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AFB
AFB
Alexander Forbes - Update of Cautionary Announcement and Change of Directorate
Alexander Forbes Limited
(Incorporated in the Republic of South Africa)
(Registration number 1958/001974/06)
Sharecode: AFB
ISIN code: ZAE000018230
("the Company")
Update of Cautionary Announcement and Change of Directorate
Shareholders are referred to the cautionary announcement published on 21 April
2006 and renewed on 25 May 2006 relating to new developments that may have a
material effect on the price of the Company"s securities. The purpose of this
announcement is to provide an update to shareholders on these developments.
Alexander Forbes Limited
The board has received a number of unsolicited approaches from various parties
about the possibility of concluding a transaction with the Company. The board
appointed JP Morgan to advise them in this regard. Following these approaches,
the Company has commenced discussions with private equity parties regarding a
potential transaction to acquire 100% of the Company. The discussions are in an
early stage and may or may not result in a transaction.
International Risk Services ("IRS")
Following a thorough review of the IRS business and material actions taken thus
far, a number of growth and development opportunities have been identified in
the current market. Alexander Forbes recently announced the appointment of Mike
Hammond (former CEO of JLT Risk Solutions) as deputy chairman of IRS.
To optimally position the management team of IRS to capitalise on market
opportunities, Alexander Forbes is currently considering the structural options
to best support this growth. These include the possibility of involving a new
private investor in IRS alongside Alexander Forbes. Discussions are being held
with a few select investors in this regard and, in the event that this option is
pursued, it is likely that Alexander Forbes" shareholding in IRS will reduce.
Change in Directorate
With the majority of the group"s interests being based in South Africa, and the
potential further impact of the transactions contemplated above, it has become
appropriate for the role of Group CEO to again be based in South Africa.
Shareholders are advised that Rael Gordon has, therefore, indicated his
intention to step down from the position of Group Chief Executive. The Board
regrets the loss of Rael in this role, but respects his decision, and is pleased
that he has agreed to remain involved in the international part of the group.
The board is delighted to announce the appointment of Peter Moyo as Group Chief
Executive with effect from 1 July 2006. Peter will continue to be based in
Johannesburg.
The leadership Peter has demonstrated since joining at the end of 2005 has
already made a considerable impact on the group. He enjoys the trust of clients
and the support of staff, and the board is delighted to have an executive of
Peter"s calibre to take over the leadership of the group.
Rael will continue to support Peter in his new role and will remain with the
group primarily focusing on Alexander Forbes" international interests, and with
a specific mandate to progress the initiatives described above with respect to
IRS. Rael has committed to stay until March 2007 and will remain as a director
of Alexander Forbes International and a number of its subsidiaries. In order to
focus fully on the international business, Rael will step down from the board of
the Company as well as the various subsidiary boards in South Africa at the end
of June 2006.
The board would like to express its sincere gratitude to Rael who took over as
Group Chief Executive in 2003 and has made a significant contribution to the
group during his tenure. He has played a key role in the development of
Investment Solutions to a business that now manages in excess of R120 billion in
assets globally; the strengthening of the group"s balance sheet, and in
bolstering the leadership team for the group.
Commenting on the change Group Chairman Paul Heinamann said: "The board is
convinced that it is appropriate for the role of Group Chief Executive to be
based in South Africa. It is largely due to Rael"s foresight and planning that
we have an executive of the calibre of Peter Moyo in the business to take on
leadership of the group. Peter is an exceptionally capable individual, and I
look forward to working closely with him."
"During Rael"s tenure, the group has made significant progress on a number of
fronts, and the group is now well placed, under Peter"s leadership, to move
forward into the future."
Further Cautionary Announcement
As a result of the potential transactions mentioned above, shareholders are
advised to continue to exercise caution when trading in the Company"s securities
until a further announcement is made.
By order of the Board
Sandton
6 June 2006
Sponsor
J.P.Morgan Equities Limited
Investec Securities
Date: 07/06/2006 08:08:53 AM Produced by the JSE SENS Department
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