is repayable in equal
instalments over eight years, following a repayment holiday of two years.
EBT
In accordance with accounting standards, the value of the Consideration Shares
that are received by Investec and subsequently transferred into the EBT will be
charged as an exceptional expense into the profit and loss account of the
Enlarged Group, over the three years following Completion. There will, however,
be no cash outflows nor any change to distributable reserves arising as a
consequence of this.
Forecast
For the year ending 31 March 2005, the Directors and the Proposed Directors and
the directors of Investec plc expect the profit before exceptional items and
taxation of Carr Sheppards Crosthwaite to be approximately GBP8.3 million. A
report on the Forecast is contained in the Listing Particulars.
Reflected within the Forecast are certain items of income and expenditure that
will be affected by the Acquisition, together with items of income and
expenditure relating to businesses which were disposed of or closed down and
costs relating to retiring directors of Carr Sheppards Crosthwaite who are not
being replaced.
As a subsidiary of Investec plc, Carr Sheppards Crosthwaite has historically
incurred certain charges from Investec plc which are reflected within the
Forecast. Under the terms of the Transitional Services Agreement, (which is
summarised in the Listing Particulars), Investec has agreed, from Completion,
that these charges will be at the levels set out in that agreement.
Certain costs relating to current remuneration and incentive practices will be
discontinued as a result of the Acquisition.
The following table illustrates the effect on Carr Sheppards Crosthwaite had the
non recurring items referred to above been excluded as of 1 April 2004.
Year ending
31 March
2005
Costs relating to current remuneration and GBP4.1m
incentive practices which will be
discontinued
Reduction in costs charged to Carr Sheppards GBP2.1m
Crosthwaite by Invested plc
Expenditure less income relating to GBP1.1m
businesses which have been disposed of or
closed down and costs of retired directors
Integration plan
The management teams of both Rensburg and Carr Sheppards Crosthwaite have
demonstrated historically their respective integration skills; Rensburg through
its integration of the acquisitions of Nicholson Barber Limited in 1999 and
Dennis Murphy Campbell Limited in 2001 and Carr Sheppards Crosthwaite through
the mergers of W I Carr Investment Limited and Sheppards Limited in 1993 and
Carr Sheppards Limited and Henderson Crosthwaite Limited in 1999. Key senior
management involved in all the above transactions are committed to the Enlarged
Group, and they will have significant influence on the delivery of the proposed
integration plan.
Since Rensburg`s announcement on 10 December 2004 relating to the Acquisition,
management teams from both Rensburg and Carr Sheppards Crosthwaite have
continued to develop detailed integration plans which will leverage the
strengths of the two businesses whilst seeking to ensure that disruption to
client services is minimised.
A process to manage the integration has been established under the direction of
Michael Burns (Chief Executive) and Stephen Elliott (Managing Director),
supported by other experienced senior management from the two businesses. A
steering committee to oversee the implementation of the overall integration plan
has been established.
Back-office functions
The migration of the Enlarged Group`s client base onto one common settlement
system is scheduled to commence in November 2005 and the Directors and Proposed
Directors anticipate this to be completed by December 2006. In managing the
migration of the back-office functions, careful consideration has been given to
ensuring the appropriate skill-base is retained or recruited to meet the
operational requirements of the Enlarged Group.
Locations
The Enlarged Group`s headquarters and registered office will remain in Leeds.
The London-based operations of Rensburg and Carr Sheppards Crosthwaite will be
consolidated into a single location in 2 Gresham Street, London. While the
principal operations facilities will be centralised, local client servicing
operations will be situated in Belfast, Cheltenham, Farnham, Glasgow, Leeds,
Liverpool, London, Manchester, Reigate and Sheffield.
Branding
Rensburg and Carr Sheppards Crosthwaite are well-established brands in the
wealth management industry and on Completion, Rensburg will be renamed Rensburg
Sheppards plc.
Integration process and timetable
In summary, the major areas of integration that will be covered following
Completion include integration of the settlement systems, alignment of business
processes, transitional service arrangements, re-branding and harmonisation of
service levels. The project contains within it a series of milestones that will
be closely monitored by the steering committee at regular intervals. The plan
has been prepared on the basis that all significant aspects of it will be
completed by no later than 31 March 2007. It is the Directors` and Proposed
Directors` intention to measure progress against this stated plan.
