To view the PDF file, sign up for a MySharenet subscription.

MMI - MMI Holdings Limited - MMI acquires Momentum Short-Term Insurance from

Release Date: 05/06/2012 07:05
Code(s): MMI
Wrap Text

MMI - MMI Holdings Limited - MMI acquires Momentum Short-Term Insurance from Outsurance MMI Holdings Limited (Incorporated in the Republic of South Africa) Registration Number: 2000/031756/06 ISIN Code: ZAE000149902 JSE Share Code: MMI NSX Share Code: MIM ("MMI" or "the Company") MMI ACQUIRES MOMENTUM SHORT-TERM INSURANCE FROM OUTSURANCE INTRODUCTION Shareholders of MMI are advised that the Company, through its wholly-owned subsidiary Momentum Group Limited ("Momentum"), entered into a binding sale of shares agreement with OUTsurance Holdings Limited ("OUTsurance"), a subsidiary of Rand Merchant Insurance Holdings Limited ("RMI") in terms of which Momentum will, upon fulfilment of the suspensive conditions referred to below ("Suspensive Conditions"), acquire OUTsurance`s 50% shareholding in Momentum Short-term Insurance Company Limited ("MSTI") ("Transaction"). Momentum already owns the other 50% of the issued share capital of MSTI. MSTI conducts short- term insurance business and provides personal and commercial lines cover to individuals and business owners through a network of registered and/or affiliated intermediaries. SMALL RELATED PARTY TRANSACTION RMI is a material shareholder of MMI for purposes of the Listings Requirements of the JSE Limited ("JSE Listings Requirements") and therefore a related party of MMI. OUTsurance, being a subsidiary of RMI, is therefore also a related party of MMI as contemplated in section 10.1(b)(vii) of the JSE Listings Requirements. As a result, the Transaction is categorised as a small related party transaction in terms of section 10.7 of the JSE Listings Requirements. THE TRANSACTION Rationale MMI`s vision is to be a leader in meeting financial services needs, both in South Africa and selected countries in the rest of Africa. MMI is currently underrepresented in the short-term insurance market in South Africa. Full ownership and control of MSTI will enable MMI to effectively leverage its shareholding in MSTI. The Transaction will allow MMI to closer align short-term insurance products with its other products and optimise the use of MMI`s strong intermediary-based distribution channels. MMI plans to create the necessary intellectual property, skills and capacity within MMI to provide further growth in the short-term insurance industry. Terms of the Transaction In terms of the Transaction, OUTsurance will dispose of its 50% shareholding in MSTI to Momentum with effect from the fifth business day following the later of (i) the date on which the last of the Suspensive Conditions has been satisfied, and (ii) the date on which purchase price has been determined as set out below ("the Effective Date"). Purchase price The purchase price payable by Momentum to OUTsurance in terms of the Agreement shall be calculated by the auditors of MSTI in accordance with an agreed formula based on the audited financial statements of MSTI for the financial year ending 30 June 2012 ("Purchase Price"). The Purchase Price will not exceed R150 000 000.00 and will be paid from Momentum`s own cash resources. Pro forma financial effects The pro forma financial effects of the Transaction on MMI`s earnings per share, headline earnings per share, net asset value per share and tangible net asset value per share, based on MMI`s latest published interim financial results for the 6-month period ended 31 December 2011, are insignificant as contemplated in paragraph 9.15 of the JSE Listings Requirements. SUSPENSIVE CONDITIONS The Transaction is subject to the fulfilment or waiver of, inter alia, the following Suspensive Conditions: - the unconditional approval of the Transaction by the Registrar of Short-Term Insurance and the South African competition authorities, or if such approvals are conditional, each of Momentum and OUTsurance confirming their approval of such condition(s) in writing; - receipt of an exemption from the Takeover Regulation Panel in terms of the Companies Act, 71 of 2008 ("Companies Act"), exempting Momentum and OUTsurance from complying with the relevant provisions of the Companies Act and the Takeover Regulations issued in terms of the Companies Act; and - receipt of confirmation by the Company from an independent expert acceptable to the JSE Limited ("JSE") confirming that the terms of the Transaction are fair to the shareholders of the Company ("Fairness Opinion"); FURTHER ANNOUNCEMENT In terms of section 10.7(b) of the JSE Listings Requirements, the Company is required to provide the JSE with written confirmation from an independent expert acceptable to the JSE, that the terms of the Transaction with OUTsurance, being a related party, are fair as far as the shareholders of MMI are concerned. The Company has engaged Deloitte & Touche to prepare the Fairness Opinion. Following receipt of the Fairness Opinion, the Company will provide the JSE with a copy thereof and will release a further announcement on SENS advising shareholders of the finding in the Fairness Opinion. Assuming that Deloitte & Touche found that the terms of the Transaction are fair to MMI shareholders, the Fairness Opinion will lie for inspection at the Company`s registered office for a period of 28 days from the date of the further announcement. AMENDMENT OF THE MEMORANDUM OF INCORPORATION Following the implementation of the Transaction, MSTI`s memorandum of incorporation will be amended to conform to the requirements of Schedule 10 of the JSE Listings Requirements and the Companies Act. Centurion 5 June 2012 Legal Advisors to MMI, MSTI and Momentum Webber Wentzel Corporate Finance Advisors to MMI, MSTI and Momentum Rand Merchant Bank (A division of FirstRand Bank Limited) Sponsor to MMI in South Africa Merrill Lynch South Africa (Proprietary) Limited Sponsor to MMI in Namibia Simonis Storm Securities (Proprietary) Limited Date: 05/06/2012 07:05:01 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.

Share This Story