REG - Ninety One PLC - Execution of Key Operative Agreements

Ninety OneAnnouncement

06/03/2025 07:15

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RNS Number : 5472Z  Ninety One PLC  06 March 2025

NINETY ONE LIMITED

(Incorporated in the Republic of South Africa)

(Registration number: 2019/526481/06)

JSE Share Code: NY1

ISIN: ZAE000282356

("Ninety One Limited")

 

NINETY ONE PLC

(Incorporated in England and Wales)

(Registration number: 12245293)

LSE Share Code: N91

JSE Share Code: N91

ISIN: GB00BJHPLV88

LEI: 549300G0TJCT3K15ZG14

("Ninety One plc")

 

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")

 

 

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 EXECUTION OF KEY OPERATIVE AGREEMENTS FOR THE
CREATION OF A LONG-TERM ACTIVE ASSET MANAGEMENT RELATIONSHIP BETWEEN SANLAM
AND NINETY ONE AND DISCLOSURE OF FURTHER FINANCIAL INFORMATION

1.            INTRODUCTION

1.1.     On 20 November 2024, Sanlam and Ninety One (the dual-listed company
("DLC") consisting of Ninety One plc and Ninety One Limited, together, "Ninety
One") jointly announced (the "Initial Announcement") that they had entered
into a binding Framework Agreement (the "FWA") to establish a long-term
strategic relationship whereby Sanlam would appoint Ninety One as its primary
active asset manager for single-managed local and global products with
preferred access to Sanlam's South African distribution network (the "Proposed
Transaction").

1.2.     The FWA envisaged that the Proposed Transaction would be
implemented pursuant to several operative agreements in terms of which:

SA Transaction:

1.2.1.      Sanlam Investment Holdings Proprietary Limited ("SIH") will
dispose of its entire shareholding in Sanlam Investment Management Proprietary
Limited ("SIM") to Ninety One Limited (the "SIM Sale"). Prior to the closing
of the Proposed Transaction and implementation of the SIM Sale, SIH will
effect an intra-group reorganisation of the SIH group of companies (the "SI
Reorganisation"). As part of the SI Reorganisation, all business activities
and associated costs not forming part of the active asset management business,
as referred to in the Initial Announcement, will be transferred out of SIM;

1.2.2.          Sanlam Life will receive Ninety One shares as a
consequence of various transactions to be entered into between Sanlam Life,
SIM and Ninety One plc pursuant to the SA Transaction (as defined below) (the
"Sanlam Life Transaction");

1.2.3.         Sanlam and Ninety One will enter into an initial 15-year
strategic relationship, which will provide for (among other things) Ninety One
to be granted preferred access to Sanlam's distribution network (together with
the SIM Sale and the Sanlam Life Transaction, the "SA Transaction"); and

UK Transaction:

1.2.4.        Sanlam Investments UK Limited ("SI UK") will transfer its
active asset management business, including certain investment professionals
currently employed by SI UK, to Ninety One UK Limited ("Ninety One UK"),
pursuant to which Ninety One UK will be appointed as the primary active asset
manager for a specific portion of SI UK's assets under management (the "UK
Transaction"). As part of the UK Transaction, Ninety One UK will enter into
certain agreements setting out the terms for appointment of Ninety One UK as
the primary active asset manager for the SI UK mandates prior to the closing
of the UK Transaction.

2.            EXECUTION OF KEY OPERATIVE AGREEMENTS

2.1.         To facilitate the implementation of the Proposed
Transaction, Sanlam and Ninety One have now entered into the following key
operative agreements:

SA Transaction

2.1.1.           a transaction implementation agreement setting out a
series of inter-connected transaction steps for the implementation of the SA
Transaction including, inter alia, the SIM Sale and Sanlam Life Transaction;

2.1.2.            a relationship agreement, effective upon closing of
the SA Transaction, which will govern the 15-year strategic relationship
between Ninety One and the Sanlam Group;

2.1.3.            certain investment management agreements setting out
the terms for the appointment of Ninety One as the primary active asset
manager for the assets held on the balance sheet by Sanlam Life and Sanlam
Developing Markets Limited; and

UK Transaction

2.1.4.         a transfer agreement governing the implementation of the UK
Transaction.