Current trading and prospects for the Enlarged Group
Since their respective period ends, Rensburg and Carr Sheppards Crosthwaite have
continued to perform strongly. The Directors and the Proposed Directors believe
that the Enlarged Group will be well positioned to build on the existing
profitability and strengths of Rensburg and Carr Sheppards Crosthwaite as they
integrate the businesses and seek to realise the synergies from the Acquisition.
Rensburg`s trading performance has been assisted by the successful
implementation of an amended charging structure by Rensburg on 1 September 2004,
providing a stepped increase in income from existing clients that is
contributing to growth in the current financial year. Fee-based revenues have
also benefited from a continuation of the recent rise in UK equity capital
markets.
In addition to the acquisition synergies described elsewhere in the Listing
Particulars, the Directors and Proposed Directors would propose to apply the
revised fee structure, which has already been successfully implemented by
Rensburg, to the Carr Sheppards Crosthwaite discretionary business.
Accordingly, the Directors and the Proposed Directors believe that the prospects
for the Enlarged Group for the current financial year are encouraging and will
be enhanced by the benefits which the Directors and the Proposed Directors
believe the Enlarged Group will derive from the Acquisition. To provide
Shareholders with additional relevant information on the prospects for the
Enlarged Group, a Forecast for Carr Sheppards Crosthwaite has been prepared and
reported upon (see `Financial effects of the Acquisition` above).
Board structure
Following Completion, the board of the Enlarged Group will be as follows:
Non-Executive Christopher G. (Rensburg)
Chairman Clarke
Chief Executive Michael H. (Rensburg)
Burns
Managing Stephen Elliott (Carr Sheppards
Director Crosthwaite)
Finance Jonathan P. (Rensburg)
Director Wragg
Executive G.C. Nicholas (Rensburg)
Director Lane Fox
Executive Nicholas (Carr Sheppards
Director Bagshawe Crosthwaite)
Executive Ian Maxwell (Carr Sheppards
Director Scott Crosthwaite)
Senior Andrew Tyrie (Rensburg)
independent
Non-Executive
Director
Non-Executive Stephen Koseff (Investec)
Director
Non-Executive Bernard Kantor (Investec)
Director
It is intended to appoint a further independent Non-Executive Director to the
Board in due course, following Completion. Furthermore, it is proposed that on
Completion, Robert Allen, Barry Anysz and Nicholas Williams (Executive
Directors) and Katrina Michel (Non-Executive Director) will retire from the
Board. The retiring Executive Directors will retain senior management positions
within the Enlarged Group.
EBT and remuneration structure
It is proposed that Investec plc will establish prior to Completion the EBT,
which will be a Jersey based trust. The EBT will be constituted by a trust deed
for the benefit of employees or former employees of the Investec Group
(including Carr Sheppards Crosthwaite Group) and certain family members of any
such employees or former employees.
It is intended that as soon as possible following Completion, but no later than
30 November 2005, the proposed board of the Enlarged Group, in conjunction with
the Remuneration Committee will implement a long term incentive plan. These
arrangements will so far as practicable seek to adhere to best practice for
listed companies. In addition it is intended that the Remuneration Committee, in
conjunction with the Board, will review the remuneration of the Directors and
Proposed Directors shortly after Completion.
Dividend policy
Following Completion, the dividend policy of the Company will be to
progressively increase the dividend from its current levels but subject always
to the Company having satisfactory working capital (including satisfactory
regulatory capital) for the foreseeable future.
Special Dividend
As part of the transaction, Rensburg intends to distribute approximately GBP10
million to Shareholders from existing cash resources of the Company. This
distribution will be effected by a cash payment of the Special Dividend of 45
pence for each Ordinary Share (other than the Consideration Shares) by way of
interim dividend to Shareholders on the register on the Record Date. Payment of
the Special Dividend is conditional upon Completion.
Pre-conditional offer proposal from Rathbone Brothers plc (`Rathbones`)
Subsequent to Rensburg`s announcement on 10 December 2004 that agreement had
been reached in principle for Rensburg to acquire Carr Sheppards Crosthwaite
from Investec plc, Rensburg received an unsolicited approach from Rathbones.
Following extensive discussions between Rensburg and Rathbones (including full
exchange of information), Rathbones announced a pre-conditional offer proposal
to acquire the entire issued share capital of Rensburg on 28 February 2005. This
pre-conditional offer proposal comprised 0.74 new Rathbones ordinary shares and
50 pence in cash for each Rensburg Ordinary Share, which on the basis of
Rathbones` closing price on 25 February 2005 of 819 pence per ordinary share
(the business day on which Rathbones` pre-conditional offer proposal was
rejected by the Board) valued each Rensburg Ordinary Share at 656 pence. At the
close of business on 22 March 2005 (the last business day prior to this
announcement) Rathbones` pre-conditional offer proposal valued each Rensburg
Ordinary Share at 652 pence.
