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SANLAM - PRESS RELEASE

Release Date: 28/10/1998 13:34
Code(s): SLM
Wrap Text

SANLAM LAUNCHES LARGEST INITIAL PUBLIC OFFERING IN SOUTH AFRICAN MARKET PUBLIC OFFER PRICE RANGE OF 500 CENTS TO 700 CENTS PER SHARE 10 PER CENT DISCOUNT FOR POLICYHOLDERS INTRODUCTION
FOLLOWING THE APPROVAL OF SANLAM'S DEMUTUALISATION PROPOSAL BY ITS
POLICYHOLDERS AND CONFIRMATION OF THE CONVERSION SCHEME BY THE HIGH COURT, SANLAM HAS NOW CONVERTED INTO A SHAREHOLDER-OWNED COMPANY CALLED SANLAM LIFE INSURANCE LIMITED, WHICH IS WHOLLY OWNED BY THE NEW HOLDING COMPANY, SANLAM LIMITED.
UNDER THE DEMUTUALISATION PROPOSAL, THE SANLAM GROUP IS ALSO UNDERTAKING A CORPORATE RESTRUCTURING TO FURTHER ITS TRANSFORMATION INTO A BROADLY BASED FINANCIAL SERVICES GROUP. THIS RESTRUCTURING WILL BE FUNDED THROUGH THE OFFER FOR SALE OF FURTHER SHARES IN SANLAM LIMITED TO RAISE UP TO R4 BILLION OF NEW CAPITAL.
IT IS SANLAM'S INTENTION TO LIST THESE SHARES, TOGETHER WITH THE FREE SHARES, ON THE JOHANNESBURG AND NAMIBIAN STOCK EXCHANGES ON MONDAY, 30 NOVEMBER 1998. DESCRIPTION OF THE OFFER
THE OFFER COMPRISES A POLICYHOLDERS' OFFER AND A PUBLIC OFFER TO CERTAIN INSTITUTIONS IN SOUTH AFRICA AND ELSEWHERE, AND TO RETAIL INVESTORS, CLIENTS AND EMPLOYEES OF THE SANLAM GROUP IN SOUTH AFRICA AND NAMIBIA. THE PUBLIC OFFER PRICE RANGE IS 500 CENTS TO 700 CENTS PER SHARE.
THE POLICYHOLDERS' OFFER WILL BE AT A 10 PER CENT DISCOUNT TO THE PUBLIC OFFER PRICE, OPEN TO QUALIFYING POLICYHOLDERS IN SOUTH AFRICA AND NAMIBIA.
QUALIFYING POLICYHOLDERS WILL SHORTLY RECEIVE INFORMATION IN THE POST CONTAINING DETAILS OF THIS OFFER.
ALL SHARES TO BE ISSUED BY SANLAM LIMITED, WHETHER FREE SHARES OR SHARES OFFERED UNDER THE OFFERS, WILL HAVE THE SAME RIGHTS AND RANK EQUALLY IN ALL RESPECTS. POLICYHOLDERS' OFFER
THE POLICYHOLDERS' OFFER IS OPEN TO ALL POLICYHOLDERS RECEIVING FREE SHARES AS WELL AS SOUTH AFRICAN OR NAMIBIAN POLICYHOLDERS AT 30 SEPTEMBER 1998
(QUALIFYING POLICYHOLDERS). THE POLICYHOLDERS' OFFER PRICE WILL BE AT A 10 PER CENT DISCOUNT TO THE PUBLIC OFFER PRICE AND IS IN THE RANGE OF 450 CENTS TO 630 CENTS PER SHARE.* - ALLOCATION OF SHARES TO THE POLICYHOLDERS' OFFER
SHARES WITH AN AGGREGATE VALUE OF R500 MILLION AT THE POLICYHOLDERS' OFFER PRICE HAVE BEEN RESERVED TO MEET APPLICATIONS FROM QUALIFYING POLICYHOLDERS UNDER THE POLICYHOLDERS' OFFER. THIS AMOUNT MAY BE INCREASED UP TO R1 BILLION BY CLAWBACK FROM THE PUBLIC OFFER IN THE EVENT OF STRONG DEMAND FROM QUALIFYING POLICYHOLDERS. - APPLICATIONS UNDER THE POLICYHOLDERS' OFFER
QUALIFYING POLICYHOLDERS MAY APPLY FOR SHARES IN THE POLICYHOLDERS' OFFER FOR A MINIMUM AMOUNT OF R1 000 AND A MAXIMUM AMOUNT OF R100 000. THOSE WHO WISH TO INVEST OVER R100 000 WILL NEED TO APPLY FOR SHARES OVER THIS AMOUNT IN THE PREFERENTIAL RETAIL OFFER. SHARES PURCHASED AS PART OF THE PREFERENTIAL RETAIL OFFER WILL NOT BE AVAILABLE AT A DISCOUNT.
