Absa acquisition announcement
Absa announced that Absa Bank, a wholly-owned subsidiary of Absa Group, has entered into an agreement with Edcon to acquire the accounts and receivables relating to the private label store cards of Edcon in South Africa (the "card portfolio") (the "aquisition").
Absa Bank and Edcon have further agreed to enter into a long-term, strategic relationship under which Absa Bank will provide retail credit to Edcon customers and Edcon will be responsible for all customer facing activities (the "Program"). Absa Bank will acquire the Card Portfolio for a cash consideration equal to the net book value of the Card Portfolio receivables at the effective date of the Acquisition. Absa Bank and Edcon expect the purchase price of the Card Portfolio to be approximately R10 billion. The transaction is expected to close during the second half of 2012.
Conditions precedent to the Acquisition and the Program
The Acquisition and the Program are subject to a number of conditions precedent customary for a transaction of this nature, which include, but are not limited to, the following:
* the obtaining of regulatory approval for the Acquisition and/or the Program, as required; and
* the release of security interests over the Card Portfolio assets under Edcon's various existing notes and funding structures.
Absa shareholders will be advised by way of a SENS announcement when all the conditions precedent have been fulfilled and the transaction becomes effective.