NINETY ONE LIMITED
(Incorporated in the Republic of
South Africa)
(Registration number:
2019/526481/06)
JSE Share Code: NY1
ISIN: ZAE000282356
NINETY ONE PLC
(Incorporated in England and
Wales)
(Registration number:
12245293)
LSE Share Code: N91
JSE Share Code: N91
ISIN: GB00BJHPLV88
LEI: 549300G0TJCT3K15ZG14
SANLAM LIMITED
(Incorporated in the Republic of
South Africa)
(Registration number:
1959/001562/06)
JSE & A2X Share Code: SLM; NSX
Share Code: SLA
ISIN: ZAE000070660
("Sanlam" or "Sanlam Group")
SANLAM LIFE INSURANCE LIMITED
(Incorporated in the Republic of
South Africa)
(Registration number:
1998/021121/06)
LEI: 378900E10332DF012A23
Bond Issuer Code: BISLI
("Sanlam Life")
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AND IS FOR
IMMEDIATE RELEASE
NOT
FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART,
DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO
DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT
JURISDICTION
JOINT ANNOUNCEMENT REGARDING
THE CREATION OF A LONG-TERM ACTIVE ASSET MANAGEMENT RELATIONSHIP
BETWEEN SANLAM AND NINETY ONE
Sanlam and Ninety One (the
dual-listed company consisting of Ninety One plc and Ninety One
Limited) have entered into a binding Framework Agreement
("FWA"). Under the terms of
the FWA, the parties have agreed to establish a long-term
relationship whereby Sanlam will appoint Ninety One as its primary
active investment manager for single-managed local and global
products ("Proposed
Transaction").
As part of the Proposed Transaction,
Ninety One will acquire all the issued shares in Sanlam Investment
Management Proprietary Limited ("SIM")[1], an active
investment management business wholly owned by Sanlam Investment
Holdings Limited ("SIH"),
in which the Sanlam Group holds an effective 65.6% interest. In
addition, Sanlam will appoint Ninety One as the permanent
investment manager to manage assets for Sanlam Investments UK
Limited ("SI UK"), a wholly
owned subsidiary of the Sanlam Group. Furthermore, Sanlam will
serve as an anchor investor in Ninety One's international private
and specialist credit strategies that meet its investment
requirements.
As consideration for the Proposed
Transaction, the Sanlam Group will receive an approximate 12.3%
equity stake in Ninety One through a combination of Ninety One
Limited and Ninety One plc shares, thereby establishing the Sanlam
Group as a long-term shareholder of Ninety One.
1. BACKGROUND TO THE PARTIES AND
RATIONALE FOR THE PROPOSED TRANSACTION
1.1. Ninety One:
Ninety One, established in 1991 in
South Africa, is an active investment manager for third-party
clients. From its emerging market origins, the firm has built a
global presence. Ninety One is listed on the London and
Johannesburg Stock Exchanges. Over the years, Ninety One has built
substantial relationships with many of South Africa's leading
financial institutions.
The Proposed Transaction strengthens
the relationship with Sanlam. Ninety One will gain preferred access
to Sanlam's distribution network, expanding its market reach
through Sanlam's established channels and into savings pools
outside the normal reach of the Ninety One brand. Furthermore,
anchor investment will be provided for Ninety One to accelerate the
expansion of its international private credit offerings. This
relationship enables Ninety One to bolster its South African market
leadership and reinforces its ability to deliver outcomes that
benefit clients over the long term.
Hendrik du Toit, Ninety One Founder
and Chief Executive Officer, commented:
"We are looking forward to a long and fruitful relationship
with Sanlam, a business with a powerful brand and significant scale
in South Africa. Our experience and expertise are complementary.
This agreement will give us the opportunity, as leaders in our
respective markets, to create additional value for our
stakeholders. We are making a substantial investment in the future
of South Africa."
1.2. Sanlam:
Founded in 1918, Sanlam is the
largest non-banking financial services group in Africa and is
listed on the Johannesburg Stock Exchange[2],
Namibian Stock Exchange and A2X Markets Limited. Sanlam operates in
31 countries, including eight of the top ten largest African
economies. Sanlam offers a wide range of financial solutions,
including life and general insurance, health, financial planning,
retirement, investments, wealth management and credit, to
institutional and retail clients. As a leading player in the
non-banking financial services sector, Sanlam has built an
extensive distribution network within the South African market,
delivering solutions to a diverse client base.
The Proposed Transaction with Ninety
One supports Sanlam's strategy to strengthen its position in South
Africa. Sanlam has a complete range of investment capabilities to
ensure that assets can be managed optimally on behalf of clients
and shareholders. As a core building block of its investment
solutions, Sanlam's active asset management capability will be
strengthened by this arrangement. Over time, Sanlam anticipates
that Ninety One's investment culture and research processes will
further enhance the competence of the current Sanlam teams,
enabling them to deliver even better outcomes for clients.
