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MAF - Mutual & Federal - Share exchange ratio and financial effects regarding
the firm intention by Old Mutual Plc to make an offer to Mutual & Federal
shareholders
MUTUAL & FEDERAL INSURANCE COMPANY LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1970/006619/06
Share code JSE: MAF NSX: MTF ISIN: ZAE000010823
("Mutual & Federal")
NOTIFICATION OF SHARE EXCHANGE RATIO AND FINANCIAL EFFECTS IN RELATION TO THE
FIRM INTENTION BY OLD MUTUAL PLC ("OLD MUTUAL") TO MAKE AN OFFER TO ACQUIRE
THOSE MUTUAL & FEDERAL ORDINARY SHARES NOT CURRENTLY BENEFICIALLY OWNED BY
OLD MUTUAL AND/OR ITS SUBSIDIARIES ("OLD MUTUAL GROUP") ("THE OFFER")
1. Introduction
Mutual & Federal shareholders are referred to the announcement released
on SENS on 14 October 2009 ("Firm Intention Announcement"), wherein
Mutual & Federal shareholders were advised that Old Mutual, which
currently holds, directly and indirectly, approximately 73.5% of Mutual
& Federal ordinary shares, had submitted to the board of directors of
Mutual & Federal ("the Board") a notice of its firm intention to make an
offer to the Mutual & Federal shareholders to acquire the remaining
shares in Mutual & Federal`s ordinary share capital not currently
beneficially owned by the Old Mutual Group, by way of a scheme of
arrangement in terms of section 311 of the Companies Act, 61 of 1973, as
amended (the "Scheme"). Shareholders are further referred to the
announcement released on SENS on 19 October 2009 which advised
shareholders of the Board`s support for the Scheme.
2. Share exchange ratio
The Offer has been based on an offer price of R21.25 per Mutual &
Federal ordinary share ("Take-Out Price"), to be settled by way of an
issue of new Old Mutual ordinary shares ("Scheme Consideration"). The
Firm Intention Announcement further advised that the number of new Old
Mutual ordinary shares which will constitute the Scheme Consideration
will be based on the Take-Out Price and the 30-day volume weighted
average price ("VWAP") of Old Mutual`s ordinary shares traded on the JSE
Limited ("JSE"), up to the last practicable date ("Last Practicable
Date") prior to the printing of the Scheme circular convening the Scheme
meeting ("the Scheme Circular") that is to be posted to Mutual & Federal
shareholders in due course.
Based on the Take-Out Price of R21.25 per Mutual & Federal ordinary
share and the 30-day VWAP of Old Mutual ordinary shares as at the close
of business on Wednesday, 21 October 2009 (being the Last Practicable
Date), of R12.29 per Old Mutual ordinary share, the Scheme Consideration
translates into a share exchange ratio of 1.73 Old Mutual ordinary
shares per Mutual & Federal ordinary share. A table of entitlements will
be included in the Scheme Circular showing entitlements for portions of
shareholding held by Mutual & Federal shareholders of less than 100
shares.
3. Financial effects of the Offer
The unaudited pro forma financial effects of the Offer set out below are
based on the reviewed interim results of Old Mutual and Mutual & Federal
for the six month period ended 30 June 2009. These effects are the
responsibility of the Board and are given for illustrative purposes only
and because of their pro forma nature, may not give a fair reflection of
a Mutual & Federal shareholder`s position after the implementation of
the Offer.
GBP R
Note Before After % Before After % Change
Change
Market value
(pence/cents
per share) 1 1,775 2,125 19.7%
30-day VWAP
(pence/cents
per share) 1 1,754 2,125 21.2%
EPS
(pence/cents
per share) 2 3.57 -2.69 n/a 49 -37 n/a
HEPS
(pence/cents
per share) 2 3.49 2.33 -33.2% 48 32 -33.3%
NAV
(pence/cents
per share) 3 89.83 248.60 176.7% 1,144 3,166 176.7%
NTAV
(pence/cents
per share) 3 82.29 76.32 -7.3% 1,048 972 -7.3%
Notes
1. The "Before" Column sets out the market price, which is based on
Mutual & Federal`s closing price on Tuesday, 13 October 2009, and
the 30-day VWAP up to and including Tuesday, 13 October 2009, being
the date immediately preceding the firm intention announcement.
The "After" column sets out the pro forma market value based on the
Take-Out Price.
2. The "Before" column sets out Mutual & Federal`s earnings per share
("EPS") and headline earnings per share ("HEPS") for the six months
ended 30 June 2009. The "After" column sets out the pro forma EPS
and HEPS per 1.73 Old Mutual shares for each Mutual & Federal share
held, based on the assumption that the share exchange was in effect
from 1 January 2009 and the Old Mutual results incorporate the
earnings of Mutual & Federal for the six months ended 30 June 2009
and based on an assumed total weighted average number of 5 423
million Old Mutual shares in issue.
3. The "Before" column sets out the net asset value ("NAV") and
tangible net asset value ("TNAV") per Mutual & Federal share as at
30 June 2009. The "After" column sets out the pro forma NAV and
TNAV based on 1.73 Old Mutual shares per Mutual & Federal share
held, adjusted for the share exchange, on the assumption that the
Offer became effective on 30 June 2009.
4. The above financial effects have been based on an exchange rate of
1 UK Pound = 13.7363 SA Rands for the calculation of EPS and HEPS
and of 1 UK Pound = 12.7351 SA Rands for the calculation of NAV and
TNAV.
4. Further announcement and documentation
The Scheme Circular containing details of the Offer and the Scheme will
be posted to Mutual & Federal shareholders in due course.
A further announcement setting out the salient dates of the Scheme will
also be released on SENS and published in the press in due course.
Johannesburg
22 October 2009
Investment bank, transaction advisor Corporate law advisors
and transaction sponsor
(logo) (logo)
Nedbank Capital, a division of Nedbank Edward Nathan Sonnenbergs
Limited
Date: 22/10/2009 15:00:01 Supplied by www.sharenet.co.za
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