02:00 Fri 29 Nov 2019
Investec PLC - Update on Asset Management Demerger Proposals
Investec Limited
Incorporated in the
Registration number 1925/002833/06
JSE share code: INL
NSX share code: IVD
BSE share code: INVESTEC
ISIN: ZAE000081949
Incorporated in
Registration number 03633621
LSE share code: INVP
JSE share code: INP
ISIN: GB00B17BBQ50
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
As part of the dual-listed company structure,
Update on Asset Management Demerger Proposals
Further to the announcement by Investec (comprising
Post Demerger, the Asset Management business (currently known as Investec Asset Management) will be known as Ninety One. The separation will be implemented by way of a demerger of Ninety One to a new dual-listed company structure ("DLC"), comprising
Following the Demerger, the business of
Demerger benefits for
The Demerger brings greater focus and simplicity to the Investec Specialist Banking and Wealth & Investment businesses, which should enhance the returns for shareholders and enable the businesses to grow with discipline.
· Capital discipline: A more disciplined approach to capital allocation, particularly where businesses are non-core to the overall long-term growth and capital strategy, such as reducing the non-core equity investments portfolio in South Africa;
· Driving growth: Multiple strategic initiatives to deliver further growth in the medium term, including delivering a more holistic, client-centric offering in Specialist Banking, leveraging the investment in the UK private bank through client growth, and extending Wealth & Investment's proposition through the expansion of its UK financial planning and South African fiduciary capabilities;
· Cost management: Improved management of
· Greater connectivity: Opportunity to build on the compelling existing linkages in
· Digitalisation: Further developing digital capabilities, delivering an enhanced high-tech, high-touch client proposition and promoting greater connectivity and efficiency across all businesses.
The Demerger also provides Investec Shareholders with a clear and transparent valuation for
Demerger benefits for Ninety One
For Ninety One, the Demerger brings several core benefits:
· Enhances positioning: Establishes Ninety One as a truly independent global asset management business, better positioned to achieve its growth ambitions.
· Strategic flexibility: Provides the boards of directors of Ninety One ("Ninety One Boards") with the strategic freedom and flexibility to create value over the long-term.
· Talent acquisition and retention: Enhances Ninety One's ability to attract and retain the best talent in a competitive global market.
· Attractiveness for clients: Raises Ninety One's profile with both existing and prospective clients and improves ability for greater alignment with client objectives.
· Financial flexibility: Reduces some of the capital constraints placed on Ninety One through being part of
Demerger benefits for Investec Shareholders
For the reasons outlined above, the Investec Boards strongly believe that implementing the Demerger simplifies the businesses and focuses them on their respective growth paths, which will enhance the long-term prospects of both businesses for the benefit of Investec Shareholders, clients, employees and other stakeholders. Specifically, the
The Investec Boards believe Investec Shareholders should benefit from value creation over the medium term through direct ownership of two separately listed companies, each pursuing its own growth path.
Following the Demerger, the combined dividend capacity of
In taking the decision to separate Ninety One, the Investec Boards considered the importance of
Impact on Investec Shareholders
Following the implementation of the Proposals, it is expected that:
· approximately 55.9% of the total issued share capital of
· approximately 53.1% of the total issued share capital of
· up to approximately 8.3% of the total issued share capital of
· approximately 15.8% of the total issued share capital of
· approximately 13.4% of the total issued share capital of
· approximately 20% of the total issued share capital of
The net proceeds of the Ninety One Share Sale will be retained by
The Investec Ordinary Shareholders will:
· retain their shareholdings in
· receive dividends from two companies from the financial year ending
o with Ninety One expecting to target, subject to approval of the Ninety One Boards, an ordinary dividend pay-out ratio of at least 50% of operating earnings adjusted for tax. In addition, Ninety One is expected to retain only after tax earnings sufficient to meet current or expected changes in its regulatory capital requirements and investment needs, as well as a reasonable buffer to protect against fluctuations in those requirements. Subject to approval of the Ninety One Boards, it is expected that the remaining balance of after tax earnings, after taking into account any specific events, would be returned to Ninety One Shareholders through payment of a special dividend; and
o with
Based on the proposed dividend policies of
The transaction structure is expected to be as tax efficient as practicable for Investec Ordinary Shareholders from a UK and South African tax perspective. Further information in relation to tax, including a general description of certain tax consequences of the Proposals relevant to Investec Ordinary Shareholders who are resident for tax purposes in the UK, the United States, South Africa, Namibia or Botswana, will be set out in the Circular.
