Firm intention by SA Fire House to make an offer and withdrawal of cautionary announcement
Zurich Insurance Company South Africa Limited SA Fire House Limited
(Incorporated in the Republic of South Africa) (Incorporated in the Republic of South Africa)
Registration number 1965/006764/06 Registration number 1957/003350/06
JSE Code: ZSA
(“Zurich” or “the Company”) (“SA Fire House”)
FIRM INTENTION BY SA FIRE HOUSE TO MAKE AN OFFER TO ACQUIRE THE ENTIRE ISSUED
ORDINARY SHARE CAPITAL OF ZURICH NOT ALREADY HELD BY SA FIRE HOUSE AND
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Zurich shareholders (“Shareholders”) are referred to the detailed cautionary announcement released on
the Stock Exchange News Service (“SENS”) on 30 June 2015 (“Detailed Cautionary Announcement”), in
which they were advised that SA Fire House, being the Company’s majority shareholder and itself a
wholly-owned subsidiary of Zurich’s ultimate holding company, Zurich Insurance Group Ltd (“ZIG”), was
expected to make an offer (“Offer”) to acquire the entire issued ordinary share capital of Zurich, not
already held by SA Fire House (“Scheme Shares”) by way of a scheme of arrangement (“Scheme”) in
accordance with the Companies Act, No. 71 of 2008, as amended (“Companies Act”).
Shareholders are advised that SA Fire House has yesterday submitted a letter to the board of directors of
Zurich (“Zurich Board”) constituting a firm intention by SA Fire House to make the Offer as contemplated
in Chapter 5 of the Companies Act and Chapter 5 of the Companies Regulations, 2011 (“Companies
Regulations”) (“Firm Intention”). The Zurich Board has appointed an independent committee of the Board
(“Independent Board”) to consider the terms of the Offer and the Scheme.
SA Fire House currently holds 10 236 885 Zurich ordinary shares, representing approximately 84.1% of
the issued ordinary share capital of Zurich (“Zurich Shares”).
SA Fire House proposes to implement the Offer by way of a Scheme, in terms of section 114, read with
section 115, of the Companies Act, to be proposed by SA Fire House between Zurich and the holders of
Scheme Shares (“Scheme Participants”) as at the record date of the Scheme.
The Offer, if accepted, and the Scheme, if implemented, will result in the Zurich Shares being delisted
from the exchange operated by the JSE Limited (“JSE”) (“Delisting”).
The purpose of this firm intention announcement (“Firm Intention Announcement”) is to provide
Shareholders with the salient terms of the Offer, in compliance with Regulation 101 of the Companies
2. Offer Consideration
SA Fire House proposes to acquire the Scheme Shares from Scheme Participants for an acquisition
consideration (“Offer Consideration”) of R240 per Scheme Share, payable in cash, representing an
aggregate Offer Consideration of R466 227 600 (calculated on the basis of 1 942 615 Scheme Shares).
The Offer Consideration will escalate by 6% per annum calculated from 1 October 2015 to the date of
payment, if payment of the Offer Consideration has not been made to Scheme Participants on or by
30 September 2015.
3. Offer mechanism
SA Fire House proposes to implement the Offer by way of the Scheme, on the following basis:
The Scheme is proposed in accordance with section 114 of the Companies Act, read with section
115 of the Companies Act, and will constitute an affected transaction as defined in section 117©(iii)
of the Companies Act. As such, the Scheme will be regulated by the Companies Act, the Companies
Regulations and the Takeover Regulation Panel (“TRP”).
The posting of the Scheme circular (“Circular”) to Shareholders will be subject to the fulfilment or
waiver, as the case may be, of the posting conditions, set out in paragraph 0 below.
The implementation of the Scheme will be subject to the Scheme conditions precedent, set out in
paragraph 8 below.
As a consequence of implementing the Scheme, Zurich will no longer meet the criteria for listing set out in
the JSE Listings Requirements and accordingly, the Delisting will be implemented pursuant to paragraph
1.16(b) of the JSE Listings Requirements.
