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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.