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AFROCENTRIC INVESTMENT CORPORATION LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1988/000570/06)
(JSE Share Code: ACT)
(ISIN: ZAE000078416)
(“Afrocentric”)
SANLAM LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1959/001562/06)
(JSE Share Code: SLM
(NSX Share Code: SLA)
(A2X Share Code: SLM)
(ISIN: ZAE000070660)
(“Sanlam”)
JOINT ANNOUNCEMENT REGARDING OFFER BY SANLAM TO ACQUIRE CONTROL OF
AFROCENTRIC, AND CAUTIONARY ANNOUNCEMENT IN RESPECT OF AFROCENTRIC
SHAREHOLDERS
1. INTRODUCTION
1.1. Shareholders of Afrocentric (“Afrocentric Shareholders”) are hereby advised that the board
of directors of Afrocentric (“Afrocentric Board”) has received an offer letter from Sanlam,
expressing Sanlam’s firm intention to acquire shares (“Afrocentric Shares”) constituting no
less than 36.9% (“Minimum Shares Requirement”) and up to 43.9% (“Maximum Shares
Percentage”) of the current issued share capital of Afrocentric from Afrocentric Shareholders.
1.2. Sanlam is entitled to waive the Minimum Shares Requirement and shall, in its discretion, be
entitled to acquire more than the Maximum Shares Percentage, as applicable, subject to
paragraph 3.2 below.
1.3. The offer is for a purchase consideration of R6.00 per Afrocentric Share (“Offer
Consideration”) and will be implemented by way of a conditional partial offer (“Partial Offer”)
as contemplated in section 125(3) of the Companies Act, 71 of 2008, as amended
(“Companies Act”).
1.4. Should the Transaction (as defined in paragraph 3.1.8 below) proceed and (i) if the Minimum
Shares Requirement is not waived and (ii) Sanlam does not elect to acquire more than the
Maximum Shares Percentage, Sanlam will hold no less than 55.0% and no more than 60.0%
of the Afrocentric Shares, subject to paragraph 3.2.6 below.
2. RATIONALE FOR THE TRANSACTION
2.1. Sanlam
2.1.1. Affordable and reliable healthcare is an important need for consumers. Sanlam
intends to expand its client proposition to provide a more holistic product offering,
including medical aid, health insurance and administration. Through this
Transaction, Sanlam will be able to integrate Afrocentric’s product offering into its
ecosystem, while Afrocentric will gain increased access to the wide Sanlam
distribution network. Afrocentric’s client base will also benefit from access to the
overall Sanlam product offering and vice versa.
2.1.2. Afrocentric is focused on delivering affordable medical aid, health insurance and
administration which complements Sanlam’s purpose of enabling its clients to be
financially secure and prosperous.
2.1.3. Sanlam has an excellent offering in the employee benefits market and by offering
health insurance and administration alongside its other benefits, Sanlam will be
able to create a simpler and more convenient solution for employers.
2.1.4. Sanlam believes in the long-term growth potential of Afrocentric and the
businesses’ combined abilities to deliver a differentiated proposition in the
healthcare sector. This will be done through developing bespoke healthcare
solutions and enhanced commercial visibility through increased marketing and
Sanlam co-branding at the administrator level.
2.1.5. In addition to the opportunity to participate in Sanlam’s vision for the future of
Afrocentric, the implementation of the Partial Offer will afford Afrocentric
Shareholders an attractive opportunity to partially liquidate their otherwise illiquid
Afrocentric Shares at an attractive premium to the volume weighted average
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traded price (“VWAP”) of the Afrocentric Shares, while maintaining the benefits
of remaining invested in a listed environment.
2.2. Afrocentric
Afrocentric currently holds 71.3% of ACT Healthcare Assets Proprietary Limited (registration
number 2008/025969/07) (“AHA”) and, subsequent to the Transaction, AHA will be a wholly
owned subsidiary of Afrocentric. Sanlam, individually or together with its subsidiary
companies, including Sanlam Life (“Sanlam Group”) will become a strategic and controlling
shareholder in Afrocentric and thereby have alignment with other Afrocentric Shareholders in
the future strategy of Afrocentric and AHA. The Asset for Share Transaction (as defined in
paragraph 3.1.2 below) will facilitate a structure whereby Sanlam Life Insurance Limited
(registration number 1998/021121/06), a wholly owned subsidiary of Sanlam (“Sanlam Life”),
will hold shares at a listed Afrocentric level and not at the level of its subsidiary, AHA. This will
facilitate improved alignment of interest between Sanlam Group and Afrocentric, potentially
supporting further investment from Sanlam Group, development of bespoke healthcare
solutions through the co-operation of the Sanlam Group and Afrocentric teams and potential
integration of the Sanlam Group and Afrocentric products. Further investment from Sanlam
Group in Afrocentric would enable integration of Afrocentric into the ecosystem of the Sanlam
Group, Afrocentric will gain increased access to the wider Sanlam Group distribution network
and Afrocentric’s client base will benefit from access to the overall Sanlam Group product
offering.