The Board of Rensburg announced on 28 February 2005 that it had unanimously
rejected Rathbones` pre-conditional offer proposal. This pre-conditional offer
proposal was and continues to be rejected for the following reasons:
* the Board believes that Rathbones` pre-conditional offer proposal
significantly undervalues Rensburg and fails to reflect an appropriate
premium for control over Rensburg`s pre-suspension price of 500 pence per
share as adjusted to take into account the underlying improvement in market
conditions or Rensburg`s positive trading performance and outlook since 9
December 2004, the last business day prior to the suspension of Rensburg`s
Ordinary Shares. Between 9 December 2004 and 22 March 2005, the last business
day prior to this announcement, the FTSE 100 index had increased by 5 per
cent. and Rathbones` share price had increased by 6 per cent.;
* the Board perceives there to be significant implementation risks entailed in
a combination of Rathbones with Rensburg, including potential business risks
concerning certain business units and the retention of certain key fee
earning Rensburg staff, together with the associated effects on revenue; and
* the Board believes, subject to achieving the expected significant revenue and
cost synergies associated with the Acquisition, a combination with Carr
Sheppards Crosthwaite should create greater value for Shareholders relative
to Rathbones` pre-conditional offer proposal as outlined above.
Enquiries:
Rensburg plc +44 151 227 Investec plc
2030 Bernard Kantor +44 20 7597 4000
Michael Burns Ursula Munitich +27 11 286 7070
Jonathan Wragg
Carr Sheppards
Crosthwaite
Limited +44 20 7597 1234
Stephen Elliott
Fenchurch Advisory +44 20 7961 Goldman Sachs +44 20 7774 1000
0740 Luigi Rizzo
Partners Jonathan Sorrell
Malik Karim
Graham Marchant
Putnam Lovell
Rothschild NBF +44 20 7478 1600
David Forbes Kevin Pakenham
+44 113 200 1900 Nirav Hathi
Jonathan Eddis
+44 207 280 5000 Citigate Dewe +44 20 7638 9571
Rogerson
Numis Securities +44 20 Simon Rigby
7776 1500 Sara Batchelor
Christopher Wilkinson
Simon Law
gcg hudson sandler +44 20 7796 Tavistock +44 20 7920 3150
4133 Communications
Nick Lyon David Foxman
Fenchurch Advisory Partners, which is authorised and regulated by the Financial
Services Authority in the UK, is acting for Rensburg and no one else in
connection with the transaction and will not be responsible to any person other
than Rensburg for providing the protections afforded to the clients of Fenchurch
Advisory Partners nor for providing advice in relation to the transaction.
Rothschild, which is authorised and regulated by the Financial Services
Authority in the UK, is acting for Rensburg and no one else in connection with
the transaction and will not be responsible to any person other than Rensburg
for providing the protections afforded to the clients of Rothschild nor for
providing advice in relation to the transaction.
Numis Securities, which is authorised and regulated by the Financial Services
Authority in the UK, is acting for Rensburg and no one else in connection with
the transaction and will not be responsible to any person other than Rensburg
for providing the protections afforded to the clients of Numis nor for providing
advice in relation to the transaction.
Goldman Sachs, which is authorised and regulated by the Financial Services
Authority in the UK, is acting for Investec and no one else in connection with
the transaction and will not be responsible to any person other than Investec
for providing the protections afforded to the clients of Goldman Sachs nor for
providing advice in relation to the transaction.
Putnam Lovell NBF, which is authorised and regulated by the Financial Services
Authority in the UK, is acting for Investec and no one else in connection with
the transaction and will not be responsible to any person other than Investec
for providing the protections afforded to the clients of Putnam Lovell NBF nor
for providing advice in relation to the transaction.
Notes:
(1) This statement should not be construed as a profit forecast or be
interpreted to mean that the future earnings per share of the Enlarged Group
will necessarily be greater than the historic published earnings per share
figures for Rensburg for the year ended 30 November 2004.
