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Revised Updated Pro-Forma Financial Information As At 31 December 2012
Absa Group Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1986/003934/06)
JSE Share Code: ASA
ISIN: ZAE000067237
(“Absa Group”)
REVISED UPDATED PRO-FORMA FINANCIAL INFORMATION AS AT 31 DECEMBER 2012
1. INTRODUCTION
Shareholders are referred to the detailed terms announcement released on 6 December 2012
regarding the proposed transaction to combine the Barclays African operations, which are
expected to include Barclays Bank Plc’s interests in Botswana, Ghana, Kenya, Mauritius,
Seychelles, Tanzania, Uganda, Zambia and the Barclays Africa Regional Office Proprietary
Limited, with Absa Group and the announcement regarding the posting of the circular
released on 18 December 2012. The proposed transaction will be effected by way of an
acquisition by Absa Group of 100% of the shares in Barclays Africa Limited, for a
consideration of 129,540,636 Absa Group ordinary shares, at the agreed R141.50 per share
(the “Proposed Transaction”). As a result, Barclays stake in Absa Group will increase from
55.5% to 62.3%.
To reflect the enlarged portfolio and pan-African focus of the business, it is intended that
“Absa Group Limited” will be renamed “Barclays Africa Group Limited” and the composition of
the board of directors of Absa Group will be reconstituted accordingly.
The Proposed Transaction is expected to be completed in the first half of 2013, subject to
fulfilment of the conditions precedent.
The updated pro-forma financial effects as at 31 December 2012 are set out below.
2. UPDATED UNAUDITED PRO FORMA FINANCIAL EFFECTS OF THE PROPOSED
TRANSACTION
The unaudited pro forma financial effects of the Proposed Transaction are set out below. The
unaudited pro forma financial effects have been prepared for illustrative purposes only, to
provide information on how the Proposed Transaction might have affected the reported
historical financial information of Absa Group, assuming that the Proposed Transaction was
implemented on 1 January 2012, for purposes of the pro forma income statement and 31
December 2012 for purposes of the pro forma statement of financial position.
Because of their nature, the unaudited pro forma financial effects may not fairly present Absa
Group’s financial position, changes in comprehensive income, changes in equity, and results of
operations or cash flows after the Proposed Transaction. It does not purport to be indicative of
what the financial results would have been had the Proposed Transaction been implemented on
a different date.
The board of Absa Group are solely responsible for the preparation of the unaudited pro forma
financial effects.
The table below sets out the unaudited pro forma financial effects on Absa Group of the
Proposed Transaction based on audited results of Absa Group for the 12 months ended 31
December 2012 and financial position at 31 December 2012.
Twelve month period ended 31 December 2012
Before the After the
The
Proposed Proposed Percentage
Proposed
Transaction Transaction change (3)
Transaction
(1) (2)
Earnings per share – cents 1,169.6 29.8 1,199.4 2.5%
Headline earnings per share –
1,227.3 20.8 1,248.1 1.7%
cents
Net asset value per share -
9,319 (184) 9,136 (2.0%)
cents
Net tangible asset value per
8,962 (202) 8,760 (2.3%)
share – cents
Notes to the pro-formas:
(1) The 'Before the Proposed Transaction' financial information has been extracted, without
adjustment from the published, audited full year results of Absa Group for the 12 month
period ended 31 December 2012.
(2) The 'After the Proposed Transaction' financial information includes the following
adjustments:
a. the inclusion of the adjusted, unaudited income and expenditure relating to the Barclays
Africa operations on the assumption that the Proposed Transaction took place on 1 January
2012;
b. the inclusion of the adjusted, unaudited assets and liabilities relating to the Barclays Africa
operations on the assumption that the Proposed Transaction took place on 31 December
2012;
c. operating expenses due to the actuarial gains and losses arising on the retirement benefit
funds being recognised in Other Comprehensive Income to align with Absa Group accounting
policies;
d. the expensing of incremental transaction costs of R28 million, given that R150 million has
been included in Absa Group’s financial results for the year ending 31 December 2012;
e. the capitalisation of transaction costs of R9 million;
f. the reversal of the revaluation reserve which arose on the revaluation of a property in
Barclays Bank Uganda Limited to align with Absa Group accounting policy of recognising
property at its historical cost less accumulated depreciation;
g. the purchase consideration has been settled by the issue of new ordinary shares, which
has been calculated utilising a valuation of Barclays Africa operations of GBP 1.3billion, an
exchange rate of GBP1:ZAR14.10 and an Absa share price of R141.50;
h. the excess of the purchase consideration over the net asset value of the Barclays Africa
operations is recognised against share premium as no goodwill is recognised due to Absa
Group and Barclays Africa operations being under common control; and
i. the number of shares and weighted average number of shares in issue have been adjusted
for the 129 540 636 new ordinary shares to be issued as settlement for the acquisition of the
Barclays Africa operations.
(3) The 'Percentage change' column compares the 'After the Proposed Transaction' column to
the 'Before the Proposed Transaction' column.
(4) With the exception of the transaction costs discussed under 2 d and 2 e above, the other
adjustments are anticipated to have continuing effect.
(5) The pro-forma financial information has been prepared based on audited results for Absa
Group and unaudited management accounts for Barclays Africa operations as incorporated
into Barclays consolidated results for 31 December 2012 results announcement.
The pro forma financial effects of the Proposed Transaction as set out above have been
prepared in accordance with the requirements of the JSE Listings Requirements and the
South African Institute of Chartered Accountant’s Guide on pro forma financial information.
The above pro forma financial effects include transaction costs of R150 million in the audited
statutory accounts for Absa and R28 million of additional costs in “The Proposed Transaction”
column. Had the entire R178 million of transaction costs been included as part of “The
Proposed Transaction” column and not accounted for in part in the “Before the Proposed
Transaction” column, the pro forma financial impact of the Proposed Transaction on Absa is
set out below:
Twelve month period ended 31 December 2012
Before the The After the
Percentage
Proposed Proposed Proposed
change
Transaction Transaction Transaction
Adjusted earnings per share –
1,190.5 8.9 1,199.4 0.7%
cents
Adjusted headline earnings per
1,248.2 (0.1) 1,248.1 0.0%
share – cents
Notes:
Excluding the transaction costs of R178 million from the analysis above, the pro forma
adjusted earnings per share and headline earnings per share after the Proposed Transaction
is 1,220.3 cents and 1,269.0 cents respectively resulting in an percentage increase of 2.5%
and 1.7% to earnings per share and headline earnings per share respectively.
3. GENERAL MEETING
Shareholders are reminded of the general meeting to be held in the P W Sceales Auditorium,
Absa Towers, 160 Main Street, Johannesburg on Monday, 25 February 2013 at 10:00 to
transact the business as stated in the Notice contained in the circular to shareholders posted
on 18 December 2012.
Johannesburg
13 February 2013
Independent lead sponsor to Absa Group
J.P. Morgan Equities South Africa Proprietary Limited
Joint sponsor to Absa Group
Absa Corporate and Investment Banking, a division of Absa Bank Limited
Date: 13/02/2013 04:21:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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