3. TERMS AND CONDITIONS OF THE TRANSACTION
3.1. Overview of the Transaction
3.1.1. The Partial Offer is subject to the fulfilment or, if applicable, waiver of the
conditions precedent set out in paragraph 3.6 of this announcement
(“Conditions Precedent”).
3.1.2. The Conditions Precedent to the Partial Offer include the condition that the
Afrocentric Shareholders approve the issue by Afrocentric to Sanlam Life of
231 340 754 new shares in Afrocentric (“Consideration Shares”), credited as
fully paid-up and listed on the stock exchange operated by JSE Limited (“JSE”).
These shares will constitute approximately 28.7% of the issued shares in
Afrocentric subsequent to such issue and will be issued in exchange for and as
consideration for the disposal by Sanlam Life to Afrocentric of all the shares held
by Sanlam Life in AHA (“Asset for Share Transaction”). Sanlam Life currently
holds 28.7% of the issued share capital of AHA (“A4S Shares”).
3.1.3. The number of Consideration Shares has been calculated based on the number
of Afrocentric Shares in issue on the date of this announcement, excluding
treasury shares. Should the number of Afrocentric Shares in issue increase
before implementation of the Asset for Share Transaction, including by virtue of
any issue of new Afrocentric Shares (other than treasury shares) pursuant to any
long-term share incentive plans approved by Afrocentric Shareholders, the
number of Consideration Shares will increase proportionately, such that the
number of Consideration Shares constitutes 28.7% of the issued shares in
Afrocentric, excluding treasury shares, after the issue of shares in terms of the
Asset for Share Transaction.
3.1.4. Once the Partial Offer has been implemented, the Asset for Share Transaction
will be implemented.
3.1.5. The Afrocentric Shares will remain listed on the JSE following implementation of
the Transaction.
3.1.6. If the Transaction becomes unconditional, it shall become effective from the date,
and be implemented in accordance with the terms, detailed in the combined
circular to be issued by Afrocentric and Sanlam to the Afrocentric Shareholders
in respect of the Transaction (“Circular”) and in terms of which a meeting of the
Afrocentric Shareholders will be convened (“General Meeting”) to consider and,
if deemed fit, to pass the resolutions required to be adopted by Afrocentric
Shareholders for purposes of the Transaction (including the issue of the
Consideration Shares). See paragraph 12 of this announcement for further detail
in this regard.
3.1.7. The Partial Offer constitutes an “affected transaction” as defined in
section 117(1)(c) of the Companies Act and will therefore be regulated by the
Companies Act, the regulations published in terms of the Companies Act
(“Takeover Regulations”) and the Takeover Regulations Panel (“TRP”).
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3.1.8. The Partial Offer and the Asset for Share Transaction are referred to collectively
as the “Transaction”.
3.2. Detail of the Partial Offer
3.2.1. If less than the Minimum Shares Requirement of the Afrocentric Shares are
tendered in terms of the Partial Offer, Sanlam will be entitled to elect whether or
not to proceed with the Transaction provided that Sanlam shall not declare the
Partial Offer unconditional as to acceptances (as contemplated in section 125(4)
of the Companies Act) unless it receives acceptances in respect of at least
179 752 572 Afrocentric Shares (constituting 31.3% of Afrocentric Shares, the
“Absolute Floor”). If Sanlam elects to proceed in circumstances where less than
the Minimum Shares Requirement is tendered, Sanlam will acquire all Afrocentric
Shares that are tendered in terms of the Partial Offer.
3.2.2. The Transaction will not proceed (and Sanlam shall have no election in this
regard) if less than the Absolute Floor is tendered in terms of the Partial Offer.