Pro forma financial impact
The implementation of the Proposals is expected to have a positive impact on the CET1 ratio of
To facilitate the Proposals,
Further information on the expected financial effects of implementing the Proposals, including the derivation of the pro forma CET1 ratios, will be set out in the Circular.
Investec Shareholder and Court approvals required
In order for the Proposals to be finalised, Investec Shareholder approval will be sought at a general meeting of
The Proposals can be finalised only if they receive sufficient support from Investec Shareholders at each of these meetings and if the scheme of arrangement required to implement the UK Demerger is approved by the Court.
Timings
The effective time for the UK Demerger is currently expected to be
The effective time for the SA Demerger is currently expected to be
Please refer to the timetable set out below. Further information on the expected key dates for the Proposals will be set out in the Circular.
Fani Titi and Hendrik du Toit, Joint CEOs said:
"We continue to make good progress with respect to the proposed demerger and listing of Ninety One. We remain excited about the benefits of this transaction and are determined to drive simplification across the group, focusing on enhancing the long-term prospects of
Expected timetable of principal events
The expected dates and times listed below may be subject to change.
Event |
|
Time (London time) and/or date[2] |
Publication of the Circular.................................................... |
|
Friday, |
Last day to trade on the Investec plc |
|
Tuesday, |
Last day to trade on the |
|
Tuesday, |
Publication of the Ninety One Registration Document..... |
|
Friday, |
SA Voting Record Time for Investec Limited Shareholders in respect of the |
|
|
Latest time and date for receipt of blue and pink Forms of Proxy for the |
|
|
Latest time and date for appointing a proxy for the |
|
|
Latest time and date for receipt of green and yellow Forms of Proxy for the |
|
|
Latest time and date for receipt of white Forms of Proxy for the Court Meeting[5]............................................................ |
|
|
Latest time and date for appointing a proxy for the Court Meeting by way of CREST Proxy Instruction........................ |
|
|
UK Voting Record Time for Investec plc Shareholders on the Investec plc |
|
|
General Meetings.................................................................... |
|
|
Court Meeting.......................................................................... |
|
|
Publication of the Ninety One Prospectus.......................... |
|
Monday, |
Scheme Court Hearing to sanction the Scheme and confirm the |
|
Wednesday, |
Announcement expected to be released on SENS and RNS regarding finalisation.................................................... |
|
Thursday, |
Last date for transfers between the Investec plc Registers by Investec plc Ordinary Shareholders prior to the UK Demerger Effective Time........................................................ |
|
Thursday, |
Last date for transfers between the Investec Limited Registers by Investec Limited Ordinary Shareholders prior to the SA Demerger Effective Time............................. |
|
Thursday, |
Last day to trade on the Investec plc |
|
Friday, |
Last day to trade on the |
|
Friday, |
Strate Nominee Share Transfers take place[9].................... |
|
|
UK Demerger Record Time................................................... |
|
|
UK Demerger Effective Time ................................................ |
|
|
SA Demerger Effective Time ................................................. |
|
|
Investec Limited Ordinary Shares trade "ex" entitlement on the |
|
Monday,
|
Admission of the Ninety One plc Shares and the Ninety One Limited Shares to the |
|
|
Admission of the Ninety One plc Shares to the |
|
|
Crediting of Ninety One plc Shares to CREST accounts. |
|
As soon as possible after |
SENS announcement confirming the cash proceeds payable in respect of fractional entitlements...................... |
|
By |
Record date for |
|
Wednesday, |
Crediting of Ninety One plc Shares and Ninety One Limited Shares and fractional entitlement to CSDP or broker accounts in the Strate System.................................. |
|
Thursday, |
