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MTL - Mercantile Bank Holdings Limited - Specific repurchase of ordinary
shares by Mercantile by way of a scheme of arrangement
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" or "the Group")
SPECIFIC REPURCHASE OF ORDINARY SHARES BY MERCANTILE BY WAY OF A SCHEME OF
ARRANGEMENT, THE SUBSEQUENT DELISTING OF MERCANTILE, AND RENEWAL OF
CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Mercantile ordinary shareholders are referred to the cautionary
announcement published on 5 January 2012, where shareholders were
advised that the Board of Directors of the Company has resolved to
consider an offer to minority shareholders to acquire all of their
Mercantile ordinary shares.
2. ABOUT MERCANTILE
Mercantile Bank Holdings Limited is a registered bank controlling
company and an investment holding company. Its holding company is Caixa
Geral de Depositos S.A. ("CGD"), a company registered in Portugal. CGD
is the majority ordinary shareholder in Mercantile, holding
3,614,018,195 ordinary shares which comprise approximately 91.75% of
the Mercantile ordinary shares in issue.
Mercantile`s principal operating subsidiaries comprise:
* Mercantile Bank Limited ("The Bank") which provides a full
range of international and domestic banking services. The
Bank operates in selected retail, commercial, corporate and
alliance banking niches to which it offers banking, financial
and investment services. The Bank is a wholly-owned
subsidiary of Mercantile Bank Holdings Limited; and
* Multi Risk Investment Holdings (Pty) Ltd, an investment
holding company, acquired 1 July 2011 whose major operating
subsidiary, CommRisk Insurance Brokers (Pty) Ltd, offers a
full suite of insurance products for both business and
personal customers.
3. TERMS OF THE OFFER
Mercantile has decided to implement the proposed Offer in terms of
Section 114 of the Companies Act, No 71 of 2008, ("the Act"). The offer
is to be made to all shareholders, except CGD, which represents
324,900,329 ordinary shares ("scheme participants") or approximately
8.25% of the issued ordinary share capital of Mercantile. Mercantile
will make a cash offer of 52 cents for every one Mercantile ordinary
share held (the "Cash Consideration").
The Offer is to be effected, subject to the conditions set out in
Paragraph 4 below, by way of a scheme of arrangement under the
provisions of Section 114 of the Act in respect of Mercantile ordinary
shareholders (the "Scheme").
The Mercantile Share Incentive Trust holds 26 383 872 shares to
discharge its delivery obligations under the Mercantile Share Option
Scheme. In the event that option holders exercise all of the 32 960 000
exercisable share options, an additional 6 576 128 new shares will have
to be issued out of authorised share capital.
Upon the implementation of the Scheme, all of the scheme participants`
ordinary shares will be acquired from the minorities at the Cash
Consideration. Furthermore the listing of the Mercantile ordinary
shares on the Main Board of the JSE Limited ("JSE") will be terminated.
4. CONDITIONS PRECEDENT
The implementation of the Scheme is subject to the fulfilment of the
following conditions precedent:
* Receipt of the necessary regulatory approvals required, including
approvals from the Takeover Regulation Panel ("TRP") and the JSE;
* Receipt of the necessary Exchange Control approvals required from
the South African Reserve Bank; and
* The Scheme being approved by the requisite majority of Mercantile
ordinary shareholders eligible to vote and: (a) to the extent
required, the approval of the implementation of such resolutions
by a Court and (b) if applicable, Mercantile not treating the
aforesaid resolution as a nullity.
5. FUNDING OF THE OFFER CONSIDERATION
The Offer results in an affected transaction in terms of the Takeover
Regulations established in terms of section 120 and 123 of the Act.
Mercantile has, as required in terms of the Act and the Companies
Regulations, 2011, provided a cash confirmation to the TRP confirming
that the Offeror has sufficient cash resources to satisfy the full cash
consideration payable by the Offeror in terms of the Offer. Mercantile
Bank Limited has provided the TRP with an irrevocable and unconditional
confirmation that sufficient funds are held in escrow to settle the
full Offer Consideration that may become payable on implementation of
the Offer, being a maximum amount of R 172, 367, 757-64. The
confirmation has been provided in terms of the provisions of regulation
111(4) and 111(5) of the Takeover Regulations.
6. OPINIONS AND RECOMMENDATIONS
The Offer is classified as an affected transaction in terms of the Act
and the regulations published in terms of section 120 of the Act.
Accordingly, the independent Directors of Mercantile ("Independent
Board") will retain an independent professional expert, as required
under regulation 90 (1) of the Takeover regulations, for the purposes
of providing a fairness opinion on the terms of the offer. The opinion
of the independent professional expert and the Independent Board will
be included in the circular to be distributed to Mercantile ordinary
shareholders. The Independent Board comprises L Hyne (Chairman), GP de
Kock, AT Ikalafeng and TH Njikizana
7. RESPONSIBILITY STATEMENT
The Independent Board accepts responsibility for the information
contained in this announcement, and to the best of their respective
knowledge and belief, the information is true and, where appropriate,
this announcement does not omit anything likely to affect the
importance of the information included.
8. PRO FORMA FINANCIAL EFFECTS AND RENEWAL OF CAUTIONARY ANNOUNCEMENT
In compliance with the Companies Regulations, 2011, promulgated under
the Act, pro forma financial effects must be disclosed to provide
information on the impact of the Offer on Mercantile`s reported
financial statements. As the financial effects of the Offer have not
yet been finalised with respect to the audited results of Mercantile
for the year ended 31 December 2011 (due for release on 24 February
2012), Mercantile ordinary shareholders are advised to continue
exercising caution when dealing in the Company`s ordinary shares until
such time that the financial effects are released.
9. CIRCULAR TO MERCANTILE ORDINARY SHAREHOLDERS
A circular containing details of the Offer and the terms and timing
thereof, as well as a notice of general meeting, will be posted to
Mercantile ordinary shareholders in due course.
Johannesburg
15 February 2012
Sponsor and transaction advisor: Bridge Capital Advisors (Pty) Limited
Legal Advisor: Eversheds
Date: 15/02/2012 16:30:17 Supplied by www.sharenet.co.za
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