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VKE / SLM - Vukile / Sanlam - Update On The Proposed Acquisition By Vukile

Release Date: 29/10/2009 14:00
Code(s): SLM VKE
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VKE / SLM - Vukile / Sanlam - Update On The Proposed Acquisition By Vukile Vukile Property Fund Limited Sanlam Limited (Incorporated in the Republic (Incorporated in the of South Africa) Republic of South Africa) (Registration number 2002/027194/06) (Registration number 1959/001562/06) JSE code: VKE NSX code: VKN JSE code: SLM NSX code: SLA ISIN: ZAE000056370 ISIN: ZAE000070660 ("Vukile") ("Sanlam") Update on the proposed acquisition by Vukile of the property asset management business of Sanlam Properties (Proprietary) Limited ("Sanlam Properties") directly related to Sanlam Life Insurance Limited`s ("Sanlam Life") property portfolio, as a going concern 1. Introduction Vukile unitholders are referred to the detailed terms announcement, dated 11 June 2009, in which they were advised that Vukile, Sanlam Properties, Sanlam and Sanlam Life ("the Sanlam Group Companies") had signed a term sheet relating to inter alia: 1.1 the proposed acquisition by Vukile of the property asset management business of Sanlam Properties directly related to the property asset management of the Sanlam Life property portfolio, constituted by the IT infrastructure and software, furniture and equipment and the take-on of those employees directly related to said asset management function of the Sanlam Life property portfolio, from Sanlam Properties as a going concern ("the Business Acquisition"); 1.2 a call option to be granted by Sanlam Life to Vukile to acquire certain properties valued at approximately ZAR500 million from Sanlam Life ("the Call Option"); and 1.3 a right of first refusal to be granted by Sanlam Life to Vukile in respect of the majority of the remainder of Sanlam Life`s property portfolio ("the Right of First Refusal"), collectively, "the Transaction". Formal agreements ("the Agreements") documenting the Transaction were concluded between the parties on 27 October 2009. This announcement contains an update on the Transaction, including, inter alia, the remaining outstanding conditions precedent. 2. The Business Acquisition 2.1 Update Vukile, Sanlam Properties and Sanlam Life have concluded the Agreements to give effect to the Business Acquisition, subject to the fulfilment of certain remaining conditions precedent set out in paragraph 2.2 below. On conclusion of the Business Acquisition and the fulfilment of the remaining conditions precedent thereto, Vukile will, in addition to performing the property asset management function in respect of its own property portfolio, also render property asset management services to Sanlam Life in respect of Sanlam Life`s property portfolio in terms of an asset management agreement concluded with Sanlam Life on 27 October 2009 ("the Sanlam Life Asset Management Agreement"). 2.2 Conditions precedent to the Business Acquisition The Business Acquisition, the Sanlam Life Asset Management Agreement and the agreements entered into in respect of the Call Option ("the Call Option Agreement") and the Right of First Refusal ("the Right of First Refusal Agreement") are all inter-conditional. In addition, the Business Acquisition is subject to the fulfilment of the following remaining conditions precedent on or before 31 January 2010: 2.2.1 the required approval and consents by the Vukile unitholders ("Vukile Unitholder Resolutions"); 2.2.2 approval by the relevant competition authority, to the extent required; 2.2.3 the passing of a resolution approving the waiver of the Vukile unitholders` rights to require the Sanlam Group Companies and their concert parties to make a mandatory offer, in terms of the Securities Regulation Code on Take-overs and Mergers ("the SRP Code") ("the Waiver Resolution"), and the related dispensation from the Securities Regulation Panel ("the SRP"); 2.2.4 any other regulatory approvals that may be required including, but not limited to, the approval of the JSE Limited ("the JSE") and the SRP; 2.2.5 the passing of a resolution by the members of Sanlam Properties, in terms of section 228 of the Companies Act No. 61 of 1973, to approve and implement the Business Acquisition and the registration of the resolution with the Companies and Intellectual Property Registration Office of South Africa; 2.2.6 Vukile obtaining a written opinion from an independent professional expert that the Business Acquisition is fair, as required by the JSE Listings Requirements, and fair and reasonable, as required by the SRP Code; 2.2.7 the counterparties to certain material contracts of Sanlam Properties having consented in writing to the assignment of all of Sanlam Properties` rights and obligations under such contracts to Vukile; 2.2.8 the Key Employees, as defined in the agreement relating to the Business Acquisition, having entered into employment agreements with Vukile; and 2.2.9 as at the date of the fulfilment or waiver of the last of the conditions referred to above, not more than two Key Employees of Sanlam Properties are no longer employed by Sanlam Properties for any reason whatsoever and have not resiled from their new employment contracts with Vukile. 2.3 Conditions precedent to the Call Option Agreement and the Right of First Refusal Agreement The Call Option Agreement and the Right of First Refusal Agreement are conditional (in addition to the Business Acquisition and the Call Option Agreement and Right of First Refusal Agreement being inter-conditional) upon the fulfilment of the condition that all approvals required by law or regulation in order to give effect to these agreements, are obtained, if any, on or before 31 January 2010. 2.4 Conditions precedent to the Sanlam Life Asset Management Agreement The implementation of the Sanlam Life Asset Management Agreement is conditional (in addition to the Business Acquisition and the Sanlam Life Asset Management Agreement being inter-conditional) upon the fulfilment, or waiver to the extent possible, of the following conditions on or before 31 January 2010: - that all approvals required by law or regulation in order to give effect to the Sanlam Life Asset Management Agreement are obtained, if any; and - the assignment and/or transfer by novation of Sanlam Properties` rights and obligations under and in terms of the property management agreement entered into between Sanlam Properties and JHI Property Services Systems Limited, in favour of Vukile. 3. Acquisition of properties Unitholders are referred to an announcement by Vukile, which appears elsewhere in this publication, which contains details relating to the acquisition of 13 properties from the Sanlam group. 4. Circular relating to the Business Acquisition The circular setting out the details of the Transaction and incorporating a notice of general meeting whereby approval from the requisite majority of Vukile unitholders to the Vukile Unitholder Resolutions, the Waiver Resolution and such other resolutions as may be required to implement the Transaction will be sought, will be posted to Vukile unitholders on or about 16 November 2009. Roodepoort 29 October 2009 Investment bank, corporate adviser and transaction sponsor to Vukile Nedbank Capital, a division of Nedbank Limited Attorneys to Vukile Webber Wentzel JSE sponsor to Vukile Barnard Jacobs Mellet Corporate Finance (Proprietary) Limited NSX sponsor to Vukile IJG Securities (Proprietary) Limited Sponsor to Sanlam Deutsche Securities (SA) (Proprietary) Limited Attorneys to Sanlam Cliffe Dekker Hofmeyr Inc Date: 29/10/2009 14:00:02 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. 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