Transfers between the Investec plc Registers by Investec plc Ordinary Shareholders re-opened................................. |
|
Thursday, |
Transfers between the Investec Limited Registers by Investec Limited Ordinary Shareholders re-opened......... |
|
Thursday, |
Crediting fractional entitlement to CREST accounts........ |
|
Thursday, |
Despatch of cheques or electronic transfer in respect of fractional entitlements for shareholders without a CSDP or broker account..................................................................... |
|
As soon as practicable after Thursday, |
Despatch of share certificates for Ninety One Shares..... |
|
by Friday, |
Conference call details
A conference call to address any questions from investors on information contained in the Circular will be held at 09:00 UK time/11:00 SA time on Tuesday,
· SA participants: +27 10 201 6800 OR +27 11 535 3600
· UK participants: +44 333 300 1418
· Rest of Europe and other participants: +27 11 535 3600 OR +27 10 201 6800
· USA participants: +1 508 924 4326
Enquiries / Advisers:
Investec Investor Relations
General enquiries: +27 (0) 11 286 7070 or +44 (0) 20 7597 5546
Carly Newton: +44 (0) 20 7597 4493
Lansons (UK PR advisers)
Tom Baldock
Tel: +44 (0) 207 566 9716 / +44 (0) 7860 101 715 (mobile)
Brunswick (SA PR advisers)
Graeme Coetzee
Tel: +27 (0) 11 502 7419 / +27 (0) 63 685 6053 (mobile)
JSE Transaction Sponsor:
Notes to Editors:
Investec, established in 1974, is an international specialist bank and asset manager that provides a diverse range of financial products and services to a select client base in three principal markets, the UK and Europe, South Africa and Asia/Australia as well as certain other countries. Investec focuses on delivering distinctive profitable solutions for its clients in three core areas of activity namely Specialist Banking, Wealth & Investment and Asset Management:
· Specialist Banking: Market-leading specialist corporate and institutional banking, investment and private banking activities in South Africa and the UK with
· Wealth & Investment: One of the leading UK and South African private client investment managers with over
· Asset Management (becoming Ninety One): A leading global asset manager with
In
FORWARD-LOOKING STATEMENTS
This announcement contains forward-looking statements with respect to certain of
IMPORTANT INFORMATION
This announcement is not an offer to sell, or a solicitation of an offer to purchase, securities in the United States or in any other jurisdiction.
The securities to which these materials relate have not been, and will not be, registered under the US Securities Act of 1933 (the "US Securities Act"), or under the securities laws of any state or other jurisdiction of the United States. Accordingly, they may not be offered, sold, resold, delivered, distributed or otherwise transferred, directly or indirectly, in or into the United States absent registration under the US Securities Act or an exemption therefrom.
[1] Subject to any acquisitions of Ninety One shares by Forty Two Point Two, as will be described in the Circular.
[2] All references to time in this timetable are to London time. The time in South Africa will be two hours ahead of London time.
[3] The blue and pink Forms of Proxy may be handed to the Chairman of the
[4] The green and yellow Forms of Proxy may be handed to the Chairman of the
[5] The white Form of Proxy may be handed to the Chairman of the Court Meeting or the UK Registrar at the commencement of the meeting.
[6] Court Meeting to commence at
[7] Investec plc Ordinary Shareholders should anticipate their holdings of Investec plc Shares at the Demerger Record Time by taking into account all unsettled trades concluded on or before the last day to trade which are due to be settled on or before the record date for
[8] Investec Limited Ordinary Shareholders should anticipate their holdings of Investec Limited Shares at the Demerger Record Time by taking into account all unsettled trades concluded on or before the last day to trade which are due to be settled on or before the record date for
[9] Investec plc Ordinary Shareholders who hold Investec plc Shares in Certificated Form on the Investec plc
[10] Share certificates may not be dematerialised into Uncertificated Form or rematerialised into Certificated Form between Monday,
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