Notes for Editors
Information on the Rensburg Group
Rensburg is an investment management business with funds under management of
GBP4.2 billion as at 30 November 2004 of which GBP2.1 billion related to fee
paying clients, GBP1.6 billion to managed clients and GBP0.5 billion to Rensburg
Fund Management Limited. Rensburg has offices in London, Liverpool, Leeds,
Sheffield, Manchester, Glasgow and Belfast. From these offices, Rensburg offers
a full range of financial services to private and corporate clients, including
investment management and financial planning.
On 15 February 2005 Rensburg announced its preliminary results for the year
ended 30 November 2004, reporting revenues from continuing operations of GBP36.9
million (2003: GBP32.0 million), profit before tax from continuing operations
(before exceptional items and amortisation) of GBP8.8 million (2003: GBP6.7
million) and net assets of GBP43.6 million (2003: GBP41.9 million).
Following Completion, the Enlarged Group will change its financial year end to
31 March. For the financial period to 31 March 2006, the Enlarged Group will
therefore prepare a first interim statement for the six months to 31 May 2005
and a second interim financial statement for the four months to 30 September
2005.
Information on the Carr Sheppards Crosthwaite Group
Carr Sheppards Crosthwaite is the result of the amalgamation of three of the
oldest names in the London stock broking sector, all of whom trace their
business origins back to the early nineteenth century. The Investec Group
acquired Carr Sheppards in 1997 and Henderson Crosthwaite in 1998. The
businesses were subsequently merged to form Carr Sheppards Crosthwaite and
Investec has since supported the development of the business into one of the
leading UK private client and charity fund managers.
Carr Sheppards Crosthwaite is headquartered in London with regional offices in
Reigate, Farnham and Cheltenham. The business provides investment management and
financial planning advice to private clients, the great majority of whom are
resident in the UK. Carr Sheppards Crosthwaite offers its clients discretionary
and advisory portfolio management services.
As at 28 February 2005, Carr Sheppards Crosthwaite had assets under management
of GBP6.1 billion of which 66 per cent. were managed on a discretionary basis
and 34 per cent. on an advisory basis. Carr Sheppards Crosthwaite has
approximately 20,000 private clients and approximately 450 charities and
institutional clients.
The success of Carr Sheppards Crosthwaite`s business model has been built on
maintaining and developing a growing and active client base, the retention and
incentivisation of successful fund management teams and maintaining a strong
reputation in the market through good client advice and service. This is
evidenced by a low level of staff turnover and its historic record of high
client retention over a sustained period.
Carr Sheppards Crosthwaite is a wholly-owned subsidiary of CSC Holdings, which
is itself a wholly-owned subsidiary of Investec.
For the year ended 31 March 2004 Carr Sheppards Crosthwaite reported revenues of
GBP46.6 million (2003: GBP41.1 million), profit before tax from continuing
operations (before exceptional items and amortisation) of GBP6.0 million (2003:
GBP4.1 million) and net assets of GBP15.7 million (2003: GBP23.6 million).
Information on Investec Group
The Investec Group is an international specialist banking group that provides a
diverse range of financial products and services to a niche client base in three
principal geographies namely, UK, Australia and South Africa. Its operations
focus on four key areas: Private Client Activities, Treasury and Specialised
Finance, Investment Banking and Asset Management.
In July 2002 the Investec Group implemented a dual listed companies structure
with primary listings on the London and Johannesburg Stock Exchanges. The
Investec Group`s current market capitalisation is approximately GBP1.8 billion.
The Investec Group`s UK operations mirror those of its other international
businesses and include:
* Investec Private Bank
* Investec Treasury and Specialised Finance
* Investec Investment Banking and Securities
* Investec Asset Management
* Carr Sheppards Crosthwaite (Private Client Stockbroking and Portfolio
Management)
For the year ended 31st March 2004, the Investec Group had total profit before
tax (before goodwill amortisation and exceptional items) of GBP132.3 million,
assets of GBP15.3 billion and total capital resources of GBP1.3 billion. For
the six months ended 30th September 2004, the Investec Group had total profit
before tax (before goodwill amortisation and exceptional items) of GBP88.7
million, assets of GBP16.5 billion and total capital resources of GBP1.3
billion.