QUALIFYING POLICYHOLDERS SHOULD SHORTLY RECEIVE INFORMATION AND APPLICATION FORMS. APPLICATIONS MUST BE RECEIVED NO LATER THAN 4.00 PM ON MONDAY, 23 NOVEMBER 1998. APPLICATIONS SHOULD BE BASED ON THE MAXIMUM AMOUNT IN RAND POLICYHOLDERS WISH TO INVEST IN SANLAM SHARES RATHER THAN ON A NUMBER OF SHARES. THE POLICYHOLDERS' OFFER PRICE WILL BE ANNOUNCED AFTER THE CLOSE OF THE OFFER AND WILL BE USED TO DETERMINE HOW MANY SHARES EACH SUCCESSFUL APPLICANT RECEIVES.
* AT THE MID-RANGE PUBLIC OFFER PRICE OF 600 CENTS PER SHARE, EQUIVALENT TO A MID-RANGE POLICYHOLDERS' OFFER PRICE OF 540 CENTS PER SHARE, A POLICYHOLDER WHO APPLIED FOR R1 000 OF SHARES WOULD RECEIVE 185 SHARES IF HIS/HER APPLICATION WAS MET IN FULL. PUBLIC OFFER
THE PUBLIC OFFER IS COMPRISED OF AN INSTITUTIONAL OFFER, RETAIL OFFER, PREFERENTIAL RETAIL OFFER AND EMPLOYEES' OFFER. THE PUBLIC OFFER PRICE RANGE IS 500 CENTS TO 700 CENTS PER SHARE, BUT MAY FALL BELOW THIS RANGE. THE TOTAL VALUE OF THE PUBLIC OFFER IS EXPECTED TO BE R2,5 BILLION TO R3,5 BILLION, SUBJECT TO A CLAWBACK OF UP TO R500 MILLION IN FAVOUR OF THE POLICYHOLDERS' OFFER.
- RETAIL OFFER, PREFERENTIAL RETAIL OFFER AND EMPLOYEES' OFFER
INVESTORS WHO WISH TO APPLY IN THE RETAIL OFFER OR PREFERENTIAL RETAIL OFFER SHOULD OBTAIN A PROSPECTUS AND APPLICATION FORM FROM ANY SANLAM BRANCH OR CALL THE DEMUTUALISATION HELPLINE. THE MINIMUM APPLICATION AMOUNT FOR EACH OF THESE OFFERS IS R1 000.
IT IS INTENDED THAT CERTAIN CLIENTS OF THE SANLAM GROUP AND QUALIFYING EMPLOYEES SUBMITTING VALID APPLICATIONS UNDER THE PREFERENTIAL RETAIL OFFER AND THE EMPLOYEES' OFFER WILL EACH RECEIVE PREFERENCE IN ALLOCATION OVER INVESTORS IN THE RETAIL OFFER IN THE EVENT OF HEAVY DEMAND FOR SHARES. - INSTITUTIONAL OFFER
PROSPECTIVE INSTITUTIONAL INVESTORS WHO WISH TO PARTICIPATE IN THE
INSTITUTIONAL OFFER WILL BE ASKED TO INDICATE THE NUMBER OF SHARES THEY ARE PREPARED TO ACQUIRE AT A PRICE SPECIFIED BY EACH OF THEM. THIS IS KNOWN AS A BOOK-BUILDING PROCESS. BIDS FROM INSTITUTIONAL INVESTORS IN THE INSTITUTIONAL OFFER WILL NEED TO BE SUBMITTED BY NO LATER THAN 5.00 PM ON FRIDAY, 27 NOVEMBER 1998. USE OF OFFER PROCEEDS
THE OFFERS ARE BEING UNDERTAKEN TO RAISE CAPITAL FOR SANLAM LIMITED AND TO REALISE PROCEEDS FROM THE OFFER OF CERTAIN FREE SHARES. THE NEW CAPITAL WILL BE USED BY SANLAM LIMITED IN PART TO FUND THE CORPORATE RESTRUCTURING OF SANLAM, INCLUDING THE PARTIAL TRANSFER OF STRATEGIC NON-LIFE ASSETS AND OPERATING SUBSIDIARIES FROM SANLAM LIFE TO THE GROUP HOLDING COMPANY, SANLAM LIMITED AND TO PAY FOR THE EXPENSES OF THE DEMUTUALISATION PROPOSAL, ESTIMATED TO BE APPROXIMATELY R550 MILLION.