The Scheme is required to be approved by Scheme Participants passing a special resolution in
accordance with the provisions of section 115(2) of the Companies Act (“Scheme Resolution”) at a
general meeting convened for this purpose (“Scheme Meeting”).
Upon implementation of the Scheme, SA Fire House will make payment of the Offer Consideration to
Scheme Participants for the acquisition of their Scheme Shares and all the Scheme Shares will be
transferred to and registered in the name of SA Fire House. Upon completion of this transfer of the
Scheme Shares to SA Fire House, SA Fire House shall be the sole shareholder of Zurich.
The conversion of Zurich into a wholly-owned subsidiary of SA Fire House and ultimately, ZIG, will
facilitate the leveraging of ZIG’s global resources and capabilities for the purpose of enhancing the
Company’s position as a leading South African insurance carrier.
The Delisting will furthermore result in significant reductions in regulatory compliance and stakeholder
reporting activities. This reduction will allow for meaningful savings in management time and costs within
5. Cash guarantee
The Offer Consideration will be settled by SA Fire House in cash. As required in terms of the Companies
Act and Companies Regulations, Citibank, N.A., South Africa Branch (registration number
1995/007396/10) has provided a cash guarantee (“Cash Guarantee”) to the TRP in respect of SA Fire
House’s financial obligation to effect payment of the Offer Consideration due in terms of the Scheme,
which Cash Guarantee is in a form acceptable to the TRP and complies with regulations 111(4) and
111(5) of the Companies Regulations.
6. Shareholder support for the Scheme
As stated in the Detailed Cautionary Announcement, Scheme Participants holding in excess of 75% of
the Scheme Shares have provided SA Fire House with irrevocable undertakings (“Irrevocable
Undertakings”) to accept the Offer and to vote in favour of the special and ordinary resolutions necessary
to authorise and implement the Scheme.
The following Scheme Participants have provided Irrevocable Undertakings:
Shareholder: Number of Percentage of
Scheme Shares Scheme
Old Mutual Investment Group
Proprietary Limited 1 039 811 53.5
(acting through Old Mutual Equity
Norges Bank Investment Management* 355 673 18.3
Old Mutual Investment Group
Proprietary Limited (acting in 330 879 17.0
representative capacity) *
1 726 363 88.8
Note: (*) Scheme Shares held on behalf of clients in terms of discretionary and/or non-discretionary
7. Posting conditions
Further details pertaining to the Scheme will be set out in the Circular, incorporating a notice convening
the Scheme Meeting in order to consider and, if deemed fit, to pass the special and ordinary resolutions
necessary to authorise and implement the Scheme.
The posting of the Circular to Shareholders will be subject to the fulfilment or waiver of the following
conditions, by no later than Thursday, 6 August 2015 (or such later date as SA Fire House and Zurich
may agree in writing, which date shall not be later than Wednesday, 26 August 2015):
(1) the independent expert (“Independent Expert”) retained by Zurich in terms of section 114(2) of the
Companies Act has prepared and issued a report expressing the opinion that the Offer Consideration
is fair and reasonable to Shareholders;
(2) the Independent Board recommends to the Shareholders that they vote in favour of the Scheme; and
(3) to the extent applicable, the JSE and the TRP approve the posting of the Circular.
The conditions in paragraphs (1) and (2) are for the benefit of SA Fire House and may be waived by the
SA Fire House in its sole discretion by notice to Zurich in writing.
The condition in paragraph 0 is regulatory in nature and cannot be waived, although the time period within
which such condition is to be fulfilled may be extended by SA Fire House in its sole discretion by notice to
Zurich in writing.
8. Scheme Conditions Precedent
The Scheme is subject to the fulfilment of the following conditions precedent (“Scheme Conditions
Precedent”), on or before 17:00 on Friday, 4 September 2015:
(1) the approval of the Scheme by the requisite majority of Shareholders (other than SA Fire House,
which is excluded from the Offer) as contemplated in section 115(2)(a) of the Companies Act, and: (a)
to the extent required, the approval of the implementation of such special resolution by a court in terms
of section 115(2) and/or section 115(3) of the Companies Act; and (b) if applicable, Zurich not treating
the aforesaid special resolution as a nullity, as contemplated in section 115(5)(b) of the Companies
(2) in respect of the implementation of the Scheme, and to the extent applicable, the approval of the
Financial Surveillance Department of the South African Reserve Bank, the JSE and the TRP (either
unconditionally or subject to conditions as may be acceptable to SA Fire House).