DEFINITIONS
The following definitions apply throughout this announcement unless the context
otherwise requires:
`Acquisition` the proposed acquisition of the entire issued share
capital of Carr Sheppards Crosthwaite pursuant to the
Acquisition Agreement
`Acquisition Agreement` the conditional agreement dated 23 March 2005 between
the Company, CSC Holdings and Investec relating to the
acquisition by Rensburg of the Carr Sheppards
Crosthwaite Shares
`Carr Sheppards
Crosthwaite` or `CSC` Carr Sheppards Crosthwaite Limited (company registered
number 02122340)
`CSC Holdings` Carr Sheppards Crosthwaite (Holdings) Limited the
holding company of Carr Sheppards Crosthwaite
`Carr Sheppards
Crosthwaite Group` Carr Sheppards Crosthwaite and its subsidiaries
`Carr Sheppards` Carr Sheppards Crosthwaite and its subsidiaries
`Carr Sheppards
Crosthwaite Shares` the existing issued and fully paid ordinary shares of
GBP1 each in the share capital of Carr Sheppards
Crosthwaite
the `City Code` The City Code on Takeovers and Mergers
`Completion` completion of the Acquisition
`Consideration Shares` 25.5 million Ordinary Shares to be issued at the
direction of CSC Holdings on Completion
`CSC Holdings` Carr Sheppards Crosthwaite (Holdings) Limited (company
registered number 03258145), the holding company of
Carr Sheppards Crosthwaite
`Directors` or `Board` the existing directors of the Company, whose names
appear in the Listing Particulars
`EBT` the employee benefit trust described in the Listing
Particulars
`Enlarged Group` the Rensburg Group as enlarged following Completion
`Existing Ordinary
Shares` the existing Ordinary Shares in issue
`Extraordinary General the extraordinary general meeting of the Company
Meeting` or `EGM` convened for 12.00 noon on 20 April 2005 by notice set
out in the Listing Particulars or any adjournment of
such meeting
`Fenchurch Advisory
Partners` Fenchurch Advisory Partners Limited
`Forecast` the profit forecast of approximately GBP8.3 million
for
Carr Sheppards Crosthwaite for the year ending 31st
March 2005 stated before exceptional items,
amortisation and taxation, contained in the Listing
Particulars
`FSMA` the Financial Services and Markets Act 2000
`Goldman Sachs` Goldman Sachs International
`Investec` Investec 1 Limited (Company registered number
00119609)
`Investec Group` Investec plc and Investec Limited and their respective
existing subsidiary and associated undertakings
`Investec Limited` Investec Limited, a company incorporated in the
Republic of South Africa whose registered office is at
100 Grayston Drive, Sandton, Republic of South Africa
`Investec plc` Investec plc (Company registered number 03633621)
`LIBOR` London Interbank Offered Rate
`Lock Up and Standstill
Agreement` the conditional agreement dated 23 March 2003 between
Investec, Numis and the Company regarding the holding
of Consideration Shares following Completion and
summarised in the Listing Particulars
`London Stock Exchange` London Stock Exchange plc
`Listing Particulars` the document which comprises listing particulars and a
Class 1 circular for the purposes of the Listing Rules
`Listing Rules` the Listing Rules made by the UKLA pursuant to Part VI
of FSMA
`New Ordinary Shares` the new ordinary shares in the capital of the Company
to be created as a result of the Share Capital
Consolidation
`Numis` Numis Securities Limited
`Ordinary Shares` ordinary shares of 10 pence each in the capital of the
Company
`Proposed Directors` Stephen Elliott, Nicholas Bagshawe, Ian Maxwell Scott,
Stephen Koseff and Bernard Kantor
`Putnam Lovell NBF` Putnam Lovell NBF Securities Inc
`Rensburg` or the
Company` Rensburg plc
`Rensburg Group` Rensburg and its existing subsidiaries and associated
undertakings
`Resolutions` the resolutions set out in the Notice of EGM
`Rothschild` N M Rothschild & Sons Limited
`Shareholder` a holder of Ordinary Shares
`Special Dividend` a cash dividend payable to Shareholders on the Record
Date of 45 p per Ordinary Share
`Subordinated Loan` the subordinated loan facilities in an aggregate
principal amount of GBP60 million to be made available
to the Company pursuant to the terms of the
Subordinated Loan Agreement
`Subordinated
Loan Agreement` the conditional agreement dated 23 March 2005 between
the Company and Investec relating to the provision of
the Subordinated Loan Facilities to the Company by
Investec
`Transitional
Services Agreement` the transitional services agreement dated 23 March
2005 conditional upon Completion, between Investec and
CSC relating to the provision of certain services to
the Enlarged Group by Investec
`UK` United Kingdom
`UKLA` the UK Listing Authority, being the FSA acting as the
competent authority for the purpose of Part VI of FSMA
