IMPERIAL HOLDINGS LIMITED - Disposal of 100% of the Ordinary Shares in and Tier 2 Capital of the Regent Group

Disposal of 100% of the Ordinary Shares in and Tier 2 Capital of the Regent Group

Imperial Holdings Limited
(Incorporated in the Republic of South Africa)
Registration number: 1946/021048/06
Share code: IPL
ISIN: ZAE000067211
(”Imperial” or the “Company’ or the “Group”)



DISPOSAL OF 100% OF THE ORDINARY SHARES IN AND TIER 2 CAPITAL
OF THE REGENT GROUP

PREVIOUS RELATED ANNOUNCEMENTS

Shareholders are referred to the following announcements
released on the Stock Exchange News Service of the JSE
Limited:
-   dated 29 September 2015 regarding the disposal of the
    ordinary shares in and tier 2 capital of the Regent Group
    (Regent   Life  Assurance   Company   Limited  and   Regent
    Insurance Company Limited)(“the Proposed Transaction”);
-   dated   24   October   2016   regarding   the   recommended
    prohibition by the Competition Commission submitted to the
    Competition Tribunal;
-   dated 17 January 2017 regarding the disposal of the Regent
    Group’s Botswana and Lesotho operations (“Regent Africa”);
    and
-   dated 21 February 2017 regarding the update of the
    Proposed Transaction included in the Group’s 2017 interim
    financial results announcement.

STRATEGY

Imperial’s disposal of the Regent Group was motivated by the
desire to exit any business unrelated to Imperial’s core motor
vehicle or logistics businesses, and any business that lacked
the scale or potential to compete effectively in the long
term.

Although portions of the Regent Group’s business, namely the
Value Added Products (“VAPS”) business were directly related
to the motor vehicle business, it was decided that the
interests of shareholders, staff and a prospective purchaser
would best be served by disposing of the Regent Group in its
entirety, with Imperial continuing to participate in the
revenues and profits that accrued from the VAPS.

On 29 September 2015 Imperial announced that it had accepted
an offer made by Hollard Holdings (Pty) Limited (“Hollard”) to
acquire the Regent Group’s South African operations and Regent
Africa. Hollard would, on implementation, sell the Regent
Group’s VAPS businesses to MotoVantage Holdings (Pty) Limited
(“MotoVantage”).

The Proposed Transaction required unconditional     regulatory
approvals in all the relevant jurisdictions.

SUBSEQUENT DEVELOPMENTS

On 23 October 2016, the South African Competition Commission
recommended   to  the   Competition Tribunal that   Proposed
Transaction be prohibited.

Subsequently, on 17 January 2017, the relevant Botswana and
Lesotho authorities approved the disposal of Regent Africa to
Hollard International Holdings, for a consideration of R697
million.

Following the prohibition recommendation by the South African
Competition Commission, Imperial, Hollard and MotoVantage
(collectively, “Merging Parties”) and their advisors engaged
extensively with the Competition Commission to seek remedies
to those issues that were the basis of the prohibition
recommendation.

During this process, MotoVantage elected to withdraw from the
Proposed Transaction in order to obviate further delays and
the distraction of key management in pursuit of remedies to
the Competition Commission’s objections on the VAPS components
of the Proposed Transaction.

The Merging Parties subsequently reached agreement with the
Competition Commission on revised terms and conditions, which
were recommended to the Competition Tribunal for approval
(“Revised Terms”).

Imperial is pleased to advise its shareholders that on 24
April 2017, the South African Competition Tribunal approved
the Proposed Transaction on the Revised Terms set out below.

REVISED TERMS OF THE PROPOSED TRANSACTION

Once declared unconditional in accordance with the terms of
the Proposed Transaction, Hollard will acquire 100% of the
ordinary shares in and tier 2 capital against the Regent
Group, excluding certain VAPS operations, entities and profits
to be retained by Imperial (“Retained VAPS Businesses”) as
listed below:

1)   Preference shares (adjusted to be market related) through
     which Imperial derives commercial benefit and profits from
     insurance related activities and VAPS in its motor vehicle
     value chain; and selling these products to the independent
     motor dealership network;
2)   SA   Warranties   (Pty)   Limited   (including   SA  Vehicle
     Maintenance,    MCS    and    Paintech),    which   provides
     administrative and sales functions of motor related VAPS
     to Imperial and an independent motor dealership network,
     the income streams of which are core to Imperial’s
     integrated motor vehicle business value chain;
3)   360 plus (Pty) Limited, through which maintenance and
     service plans are sold to the independent motor dealership
     network; and
4)   The Regent Group office building in Edenvale, which will
     be leased to Hollard for a period of 2 years from
     implementation of the Proposed Transaction on market
     related terms.

Pursuant to the Revised Terms, MotoVantage will not form part
of the Merging Parties.

The total purchase consideration received by Imperial,
including the Regent Africa proceeds (concluded in January
2017) and the tier 2 capital, will now amount to approximately
R1.8 billion.

The outstanding balance of the purchase consideration will be
settled in cash on fulfilment of the remaining condition
precedent, being approval of the Proposed Transaction by the
Financial Services Board of South Africa.

The   profits  attributable  (excluding  the   Retained  VAPS
Businesses) to the net assets of the Proposed Transaction are
approximately R170 million.

CONCLUSION

Notwithstanding the delays in achieving resolution, the
revised terms of the Proposed Transaction complies fully with
Imperial’s strategic and financial criteria. The effective
date of the Proposed Transaction will be upon the fulfilment
of the remaining condition precedent.

Bedfordview
24 April 2017

Sponsor:
Merrill Lynch South Africa (Pty) Limited

Date: 24/04/2017 12:25:00 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.