AS THE PURCHASE PRICE PAYABLE BY SANLAM LIMITED IN CONNECTION WITH THE RESTRUCTURING IS DETERMINED BY A FORMULA BENCHMARKED IN PART TO THE MARKET PRICE OF CERTAIN LISTED SECURITIES AT THE TIME OF LISTING, IT IS NOT POSSIBLE TO SPECIFY THE AMOUNT OF THE PURCHASE PRICE AT THIS TIME. HOWEVER, BASED ON THE MARKET PRICE OF SHARES IN GENSEC AND SANTAM AND THE NET ASSET VALUE OF THE OPERATING SUBSIDIARIES AT 30 SEPTEMBER 1998, THE PURCHASE PRICE PAYABLE BY SANLAM LIMITED IN CONNECTION WITH THE RESTRUCTURING WOULD BE APPROXIMATELY R2 BILLION.
SANLAM LIFE WILL USE THE AMOUNT IT RECEIVES FROM SANLAM LIMITED IN SETTLEMENT OF ALL OR PART OF THE PURCHASE PRICE OF THE TRANSFERRED COMPANIES TO DIVERSIFY ITS INVESTMENTS, THEREBY INCREASING POLICYHOLDER SECURITY. IF THE AMOUNT OF CAPITAL RAISED EXCEEDS THE PURCHASE PRICE PAYABLE IN CONNECTION WITH THE CORPORATE RESTRUCTURING, THE EXCESS WILL BE USED BY SANLAM LIMITED FOR GENERAL CORPORATE PURPOSES.
THE OFFER ALSO COMPRISES 57 MILLION FREE SHARES, TO BE OFFERED FOR SALE IN THE INSTITUTIONAL OFFER. THE PROCEEDS FROM THE SALE OF THESE SHARES WILL BE USED TO FUND PAYMENTS TO ELIGIBLE POLICYHOLDERS WITH ADDRESSES OUTSIDE SOUTH AFRICA AND NAMIBIA WHO WILL RECEIVE CASH IN LIEU OF THEIR FREE SHARE ALLOCATION, PAYMENT OF THE DEMUTUALISATION LEVY AND ANY SIMILAR LEVY THAT MIGHT BE INTRODUCED IN NAMIBIA, AND TAX PAYABLE WITH RESPECT TO FREE SHARES ALLOCATED TO ELIGIBLE EMPLOYEES UNDER THE DEMUTUALISATION PROPOSAL. THE ACTUAL NUMBER OF FREE SHARES RECEIVED BY ELIGIBLE EMPLOYEES WILL BE REDUCED TO MAKE PROVISION FOR ANY TAX PAYABLE. PRICING AND ALLOCATION
THE PUBLIC OFFER PRICE WILL BE ANNOUNCED ON 30 NOVEMBER 1998 AND IS EXPECTED TO BE IN THE RANGE OF 500 CENTS TO 700 CENTS PER SHARE.
THE FACTORS WHICH WILL BE CONSIDERED IN DETERMINING THE ACTUAL PUBLIC OFFER PRICE WILL INCLUDE: THE PREVAILING MARKET CONDITIONS, THE DEMAND FOR SHARES IN THE OFFERS, THE PRICES AT WHICH INSTITUTIONS ARE PREPARED TO ACQUIRE SHARES UNDER THE INSTITUTIONAL OFFER AND THE DESIRE TO ESTABLISH AN ORDERLY
AFTER-MARKET IN THE SHARES. ACCORDINGLY, THE PUBLIC OFFER PRICE MAY FALL BELOW THE RANGE GIVEN. THE BASES OF ALLOCATION IN ALL THE OFFERS WILL ALSO BE ANNOUNCED ON 30 NOVEMBER 1998. IN THE EVENT OF OVER-SUBSCRIPTION APPLICANTS IN THE OFFERS MAY NOT RECEIVE SHARES TO THE FULL VALUE OF THEIR APPLICATION. ALL ALLOCATIONS WILL BE ROUNDED DOWN TO THE NEAREST WHOLE NUMBER OF SHARES. DESPATCH OF SANLAM SHARE ACCOUNT STATEMENTS AND SHARE CERTIFICATES
APPLICANTS IN THE OFFERS SHOULD NOTE THAT DEALINGS IN THE SHARES WILL COMMENCE ON THE JSE PRIOR TO THE DESPATCH OF SHARE CERTIFICATES OR SHARE ACCOUNT STATEMENTS, AS THE CASE MAY BE, ON 7 DECEMBER 1998. APPLICANTS WILL ONLY BE INFORMED OF THEIR INDIVIDUAL ALLOCATIONS UPON RECEIPT OF THEIR SHARE
