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LIBERTY GROUP/LIBERTY HOLDINGS/STANBIC - FORMATION OF JOINT VENTURE

Release Date: 10/11/2000 13:38
Code(s): LGL LBH LBHP SBK SBKP
Wrap Text
LIBERTY GROUP LIMITED
(REGISTRATION NUMBER 1957/002788/06)
("LIBERTY GROUP")
LIBERTY HOLDINGS LIMITED
(REGISTRATION NUMBER 1968/002095/06)
("LIBERTY HOLDINGS"1)
STANDARD BANK INVESTMENT CORPORATION
(REGISTRATION NUMBER 1969/0171128/06)
("STANBIC")

FORMATION OF A JOINT VENTURE MULTI-MANAGER ASSET MANAGEMENT COMPANY BY LIBERTY GROUP LIMITED ("LIBERTY GROUP"), STANDARD BANK INVESTMENT CORPORATION LIMITED ("STANBIC") AND INVESTMENT SOLUTIONS HOLDINGS LIMITED ("INVESTMENT SOLUTIONS HOLDINGS").
LIBERTY GROUP AND STANBIC ARE PLEASED TO ANNOUNCE A JOINT VENTURE IN
MULTI-MANAGER ASSET MANAGEMENT WITH INVESTMENT SOLUTIONS HOLDINGS. RATIONALE FOR THE JOINT VENTURE
LIBERTY GROUP AND STANBIC ARE TWO OF SOUTH AFRICA'S LEADING FINANCIAL SERVICES AND BANKING OPERATIONS, WITH BROAD CLIENT BASES AND STRONG BRANDS. INVESTMENT SOLUTIONS HOLDINGS THROUGH ITS WHOLLY-OWNED SUBSIDIARY INVESTMENT SOLUTIONS LIMITED ("INVESTMENT SOLUTIONS"), IS THE SOUTH AFRICAN MARKET LEADER IN MULTI-MANAGER ASSET MANAGEMENT.
THE PARTIES WILL COMBINE THEIR RESPECTIVE AREAS OF SKILL AND EXPERTISE TO OFFER THEIR EXISTING CLIENTS NEW PRODUCTS AND SERVICES, AND TO ATTRACT NEW CLIENTS. KEY FEATURES OF THE JOINT VENTURE
THE JOINT VENTURE SEES THE ESTABLISHMENT OF A JOINT VENTURE COMPANY, WHICH WILL INITIALLY BE OWNED 50% EACH BY LIBERTY GROUP AND STANBIC. INVESTMENT SOLUTIONS WILL PROVIDE MULTI-MANAGER INVESTMENT SERVICES TO THE JOINT VENTURE COMPANY. THE JOINT VENTURE WILL BE FOR AN INITIAL PERIOD TO 31 MARCH 2005, AFTER WHICH INVESTMENT SOLUTIONS HOLDINGS WILL ACQUIRE A SHAREHOLDING OF 40% IN THE JOINT VENTURE COMPANY IN EXCHANGE FOR AN ISSUE OF SHARES BY INVESTMENT SOLUTIONS HOLDINGS TO LIBERTY GROUP AND STANBIC. THE SHARE EXCHANGE WILL BE BASED ON THE RELATIVE SUSTAINABLE PROFITS OF EACH OF INVESTMENT SOLUTIONS HOLDINGS AND THE JOINT VENTURE COMPANY.
THE AGREEMENT LIMITS THE COMBINED POTENTIAL SHAREHOLDING OF LIBERTY GROUP AND STANBIC IN INVESTMENT SOLUTIONS HOLDINGS TO 40% AND THEREFORE, IN CERTAIN CIRCUMSTANCES, A CASH PAYMENT BY INVESTMENT SOLUTIONS HOLDINGS TO LIBERTY GROUP AND STANBIC MAY BE REQUIRED.
THE PROFITS OF THE JOINT VENTURE COMPANY WILL INITIALLY BE SHARED IN PROPORTION TO THE BUSINESS INTRODUCED TO THE JOINT VENTURE COMPANY BY LIBERTY GROUP AND STANBIC, WHILE INVESTMENT SOLUTIONS WILL RECEIVE FEES BASED UPON THE VALUE OF ASSETS UNDER MANAGEMENT.
IN ADDITION, LIBERTY GROUP HAS BEEN GRANTED AN OPTION TO ACQUIRE UP TO 10% OF INVESTMENT SOLUTIONS HOLDINGS BY MARCH 2001 AT A PRICE OF 575 CENTS PER SHARE, SHOULD IT SO CHOOSE. BENEFITS ACCRUING TO THE PARTIES AND CLIENTS
RECOGNISING A TREND TOWARDS INVESTOR CHOICE, WHEREBY INVESTORS MAKE ACTIVE DECISIONS ABOUT THEIR RISK PROFILE AND INVESTMENT ATTITUDES, LIBERTY GROUP AND STANBIC SEE THE JOINT VENTURE COMPANY AS THE VEHICLE TO DELIVER THESE CHOICES TO THEIR CLIENTS. WITH LIBERTY GROUP AND STANBIC'S IN-HOUSE ASSET MANAGERS, LIBERTY ASSET MANAGEMENT AND SCMB ASSET MANAGEMENT, PERFORMING EXCEPTIONALLY WELL, CLIENTS WILL BE ABLE TO CHOOSE BETWEEN TWO ATTRACTIVE OPTIONS: ACTIVE MANAGER AND/OR MULTI-MANAGER INVESTMENTS.
IN ADDITION, LIBERTY COLLECTIVE INVESTMENTS HAS OVER THE PAST YEAR COMMENCED THE DEVELOPMENT OF A MULTI-MANAGER BUSINESS. THE JOINT VENTURE COMPANY WILL PROVIDE AN OPPORTUNITY TO ACCELERATE THIS PROCESS. CONDITIONS PRECEDENT
THE IMPLEMENTATION OF THE JOINT VENTURE COMPANY IS SUBJECT TO, INTER ALIA: * THE OBTAINING OF THE NECESSARY REGULATORY APPROVALS; AND
* THE APPROVAL OF THE SHAREHOLDERS OF INVESTMENT SOLUTIONS HOLDINGS IN GENERAL MEETING. FINANCIAL EFFECTS
THERE WILL BE NO IMMEDIATE IMPACT ON EARNINGS OR NET ASSET VALUE FOR LIBERTY GROUP, LIBERTY HOLDINGS AND STANBIC, BUT THE JOINT VENTURE COMPANY PARTNERS EXPECT SUBSTANTIAL BENEFITS TO ACCRUE TO THEIR RESPECTIVE SHAREHOLDERS OVER TIME. JOHANNESBURG 10 NOVEMBER 2000 MERCHANT BANK STANDARD CORPORATE AND MERCHANT BANK
(A DIVISION OF THE STANDARD BANK OF SOUTH AFRICA LIMITED) (REGISTRATION NUMBER 1962/000738/06) ATTORNEYS WERKSMANS ATTORNEYS

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