2.2.         The remaining operative agreements will be entered into
on or before closing of the SA Transaction and the UK Transaction, as
applicable.

3.            TRANSACTION CONSIDERATION

3.1.    As consideration for the Proposed Transaction, the Sanlam Group will
receive a total of 125,694,804 shares, comprising a combination of Ninety One
plc and Ninety One Limited shares. This allocation represents an approximate
12.3% equity stake in Ninety One on a DLC basis, based on Ninety One's total
issued share capital as at 28 February 2025. The distribution of these shares
among the Sanlam Group entities is as follows:

 Recipient     SIH         Sanlam Life  SI UK       Sanlam Group
 Total shares  99,424,590  12,594,619   13,675,595  125,694,804

 

3.2.   Excluding ARC Financial Services Investments Proprietary Limited as an
indirect minority shareholder in SIH and Absa Financial Services Limited as a
direct minority shareholder in SIH, the Sanlam Group will hold an effective
shareholding of approximately 8.9% in Ninety One (on a DLC basis).

4.            FINANCIAL INFORMATION

4.1.         As previously indicated in the Initial Announcement, the
financial information referred to under paragraph 4 (Financial Information)
thereof is set out below.

4.2.       The value of the SIM net assets as at 30 September 2024 and the
net profits that are the subject of the Proposed Transaction for the six
months ended 30 September 2024 were GBP23.6 million and GBP11.7 million(( 1 ))
respectively. The net assets figure reflects SIM's pre-SI Reorganisation net
assets.

4.3.         This financial information has been prepared in terms of
IFRS and extracted from the SIM and SI UK management accounts for the
six-month period ended 30 September 2024. Review opinions on this financial
information were issued by the respective audit firms.

4.4.      For Ninety One, the Proposed Transaction is anticipated to be
earnings and dividend accretive from inception.

4.5.     For Sanlam, the Proposed Transaction is anticipated to be
marginally dilutive to earnings and dividends in the initial year, primarily
due to transaction implementation costs and taxation on the transaction
consideration. However, from year three onward, the Proposed Transaction is
anticipated to become earnings and dividends accretive as the strategic
benefits of the deal begin to materialise.

5.            CONDITIONS PRECEDENT

5.1.         The UK Transaction and the SA Transaction are not
inter-conditional, each transaction is subject to various suspensive
conditions, including regulatory and other customary approvals.

5.2.     The SA Transaction is further contingent upon completion of the SI
Reorganisation, the SIH minority shareholder approval, as well as the Ninety
One shareholder approvals for the issuance of Ninety One shares to the Sanlam
Group in connection with the SA Transaction. The UK Transaction is not subject
to Ninety One shareholder approval, and the issuance of Ninety One shares in
connection with the UK Transaction will take place using Ninety One's existing
allotment authority, as previously approved by Ninety One shareholders at its
2024 annual general meeting.

5.3.      The UK Transaction has a long stop date of 15 August 2025, while
the SA Transaction has a long stop date of 31 March 2026. The effective
dates for each transaction will be dependent on the fulfilment of the
suspensive conditions applicable to each transaction.

6.            EXPECTED TIMETABLE AND WAY FORWARD

A circular to Ninety One shareholders containing further details relating to
the issuance of the Ninety One shares in connection with the SA Transaction
will be published on the Ninety One website (and subsequently posted to Ninety
One shareholders) in due course. The announcement containing the relevant
salient dates will also be published in due course.

 

 

6 March 2025

 

Ninety One Enquiries:

Ninety One Investor Relations

ir@ninetyone.com

 

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.

 1  ZAR/GBP exchange rate used: 22.89 for the value of the net assets (being
the exchange rate as at 30 September 2024); and 23.39 for the net profits
attributable (being the average exchange rate used for the six months ended 30
September 2024).

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