MTL - Mercantile Bank Holdings - Receipt of an unsolicited expression of

MTL - Mercantile Bank Holdings - Receipt of an unsolicited expression of        
interest to acquire the entire issued share capital of Mercantile and           
cautionary announcement                                                         
Mercantile Bank Holdings Limited                                                
(Incorporated in the Republic of South Africa)                                  
(Registration Number 1989/000164/06)                                            
Share code: MTL ISIN: ZAE000064721                                              
("Mercantile" or "the company")                                                 
RECEIPT OF AN UNSOLICITED EXPRESSION OF INTEREST TO ACQUIRE THE ENTIRE ISSUED   
SHARE CAPITAL OF MERCANTILE AND CAUTIONARY ANNOUNCEMENT                         
1    Background                                                                 
Mercantile shareholders are advised that on 30 June 2011 the Board of       
    Directors of Mercantile ("the Board") received an unsolicited firm          
    intention "(the firm intention") to acquire the entire issued share         
    capital of Mercantile from The Bidvest Group Limited ("Bidvest") ("the      
Offer").                                                                    
2    Offer Consideration                                                        
    The aggregate consideration in terms of the Offer will be R0.355 per        
    ordinary share ("offer share"), less the sum of any dividend declared and   
paid or distribution made per offer share after the date of the Offer and   
    before the settlement of the Offer, and any amount for which Mercantile     
    itself is liable by way of taxes on such dividends or distributions         
    (divided by the number of offer shares) ("offer consideration"). The        
offer price represents a 69% premium to the 30 day volume weighted          
    average traded price ("VWAP") calculated as at the close of trade on        
    Friday 24 June 2011.                                                        
3    Conditions Precedent                                                       
The Offer will not be made unless Bidvest receives by not later than:       
*    22 July 2011, in relation to their shareholding, a signed undertaking      
    from Caixa Geral De Depositas S.A., undertaking to accept the Offer;        
*    29 July 2011, written approval from Mercantile for a confirmatory due      
diligence to be performed at Bidvest`s cost by PwC to confirm that the      
    net asset value of Mercantile is in excess of R1.539 billion at the date    
    of completion of the confirmatory due diligence; and                        
*    5 August 2011, written approval of the offer documentation by the          
relevant regulatory authorities (including the Financial Surveillance       
    Department of the South African Reserve Bank, the Registrar of Banks, the   
    JSE and the Takeover Regulation Panel (`TRP")).                             
If the conditions precedent above are fulfilled Bidvest will be obliged to      
make the Offer within 10 business days after the date on which the last of the  
conditions precedent are fulfilled or waived(as the case may be). Bidvest may   
in its absolute discretion extend the dates or, where possible, waive the       
conditions precedent. The implementation of the Offer is the subject to the     
fulfillment of the following conditions precedent:                              
*    Acceptance or approval, as the case may be of the Offer by Mercantile      
    shareholders owning at least 90% of the offer shares;                       
*    Confirmation is received from PwC, subject to the completion of the        
confirmatory due diligence, that the net asset value of Mercantile as at    
    the date of the completion of the due diligence, is in excess of R1.539     
    billion;                                                                    
*    The acquisition by Bidvest of Mercantile being approved unconditionally    
under the Competitions Act, 89 of 1998, or subject to such conditions as    
    Bidvest may approve in writing, such approval not to be unreasonably        
    withheld;                                                                   
*    Any other regulatory approvals as may be necessary to give effect to the   
Offer being obtained including, but not limited to, such approvals as may   
    be required by the Financial Surveillance Department of the South African   
    Reserve Bank, the Registrar of Banks; and                                   
*    The final date for the fulfillment of the above conditions is 30 November  
2011, failing which the Offer will lapse and be of no further force and     
    effect, unless Bidvest in its absolute discretion extends such date by      
    written notice to Mercantile.                                               
    Should the Offer become unconditional and be accepted in respect of 90%     
of the offer shares, then Bidvest will exercise its right to expropriate    
    the balance of the offer shares in terms of the provisions of the           
    Companies Act No.71 of 2008 (`the Act`) as read together with the           
    regulations promulgated in terms thereof ("the Regulations").               
4    Affected transaction                                                       
    The Offer results in an affected transaction in terms of the Takeover       
    Regulations established in terms of section 120 and 123 of Act. Rand        
    Merchant Bank, a division of FirstRand Bank Limited, has provided the TRP   
with the necessary guarantee as required by the Regulations.                
    In accordance with the Regulations, the Board will be appointing            
    independent external advisors to provide appropriate advice to              
    shareholders.                                                               
5    Cautionary Announcement                                                    
    Shareholders are advised to exercise caution when dealing in their          
    Mercantile shares until further announcements in respect of the Offer are   
    made.                                                                       
Johannesburg                                                                    
30 June 2011                                                                    
Sponsor to Mercantile: Bridge Capital Advisors (Proprietary) Limited            
Date: 30/06/2011 16:59:02 Supplied by www.sharenet.co.za                     
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