Sanlam purposefully selected Ninety
One after identifying them as the pre-eminent South African active
asset manager. A key factor in this decision was Ninety One's
integrated approach to managing South African and offshore assets,
reflecting the demands of an increasingly global industry. With a
shared long-term philosophy and commitment to positive impact,
Sanlam and Ninety One aim to forge a long-term relationship based
on mutual trust, designed to unlock opportunities and optimise
outcomes for shareholders and clients alike. Additionally, Sanlam
has chosen to act as an anchor investor in Ninety One's
international private credit strategies. This strategic move
complements Sanlam's own private credit initiatives and addresses
its long-term need for high-quality private credit assets,
positioning the group to meet growing market demand
effectively.
Paul Hanratty, Sanlam Group Chief
Executive Officer, commented:
"Sanlam is pleased to partner with a like-minded business with
a shared South African heritage, proven global expertise and a
reputable brand. By leveraging our complementary competencies,
Sanlam Investments will be strengthening its South African and
global position as a multi-skilled asset manager. Coupled with
Sanlam Investments' market-leading expertise in passive and
alternative asset classes, as well as multi-managed solutions, the
relationship is set to unlock value for its clients, distribution
force and shareholders."
2. OVERVIEW OF THE PROPOSED
TRANSACTION
The FWA includes the following key
terms:
·
Sale of
SIM: SIH will dispose of its entire
shareholding in SIM to Ninety One, delivering SIM as a clean legal
entity, inclusive of all SIM's active assets under management
("AUM"), associated revenue
streams, and investment professionals, preserving the entity's
operational continuity.
·
Investment
Management Agreement ("IMA") for SI UK assets:
Ninety One will be appointed as the permanent
investment manager for specific SI UK in-scope AUM. To facilitate
Ninety One's management of the in-scope SI UK assets, the
associated SI UK investment professionals responsible for these
assets will transition to Ninety One.
·
Execution of
various operative agreements ("Operative
Agreements"): The Operative
Agreements will comprise a 15-year relationship agreement as well
as transaction agreements to formalise the arrangement between the
parties.
Prior to implementing the sale of
SIM, SIH will be responsible for a reorganisation of SIM to
transfer out all business activities and associated costs not
forming part of the active asset management business. Only
investment professionals responsible for the management of assets
will be retained in SIM and all other costs relating to the
business will be transferred to other entities within the Sanlam
Investments cluster.
3. TRANSACTION
CONSIDERATION
The parties have agreed that the
purchase consideration for the Proposed Transaction will be settled
by the issue of a fixed number of Ninety One shares. This equates
to approximately a 12.3% shareholding in Ninety One (calculated on
the day prior to this announcement), with Sanlam Group holding an
effective shareholding of approximately 9.2% in Ninety One when
excluding ARC Financial Services Investments Proprietary Limited
and Absa Financial Services Limited as indirect minority
shareholders in SIH.
4. FINANCIAL INFORMATION
The in-scope SIM and SI UK AUM
amount to approximately R400 billion (approximately GBP17 billion)
as of 30 September 2024, with approximately 80% currently being
managed in South Africa. For Sanlam, the Proposed Transaction is
anticipated to be slightly earnings and dividend dilutive in the
initial years. However, the Proposed Transaction is expected to
become earnings accretive from year three onward as the strategic
benefits begin to materialise.
Accordingly, the Proposed
Transaction will increase Ninety One's AUM by approximately GBP17
billion by reference to 30 September 2024. For Ninety One, the
Proposed Transaction is anticipated to be earnings and dividend
accretive from inception.
The value of the net assets that are
the subject of the Proposed Transaction and the profits
attributable thereto, will be finalised as part of the Operative
Agreements referred to above. A further announcement will be
released by Ninety One to its shareholders at an appropriate time,
once finalised.
5. MATERIAL TERMS AND CONDITIONS
PRECEDENT
The longstop date for the
finalisation and execution of the Operative Agreements is 31 March
2025. The effective date of the Proposed Transaction will be
dependent on the fulfilment of the suspensive conditions to the
Operative Agreements.
The Operative Agreements will
provide for customary warranties, indemnities, interim period
undertakings and termination mechanisms that are normal for a
transaction of this nature, including the obtaining of the
necessary approvals from shareholders and the regulatory
authorities in South Africa, the United Kingdom and any other
applicable jurisdiction.
6. CATEGORISATION OF THE PROPOSED
TRANSACTION
In accordance with Section 9 of the
JSE Listings Requirements, the Proposed Transaction falls below the
Category 2 threshold for Sanlam. As such, this announcement is made
on a voluntary basis and no Sanlam shareholder approvals are
required.
