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SBK - Standard Bank - Acquisition Of A Controlling Interest In IBTC
Chartered Bank Plc
Standard Bank Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1969/017128/06)
South African Share Code: SBK
Namibian Share Code: SNB
ISIN: ZAE000057378
("Standard Bank")
ACQUISITION OF A CONTROLLING INTEREST IN IBTC CHARTERED BANK PLC
1. INTRODUCTION
Shareholders are referred to the announcement on the JSE Limited`s
Securities Exchange News Service dated 16 July 2007, in which Standard Bank
announced that it had received the necessary in-principle approvals from
the South African Reserve Bank, The Nigerian Stock Exchange ("NSE"), the
Nigerian Securities and Exchange Commission ("SEC"), the Central Bank of
Nigeria ("CBN") and the Federal High Court of Nigeria to proceed with the
proposed acquisition of a minimum 50.1% shareholding in IBTC Chartered Bank
Plc ("IBTC")("the proposed transaction").
In terms of the proposed transaction, Standard Bank, through its wholly-
owned subsidiary Stanbic Africa Holdings Limited ("SAHL"), was to merge
Stanbic Bank (Nigeria) Limited ("Stanbic Nigeria"), with the operations of
IBTC ("the enlarged IBTC") ("the proposed scheme of merger") in exchange
for 6.25 billion IBTC shares (equivalent to a 33.33% interest in the
enlarged IBTC). Simultaneous with the proposed scheme of merger, SAHL made
a tender offer to all IBTC shareholders to acquire a minimum of 3.14375
billion IBTC shares at a tender offer consideration of Naira16.00 per IBTC
share ("the tender offer").
Standard Bank is pleased to announce that at a meeting of IBTC shareholders
held on Monday, 20 August 2007, the requisite majority of at least 75% of
IBTC shareholders present and voting, voted in favour of the proposed
scheme of merger.
In terms of the tender offer, which closed on Monday, 20 August 2007, SAHL
has received notification from IBTC`s Company Secretary that it has
received unconditional and valid acceptances in respect of sufficient IBTC
shares to ensure SAHL achieves a minimum 50.1% shareholding in the enlarged
IBTC. As such, the tender offer has been declared unconditional as to
acceptances. The aggregate tender offer consideration amounting to
approximately R2.95 billion (approximately US$400 million) will be paid to
those IBTC shareholders who tendered their shares by no later than Monday,
27 August 2007. After the implementation of the proposed scheme of merger,
Standard Bank`s shareholding in the enlarged IBTC will be approximately
50.1%.
2. FINANCIAL EFFECTS ON STANDARD BANK SHAREHOLDERS
The unaudited pro forma financial effects set out below have been prepared
based on IFRS reporting, to assist Standard Bank shareholders to assess the
impact of the proposed transaction. Because of the nature of this
information, it may not fairly present Standard Bank`s financial position
or results of operations. The unaudited financial effects do not
constitute a representation of the future financial position of Standard
Bank on implementation of the proposed transaction or its future earnings.
The material assumptions are set out in the notes following the table.
These financial effects are the responsibility of the Board of Directors of
Standard Bank and are provided for illustrative purposes only.
Before the After the proposed Change
proposed transaction (%)
transaction (cents)
(cents)(1)
Earnings per share ("EPS") 517 515 (0.4%)
(2)
Headline EPS ("HEPS") (2) 483 481 (0.4%)
Diluted EPS ("DEPS") (2) 486 484 (0.4%)
Diluted HEPS ("DHEPS") (2) 454 452 (0.4%)
Net asset value ("NAV") per 3 884 3 884 -
share (3)
Tangible NAV ("TNAV") per 3 673 3 452 (6.0%)
share (3)
Notes and assumptions:
1. Extracted or calculated from the unaudited consolidated results of
Standard Bank for the six months ended 30 June 2007.
