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MTL - Mercantile - Financial Effects regarding the Proposed Specific Repurchase of Securities by Mercantile by way of a Scheme of Arrangement and Withdrawal of 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" or "the Group") FINANCIAL EFFECTS REGARDING THE PROPOSED SPECIFIC REPURCHASE OF SECURITIES BY MERCANTILE BY WAY OF A SCHEME OF ARRANGEMENT AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT INTRODUCTION Shareholders are referred to the SENS announcement on 15 February 2012 regarding the proposed offer to minority shareholders by way of a scheme of arrangement under the provisions of section 114 of the Companies Act, No 71 of 2008 ("the Act"). The offer is to be made to all shareholders, except Mercantile`s holding company, Caixa Geral de Depositos S.A. The offer to minorities represents 298,516,457 ordinary shares, net of treasury shares ("scheme participants") or approximately 7.58% 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") and will extend the offer to Mercantile share scheme option holders (who held 32,960,000 exercisable options as at 31 December 2011), on the same basis to that being made to the scheme participants.(collectively "the Offer"). The Offer is to be effected by way of a scheme of arrangement under the provisions of section 114 of the Act in respect of Mercantile ordinary shareholders and Mercantile share option holders (the "Scheme"). On the implementation of the Scheme, all of the scheme participant`s shares will be acquired from the minorities at the Cash Consideration. Subsequently, the listing of the Mercantile ordinary shares on the Main Board of the JSE Limited ("JSE") will be terminated. As the financial effects were not disclosed in the announcement on 15 February 2012, they are set out below. PRO FORMA FINANCIAL EFFECTS OF THE OFFER The unaudited pro forma financial effects of the Offer on Mercantile before and after the Offer are based on the audited results of Mercantile for the year ended 31 December 2011. The unaudited financial effects are presented for illustrative purposes only, to provide information on how the Offer may have impacted on the results and financial position of Mercantile. The unaudited pro forma financial effects are the responsibility of Mercantile`s directors. Due to the nature of the unaudited pro forma financial effects, they may not fairly present Mercantile`s financial position and the results of its operations after the Offer. The financial effects do not purport to be indicative of what the financial results would have been, had the Offer been implemented on a different date. The unaudited pro forma financial information has been presented in a manner consistent in all respects with International Financial Reporting Standards and Mercantile`s accounting policies applied consistently throughout the period. The financial effects of the Offer are set out below: Before the After the Percentag Offer Offer e change Amount Amount
Basic earnings per share 3.2 3.2 - ("EPS") (cents) Diluted earnings per share 3.2 3.2 - ("DEPS") (cents) Headline earnings per share 3.2 3.2 - ("HEPS") (cents) Diluted headline earnings per 3.2 3.2 - share ("DHEPS") (cents) Net asset value per share 42.9 41.9 (2.3) ("NAV") (cents) Tangible net asset value per 36.1 34.6 (4.2) share ("TNAV") (cents) Total shares in issue 3 938 918 3 614 018 (8.3) 524 195 Shares in issue net of 3 912 534 3 614 018 (7.6) treasury shares (After: Nil) 652 195 Weighted average number of 3 912 234 3 614 018 (7.6) shares in issue 421 195 net of treasury shares (After: Nil) Diluted weighted average 3 917 984 3 614 018 (7.8) number of shares in issue net 421 195 of treasury shares (After: Nil) Notes and assumptions: 1. The EPS and HEPS in the "Before the Offer" column of the table are based on the audited statement of comprehensive income of Mercantile for the financial year ended 31 December 2011 and 3 912 234 421 Mercantile ordinary shares in issue (being the weighted number of ordinary shares in issue for the year ended 31 December 2011, net of treasury shares). 2. The DEPS and DHEPS in the "Before the Offer" column of the table are based on the audited statement of comprehensive income of Mercantile for the financial year ended 31 December 2011 and 3 917 984 421 Mercantile ordinary shares in issue (being the weighted diluted number of ordinary shares in issue for the year ended 31 December 2011, net of treasury shares). 3. The EPS and HEPS in the "After the Offer" column of the table are based on 3 614 018 195 Mercantile ordinary shares in issue and the assumptions that: * the Offer became effective on 1 January 2011 and the purchase price was settled on that date; * the Offer was settled in cash; and * the net cash used for the settlement was invested on the Money Market at an after tax rate of 3.8%, yielding an annual after-tax interest of R6 194 766. 4. The DEPS and DHEPS in the "After the Offer" column of the table are based on 3 614 018 195 Mercantile ordinary shares in issue and the assumptions that: * the Offer became effective on 1 January 2011 and the purchase price was settled on that date; * the Offer was settled in cash; and * the net cash used for the settlement was invested on the Money Market at an after tax rate of 3.8%, yielding an annual after-tax interest of R6 194 766. 5. The NAV per share and TNAV per share in the "Before the Offer" column of the table are based on the audited statement of financial position of Mercantile at 31 December 2011 and 3 912 534 652 Mercantile shares in issue, net of treasury shares. 6. The NAV per share and TNAV per share in the "After the Offer" column of the table are based on the assumptions that the Offer was completed on 31 December 2011. 7. Once-off transaction costs relating to the Offer are estimated to be R1.5 million. 8. There are no post balance sheet events which require adjustment to the pro forma financial effects. 9. The pro forma financial effects have not been reviewed by Mercantile`s auditors. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT Following the disclosure of the financial effects of the Offer, shareholders are no longer required to exercise caution when dealing in their Mercantile shares and accordingly the cautionary announcement released by Mercantile on 15 February 2012 is hereby withdrawn. Johannesburg 23 February 2012 Sponsor and transaction advisor: Bridge Capital Advisors (Pty) Limited Legal Advisor: Eversheds Date: 23/02/2012 14:44:03 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. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.