The Scheme Conditions Precedent cannot be waived.
SA Fire House will be entitled to extend the date for fulfilment of any of the Scheme Conditions
Precedent, by up to 60 days, in its sole discretion, by notice in writing to Zurich and subject to the
approval of or conditions imposed by the TRP, but shall not be entitled to extend the date to a date later
than the aforesaid 60 day period without the prior written consent of Zurich and subject to the approval of
or any conditions imposed by the TRP.
9. Voting at the Scheme Meeting
In accordance with section 115(4) of the Companies Act and regulation 84 of the Companies Regulations,
SA Fire House and any directors of SA Fire House who are Shareholders and any other parties deemed
to be acting in concert with SA Fire House are precluded from voting at the Scheme Meeting on the
special and ordinary resolutions necessary to authorise and implement the Scheme, and their Zurich
Shares will be excluded:
- for purposes of determining whether the applicable quorum requirement for the Scheme Meeting is
- for purposes of determining the total number of Scheme Shares eligible to vote on the special and
ordinary resolutions necessary to authorise and implement the Scheme.
10. Independent Board and Independent Expert’s fair and reasonable opinion
The Scheme is an affected transaction in terms of section 117 of the Companies Act. Accordingly, an
Independent Board comprising Stuart G Morris (Chairperson), John M Vice and Mandiza N Mbekeni, has
been constituted to consider the terms of the Scheme.
In accordance with section 114(2) of the Companies Act and regulation 110 of the Companies
Regulations, the Independent Board has appointed KPMG Services Proprietary Limited (“KPMG”) as the
Independent Expert to provide the Independent Board with external advice in relation to the Scheme and
to make appropriate recommendations to the Independent Board for the benefit of Scheme Participants.
The report containing the Independent Expert’s opinion will be contained in the Circular.
11. Posting of the Circular
It is expected that the Circular, incorporating a notice of Scheme Meeting, will be posted to Shareholders
on or about 7 August 2015. A further announcement setting out the salient dates and times in relation to,
inter alia, the posting of the Circular and the Scheme Meeting to be held on or about 4 September 2015
will be released in due course.
An application will be made by Zurich to the JSE to terminate the listing of the Zurich Shares on the JSE
following implementation of the Scheme.
13. Salient dates
Posting of Circular to Shareholders and notice of Scheme Meeting
released on SENS Friday, 7 August
Salient dates announcement, notice of Scheme Meeting published
in the press Tuesday, 11 August
Scheme Meeting to be held Friday, 4 September
The above dates are subject to change and, if changed, will form the basis of a further announcement in
14. Withdrawal of cautionary announcement
Shareholders are advised that, following publication of the terms of the Scheme herein, the Detailed
Cautionary Announcement referred to in paragraph 1 is hereby withdrawn and caution is no longer
required to be exercised by Shareholders when dealing in Zurich Shares.
15. Responsibility Statement
The Independent Board accepts responsibility for the information contained in this Firm Intention
Announcement to the extent that it relates to Zurich. To the best of its knowledge and belief, such
information contained in this Firm Intention Announcement is true and nothing has been omitted which is
likely to affect the importance of such information.
The board of directors of SA Fire House accepts responsibility for the information contained in this Firm
Intention Announcement to the extent that it relates to SA Fire House. To the best of its knowledge and
belief, such information contained in this Firm Intention Announcement is true and nothing has been
omitted which is likely to affect the importance of such information.
30 July 2015
Corporate advisor and sponsor to Zurich
Rand Merchant Bank, a division of FirstRand Bank Limited
Legal advisor to SA Fire House
Norton Rose Fulbright South Africa Inc
KMPG Services Proprietary Limited
Date: 30/07/2015 04:32:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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