2. For the purposes of the calculation of the EPS, HEPS, DEPS and DHEPS it
was assumed that:
- the proposed transaction became effective on 1 January 2007;
- the earnings and headline earnings of IBTC for the year ended
31 March 2007 were extracted from IBTC`s unaudited management accounts for
the year ended 31 March 2007 as detailed in the "Scheme of merger and
Tender Offer document" despatched to IBTC shareholders on or about 20 July
2007 ("the scheme document") and a pro rata portion of these earnings were
included in the calculation;
- the earnings of IBTC were converted at Naira17.84/Rand, being the average
Naira/Rand cross-rate for the six months ended 30 June 2007;
- the cash used to acquire the shares in IBTC in terms of the tender offer
earned a pre-tax return of 6% per annum;
- transaction costs amounting to R59 million have been capitalised as part
of the tender offer consideration; and
- Standard Bank had a weighted average of 1 228.666 million shares in issue
(in terms of IFRS) for the six months ended 30 June 2007.
3. For the purposes of the calculation of the NAV and TNAV per share it was
assumed that:
- the proposed transaction became effective on 30 June 2007;
- the balance sheet information of IBTC was extracted from IBTC`s unaudited
management accounts for the year ended 31 March 2007 as detailed in the
scheme document;
- IBTC`s balance sheet was converted at Naira17.04/Rand, being the current
Naira/Rand cross-rate;
- Standard Bank had 1 232.409 million shares in issue (in terms of IFRS) as
at 30 June 2007;
- the tender offer consideration, amounting to Naira50.30 billion
(equivalent to R2.95 billion, assuming an exchange rate of Naira17.04/Rand,
the exchange rate on 20 August 2007), was paid on 30 June 2007; and
- transaction costs amounting to R59 million have been capitalised as part
of the tender offer consideration.
3. RATIONALE FOR THE ACQUISITION
Although Standard Bank has a presence in Nigeria through Stanbic Nigeria,
the proposed transaction is expected to create one of the leading banks in
Nigeria with a significant asset base offering an extensive range of
financial services and products.
4. IBTC - NATURE OF BUSINESS
IBTC was incorporated in February 1989 as Investment Banking & Trust
Company Limited, became a public company in February 2005 and was listed on
the NSE on 25 April 2005. The bank adopted its current name following a
December 2005 merger with Chartered Bank Plc ("Chartered Bank") and Regent
Bank Plc ("Regent Bank"), which brought together IBTC`s corporate and
investment banking and wealth creation capabilities and the retail and
commercial banking business and branch network of Chartered Bank and Regent
Bank.
IBTC is listed on the NSE with total assets of approximately
Naira153 billion (US$1.2 billion) and a market capitalisation of
approximately Naira137.5 billion (US$1.0 billion).
IBTC is a universal bank providing corporate and investment banking, asset
management, private banking and comprehensive retail banking services with
a presence in all the major commercial centres in the country. IBTC has
established itself as one of Nigeria`s pre-eminent investment banking
institutions. IBTC is one of the 10 settlement banks in Nigeria and is a
primary dealer/market maker for Federal Government of Nigeria bonds and
money market instruments.
IBTC operates from a network of 56 branches and has approximately 750
employees. The bank was founded by its Chief Executive Officer, Mr Atedo
N.A. Peterside (OON).
5. APPROVALS AND TIMING
The proposed transaction remains conditional upon:
- final CBN and SEC approval of the proposed scheme of merger; and
- the Federal High Court of Nigeria sanctioning the proposed scheme of
merger.
The above formal processes in terms of Nigerian law are expected to be
completed by 17 September 2007.
Standard Bank Centre
Johannesburg
21 August 2007
Investment bank and sponsor
Standard Bank
Enquiries
Kim Howard Tel: +(27) 11 636 7811
Director:Investor Relations
Simon Ridley Tel: +(27) 11 636 3756
Group Financial Director
Date: 21/08/2007 17:00:14 Supplied by www.sharenet.co.za
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