CERTIFICATES OR SHARE ACCOUNT STATEMENTS. ACCORDINGLY, APPLICANTS WHO DEAL PRIOR TO THE RECEIPT OF THEIR SHARE CERTIFICATES OR SHARE ACCOUNT STATEMENTS DO SO AT THE RISK OF SELLING SHARES FOR WHICH THEY HAVE NOT RECEIVED AN
ALLOCATION. TEMPORARY DOCUMENTS OF TITLE WILL NOT BE ISSUED. DIVIDEND POLICY
THE BOARD PROPOSES TO DECLARE DIVIDENDS ANNUALLY AFTER TAKING INTO ACCOUNT THE FINANCIAL RESULTS FOR THE FINANCIAL YEAR. IT IS INTENDED THAT, INITIALLY, A TWO TO THREE TIMES DIVIDEND COVER BASED ON HEADLINE EARNINGS WILL BE
ESTABLISHED. THE OBJECTIVE OF THE BOARD IS TO ACHIEVE STABLE GROWTH IN DIVIDEND PAYMENTS AND THE DIVIDEND PATTERN WILL THEREFORE NOT STRICTLY FOLLOW THE EARNINGS PATTERN. A ONE-OFF INTERIM DIVIDEND FOR THE SIX MONTHS ENDED 30 JUNE 1999 MAY BE DECLARED. OVER-ALLOTMENT AND STABILISATION
IN CONNECTION WITH THE PUBLIC OFFER, THE GLOBAL CO-ORDINATORS MAY, FOR A PERIOD OF 30 DAYS FOLLOWING ANNOUNCEMENT OF THE PUBLIC OFFER PRICE, OVER-ALLOT SHARES AND FLEMINGS MAY EFFECT TRANSACTIONS TO STABILISE OR MAINTAIN THE MARKET PRICE OF THE SHARES AT A LEVEL WHICH MIGHT NOT OTHERWISE PREVAIL IN THE OPEN MARKET. AS THE JSE AND THE NSX DO NOT PERMIT PRICE STABILISATION TRANSACTIONS, FLEMINGS WILL EFFECT ANY TRANSACTIONS USING A QUOTE ON SEAQI, IN ACCORDANCE WITH THE RELEVANT REGULATIONS. SUCH STABILISING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. SAVE AS REQUIRED UNDER APPLICABLE LAW AND REGULATIONS, FLEMINGS DOES NOT INTEND TO DISCLOSE THE EXTENT OF ANY STABILISING TRANSACTIONS OR THE AMOUNT OF ANY LONG OR SHORT POSITIONS.
FOR THE PURPOSES, INTER ALIA, OF MEETING OVER-ALLOTMENTS IN CONNECTION WITH THE PUBLIC OFFER AND TO COVER SHORT POSITIONS RESULTING FROM STABILISING
TRANSACTIONS, SANLAM LIMITED HAS GRANTED THE GLOBAL CO-ORDINATORS THE
OVER-ALLOTMENT OPTIONS, EXERCISABLE FOR 30 DAYS FOLLOWING THE ANNOUNCEMENT OF THE PUBLIC OFFER PRICE, TO SUBSCRIBE OR PROCURE SUBSCRIBERS FOR ADDITIONAL SHARES EQUAL TO 15 PERCENT OF THE AGGREGATE NUMBER OF SHARES OFFERED UNDER THE OFFERS AT THE PUBLIC OFFER PRICE. GENSEC SUBSCRIPTION AGREEMENT
SANLAM LIMITED HAS UNDERTAKEN TO ISSUE TO GENSEC, AND GENSEC HAS UNDERTAKEN TO SUBSCRIBE FOR, UP TO 150 MILLION SHARES, ON BEHALF OF ITS MANAGED FUNDS, AT THE PUBLIC OFFER PRICE ON 28 DECEMBER 1998 (THE "ISSUE DATE"). GENSEC IS NOT RESTRICTED FROM DEALING IN SHARES AND, IN PARTICULAR, FROM BUYING SHARES AT OR ABOVE OR BELOW THE PUBLIC OFFER PRICE, IN THE PERIOD PRIOR TO THE ISSUE DATE. THE NUMBER OF SHARES TO BE ISSUED BY SANLAM LIMITED TO GENSEC ON THE ISSUE DATE WILL BE REDUCED BY THE NUMBER OF SHARES ACQUIRED BY GENSEC IN THE OPEN MARKET AT A PRICE BELOW (BUT NOT AT OR ABOVE) THE PUBLIC OFFER PRICE. FURTHER DETAILS OF THE GENSEC SUBSCRIPTION AGREEMENT ARE SET OUT UNDER "MATERIAL CONTRACTS" IN THE PROSPECTUS. EXPECTED TIMETABLE OF EVENTS
THE DATES AND TIMES SPECIFIED IN THE TIMETABLE BELOW MAY CHANGE. ANY SUCH CHANGE WILL BE ANNOUNCED IN THE PRESS.