For Ninety One, the Proposed
Transaction qualifies as a Category 2 transaction under Section 9
of the JSE Listings Requirements. Given the issuance of shares
required as part of the Proposed Transaction, shareholder approval
from both Ninety One Limited and Ninety One plc shareholders is
necessary and will be sought in due course following execution of
the Operative Agreements. Ninety One shareholders will be kept
informed in this regard.
7. INVESTOR AND ANALYST CONFERENCE
CALL
Separate conference calls for
analysts and investors will be held today, 20 November
2024.
Ninety One will host a webcast at
09:00 (UK time). Those wishing to participate should navigate
to https://ninetyone.com/interim-results-webcast
for a registration link to the webcast.
The Sanlam webcast will take place
at 17:00 (South African time). Those wishing to participate should
navigate to
https://my.100.lumiconnect.com/r/participant/live-meeting/100-172-033-036.
Access details for each call are
also available on the companies' websites.
20
November 2024
Ninety One Enquiries:
Ninety One Investor
Relations
ir@ninetyone.com
Ninety One Public Relations:
Kotie Basson (for South
Africa)
kotie.basson@ninetyone.com
+27 (0) 82 375 1317
The person responsible for arranging
the release of this announcement on behalf of Ninety One is Amina
Rasool, Company Secretary.
This announcement is being released
simultaneously on the LSE and JSE in accordance with the rules
applicable to dual listed company structures and will be made
available on the Ninety One website at
www.ninetyone.com.
JSE
Sponsor to Ninety One:
J.P. Morgan Equities South Africa
(Pty) Ltd
Financial Advisor to Ninety One:
Rothschild & Co
South Africa (Pty) Ltd
Legal Advisors to Ninety One:
Edward Nathan Sonnenbergs
Inc.
Linklaters LLP
Sanlam Enquiries:
Sanlam Investor Relations
ir@sanlam.co.za
JSE
Equity Sponsor to Sanlam Limited:
The Standard Bank of South Africa
Limited
JSE
Debt Sponsor to Sanlam Life Insurance Limited:
The Standard Bank of South Africa
Limited
NSX
sponsor to Sanlam Ltd:
Simonis Storm Securities (Pty)
Ltd
Legal Advisors to Sanlam:
Webber Wentzel
Allen Overy Shearman Sterling
LLP
Forward looking statements
This announcement, oral statements
made regarding the Proposed Transaction, and other information
published by Ninety One (where it relates to Ninety One) and/or
Sanlam (where it relates to Sanlam) (jointly the "Parties") may
contain statements which are, or may be deemed to be,
"forward-looking statements". Forward-looking statements are
prospective in nature and are not based on historical facts, but
rather on current expectations and projections of the respective
management of the Parties about future events, and are therefore
subject to risks and uncertainties which could cause actual results
to differ materially from the future results expressed or implied
by the forward-looking statements. The forward-looking statements
contained in this announcement include statements relating to the
expected effects of the Proposed Transaction for the Parties, the
expected timing and scope of the Proposed Transaction and other
statements other than historical facts. Often, but not always,
forward-looking statements can be identified by the use of
forward-looking words such as "plans", "expects" or "does not
expect", "is expected", "is subject to", "budget", "scheduled",
"estimates", "forecasts", "intends", "anticipates" or "does not
anticipate", or "believes", or variations of such words and phrases
or statements that certain actions, events or results "may",
"could", "should", "would", "might" or "will" be taken, occur or be
achieved. Although the Parties believe that the expectations
reflected in such forward-looking statements are reasonable, the
Parties can give no assurance that such expectations will prove to
be correct. By their nature, forward-looking statements involve
risk and uncertainty because they relate to events and depend on
circumstances that will occur in the future. There are a number of
factors that could cause actual results and developments to differ
materially from those expressed or implied by such forward-looking
statements. Other unknown or unpredictable factors could cause
actual results to differ materially from those in the
forward-looking statements. Such forward-looking statements should
therefore be construed in the light of such factors. Neither the
Parties nor any of their respective associates or directors,
officers or advisers, provides any representation, assurance or
guarantee that the occurrence of the events expressed or implied in
any forward-looking statements in this announcement will actually
occur. You are cautioned not to place undue reliance on these
forward-looking statements. Other than in accordance with their
legal or regulatory obligations (including under the UK Listing
Rules, the JSE Listings Requirements and the Disclosure and
Transparency Rules of the FCA and/or Chapter X of the Financial
Markets Act in South Africa), the Parties are under no obligation,
and expressly disclaim any intention or obligation, to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
No statement in this announcement is
intended as a profit forecast or profit estimate.
No
offer or
solicitation
This announcement is not intended
to, and does not constitute, or form part of, any offer to sell or
an invitation to purchase or subscribe for any
securities.