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RMH/RMI/REM - RMB Holdings/Rand Merchant Insurance/Remgro Limited - Joint

Release Date: 12/12/2011 09:58
Code(s): RMI REM RMH
Wrap Text

RMH/RMI/REM - RMB Holdings/Rand Merchant Insurance/Remgro Limited - Joint announcement incorporating disclosure of directors` dealings and beneficial interests in RMBH and RMI ordinary shares RMB Holdings Limited (Incorporated in the Republic of South Africa) Registration number 1987/005115/06 Share code: RMH ISIN: ZAE000024501 ("RMBH") Rand Merchant Insurance Holdings Limited (Incorporated in the Republic of South Africa) Registration number: 2010/005770/06 Share code: RMI ISIN: ZAE000153102 ("RMI") Remgro Limited (Incorporated in the Republic of South Africa) Registration number: 1968/006415/06 Share code: REM ISIN: ZAE000026480 ("Remgro") Royal Bafokeng Holdings (Proprietary) Limited (Incorporated in the Republic of South Africa) Registration number: 2006/006906/07 ("RBH") JOINT ANNOUNCEMENT INCORPORATING DISCLOSURE OF DIRECTORS` DEALINGS AND BENEFICIAL INTERESTS IN RMBH AND RMI ORDINARY SHARES RMBH and RMI are pleased to announce the acquisition by RBH of: - a portion of GT Ferreira, LL Dippenaar and PK Harris` (the "Founders") direct and indirect shareholdings in RMBH and RMI (the "Founders` Sale"); as well as - a portion of Remgro`s shareholding in RMBH and RMI (the "Remgro Sale") (Collectively the "RBH Acquisition"). RBH will, upon completion of these acquisitions, hold a 15% interest in both RMBH and RMI. 1. INTRODUCTION During the first quarter of 2011, RMBH completed a group restructuring culminating in the separate listing of its banking interests via RMBH and of its insurance interests via RMI (the "RMBH Restructuring"). A key component of the RMBH Restructuring was the acquisition by RBH of a 5.1% shareholding in RMBH (the "Initial RBH Acquisition"). The Initial RBH Acquisition was implemented through the subscription for cash by RBH for new shares in RMBH. Consequential to the RMBH Restructuring, RBH also received a 4.9% shareholding in RMI. In order to facilitate the acquisition by RBH of an additional interest in both RMBH and RMI, the Founders, Remgro, and RBH (the "Parties") have entered into a sale and purchase agreement in terms of which the Founders and Remgro will sell to RBH a portion of their shareholdings in both RMBH and RMI. 2. RATIONALE FOR THE RBH ACQUISITION The Parties share a vision of a strategic long term relationship centred on RMBH and RMI, two of South Africa`s leading financial services investment holding companies. As such, they are all committed to the continuing transformation of their South African businesses and, through the RBH Acquisition, ensuring that the empowerment credentials of RMBH, RMI and their underlying investments are significantly enhanced. The RBH Acquisition is a key next step in enhancing the strategic relationship between the Parties. 2.1 The Founders and Remgro As they begin to scale down their active involvement in the RMBH and RMI groups, the Founders believe that in RBH they have found investors with a similar investment philosophy and value set and have agreed to make available a portion of their holdings to RBH. Remgro, as long term partners of the Founders, agreed to make available a portion of its holdings to enable RBH to build a larger strategic stake in both RMBH and RMI. Post the RBH Acquisition, the Founders and Remgro will retain a significant shareholding in both RMBH and RMI. Consequently, in conjunction with RBH, they will continue to build and share in the success of two of South Africa`s pre-eminent financial services groups. 2.2 RBH The Initial RBH Acquisition was premised on a joint vision between the Parties of creating the pre-eminent black influenced financial services group in Southern Africa with RBH increasing its shareholding over time and potentially extending the relationship to other areas of co-operation. The RBH Acquisition furthers this vision and enhances RBH`s strategic interest in two of South Africa`s premier financial services groups. It constitutes a major step towards further diversifying the investment portfolio of the Royal Bafokeng Nation ("RBN") and creating a significantly empowered financial services platform. RBH views the underlying companies in which RMBH and RMI are invested in as market leaders, with strong brands, robust operational fundamentals and good management teams, which will contribute meaningfully to the economic sustainability of the RBN. 3. SALIENT TERMS OF THE RBH ACQUISITION Upon completion, RBH will have acquired ordinary shares in RMBH ("RMBH Shares") and ordinary shares in RMI ("RMI Shares") for a total cash consideration of R5,284 million ("Purchase Consideration") comprising acquisitions through the market (R771.8 million) and acquisitions from Remgro and the Founders (R4,512 million) as set out below: 3.1 Acquisition of RMBH Shares and RMI Shares through the open market In the period up to 17 October 2011, RBH acquired 24,361,617 RMBH Shares and 14,972,155 RMI Shares, representing 1.7% and 1.0% of RMBH and RMI`s issued share capital respectively through the market. The RMBH Shares and the RMI Shares were acquired at R24.00 per share and R12.50 per share respectively. 3.2 Acquisition from the Founders and Remgro The table below summarises the number of RMBH Shares and RMI Shares to be acquired from the Founders and Remgro by RBH as well as their resultant shareholdings post the RBH Acquisition: Party Number of shares sold Current Resultant shareholding shareholding RMBH Shares RMI Shares RMBH RMI RMBH RMI Remgro 50,088,654 68,866,361 31.5% 34.9% 27.9% 30.3% Founders 64,841,443 66,550,967 13.9% 13.2% 9.3% 8.7% Total 114,930,097 135,417,328 3.3 Pricing of the RBH Acquisition RBH will acquire the RMBH Shares and the RMI Shares at a price of R24.32 per share and R12.68 per share respectively, representing a blended discount of 2.4% to the combined 30-day VWAPs of RMBH and RMI as at 1 December 2011. 3.4 Settlement and transfer of the RMBH Shares and RMI Shares It is anticipated that the transfer of the RMBH Shares and the RMI Shares will take place on settlement of the Purchase Consideration by RBH, on or about 20 December 2011. 3.5 Board representation Pursuant to the RBH Acquisition, the Parties have agreed to support RBH nominating two directors to each of the RMBH and RMI boards of directors respectively. 4. NOTIFICATION OF DEALING IN SECURITIES BY DIRECTORS In compliance with sections 3.63 to 3.66 of the JSE Limited`s Listings Requirements ("Listings Requirements"), the following dealings in the securities of RMBH and RMI have taken place by directors of RMBH and RMI: RMBH RMI
Director: GT Ferreira GT Ferreira Number of securities: 40,681,212 40,681,212 Class of security: Ordinary Ordinary

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