EVENT TIME AND DATE
OPENING DATE OF THE OFFERS 9.00 AM ON WEDNESDAY, 28 OCTOBER 1998 CLOSE OF POLICYHOLDERS' OFFER, PREFERENTIAL RETAIL OFFER,
RETAIL OFFER AND EMPLOYEES OFFER 4.00 PM ON MONDAY, 23 NOVEMBER 1998 CLOSING DATE OF INSTITUTIONAL OFFER 5.00 PM ON FRIDAY, 27 NOVEMBER 1998 ANNOUNCEMENT OF PUBLIC OFFER PRICE, POLICYHOLDERS' OFFER PRICE
AND BASES OF ALLOCATION MONDAY, 30 NOVEMBER 1998
PROPOSED LISTING DATE MONDAY, 30 NOVEMBER 1998 PROPOSED DATE FOR DESPATCH OF SHARE CERTIFICATES OR SHARE
ACCOUNT STATEMENTS MONDAY, 7 DECEMBER 1998
GLOBAL CO-ORDINATORS, FINANCIAL ADVISERS AND SYNDICATE MEMBERS
GLOBAL CO-ORDINATORS ROBERT FLEMING & CO. LIMITED
DRESDNER KLEINWORT BENSON CAZENOVE & CO.
FINANCIAL ADVISERS DRESDNER KLEINWORT BENSON
ROBERT FLEMING & CO. LIMITED DOMESTIC OFFERING FLEMING MARTIN
- INSTITUTIONAL OFFER DEUTSCHE MORGAN GRENFELL (PTY) LIMITED WARBURG DILLON READ
ABN AMRO SECURITIES (SOUTH AFRICA) (PTY) LIMITED CAZENOVE SOUTH AFRICA (PTY) LIMITED
BARNARD JACOBS MELLET & CO (PTY) LIMITED
REAL AFRICA DUROLINK SECURITIES LIMITED
SG FRANKEL POLLAK SECURITIES (PTY) LIMITED - RETAIL OFFER ABN AMRO SECURITIES (SOUTH AFRICA) (PTY) LIMITED BARNARD JACOBS MELLET & CO (PTY) LIMITED
REAL AFRICA DUROLINK SECURITIES LIMITED
SG FRANKEL POLLAK SECURITIES (PTY) LIMITED INTERNATIONAL OFFERING DRESDNER KLEINWORT BENSON
ROBERT FLEMING & CO. LIMITED CAZENOVE & CO. DEUTSCHE BANK WARBURG DILLON READ ABN AMRO ROTHSCHILD
BARNARD JACOBS MELLET & CO (PTY) LIMITED
REAL AFRICA DUROLINK SECURITIES LIMITED NOMURA INTERNATIONAL SG INVESTMENT BANKING
THIS ANNOUNCEMENT DOES NOT FORM PART OF ANY OFFER TO BUY OR SUBSCRIBE FOR ANY SECURITIES. ANY DECISION ON BUYING SANLAM SHARES SHOULD BE MADE ONLY ON THE BASIS OF INFORMATION CONTAINED IN THE SANLAM PROSPECTUS. IN CONNECTION WITH THE OFFER TO RAISE CAPITAL AND FOR A LIMITED PERIOD AFTER LISTING, TRANSACTIONS WHICH STABILISE OR MAINTAIN THE MARKET PRICE OF SANLAM SHARES AT A LEVEL WHICH MIGHT NOT OTHERWISE PREVAIL IN THE OPEN MARKET MAY BE UNDERTAKEN BY SANLAM'S FINANCIAL ADVISERS USING A QUOTE ON A FOREIGN EXCHANGE IN ACCORDANCE WITH THE RELEVANT REGULATIONS.
THIS ANNOUNCEMENT IS NOT AN OFFER OF SECURITIES FOR SALE INTO THE UNITED STATES. THE SANLAM SHARES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES UNLESS THEY ARE REGISTERED OR EXEMPT FROM REGISTRATION. THERE WILL BE NO PUBLIC OFFERING OF THE SANLAM SHARES IN THE UNITED STATES. ENDS.

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