3.2.3. If between 36.9% (the Minimum Shares Requirement) and 43.9% (the Maximum
Shares Percentage) (inclusive) of the Afrocentric Shares are tendered in terms
of the Partial Offer, Sanlam will be obliged to proceed with the Transaction and
accept all Afrocentric Shares tendered in terms of the Partial Offer up to the
Maximum Shares Percentage, on the basis that (i) Sanlam will accept all of the
Afrocentric Shares tendered by each Afrocentric Shareholder who tenders up to
the Maximum Shares Percentage of the Afrocentric Shares it holds; and (ii) in
respect of each Afrocentric Shareholder who tenders Afrocentric Shares in
excess of the Maximum Shares Percentage, subject to paragraph 3.2.6 below,
Sanlam shall accept such proportion of the excess tender as will (taking into
account all other excess tenders by Afrocentric Shareholders and treating all
Afrocentric Shareholders equally) result in Sanlam holding, prior to
implementation of the Asset for Share Transaction, the Maximum Shares
Percentage of the Afrocentric Shares in aggregate.
3.2.4. For the avoidance of doubt, should the tendered Afrocentric Shares equal or
exceed the Minimum Shares Requirement, Sanlam will acquire such shares
proportional to the shareholding of the Afrocentric Shareholders that tendered the
Afrocentric Shares.
3.2.5. Should Sanlam receive acceptances of the Partial Offer which would (before
implementation of the Asset for Share Transaction) result in Sanlam holding more
than the Maximum Shares Percentage (“Excess Acceptances”), Sanlam shall,
subject to paragraph 3.2.6 below, be entitled, at its election, to acquire all or a
portion of the shares constituting the Excess Acceptances. If Sanlam elects to
accept all or a portion of the Excess Acceptances, it will (i) issue an
announcement on the Stock Exchange News Services of the JSE (“SENS”) on
the record date of the Partial Offer, stating the percentage of Afrocentric Shares
which it will accept (“Partial Offer Percentage”), which will not exceed 64.8% of
the Afrocentric Shares (before implementation of the Asset for Share
Transaction), (“Absolute Ceiling”); (ii) accept an Excess Acceptance in full from
any Afrocentric Shareholder who tenders up to the Partial Offer Percentage; and
(iii) in respect of each Afrocentric Shareholder who tenders Afrocentric Shares in
excess of the Partial Offer Percentage, accept such proportion of the excess
tender as will (taking into account all other excess tenders by Afrocentric
Shareholders and treating all Afrocentric Shareholders equally) result in Sanlam
holding, prior to implementation of the Asset for Share Transaction, the Partial
Offer Percentage in aggregate.
3.2.6. Under no circumstances shall the acquisition by Sanlam of Afrocentric Shares in
terms of the Transaction result in Sanlam holding more than 74.9% of the issued
share capital of Afrocentric following the implementation of the Partial Offer and
the Asset for Share Transaction.
3.3. Mechanism of the Transaction
3.3.1. In relation to the Partial Offer but subject to the provisions of the Circular:
3.3.1.1. Afrocentric Shareholders who tender shares in terms of the Partial
Offer (“Offer Participants”) will be entitled to tender more than
36.9% of the Afrocentric Shares they hold to Sanlam and Sanlam
shall be obliged to accept all excess tenders up to the Maximum
Shares Percentage pro rata between all Offer Participants who make
such an excess tender, on the basis set out in paragraph 3.2.1 and
3.2.3 above;
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3.3.1.2. Subject to paragraph 3.2.6 above, Sanlam is entitled, on written
notice to Afrocentric issued on SENS on the record date for purposes
of the Partial Offer (as detailed in the Circular):
3.3.1.2.1. to waive the Minimum Shares Requirement and, as
a result, nonetheless implement the Partial Offer
even if Sanlam will acquire less than the Minimum
Shares Requirement in terms of the Partial Offer,
provided that Sanlam shall at all times acquire no
less than the Absolute Floor in terms of the Partial
Offer; or
3.3.1.2.2. in its discretion, to acquire all or a portion of shares
tendered in excess of the Maximum Shares
Percentage and up to the Partial Offer Percentage in
terms of the Partial Offer, subject to a maximum
equal to the Absolute Ceiling, on the basis set out in
paragraph 3.2.5 above.
3.3.1.3. Offer Participants shall be entitled to receive the Offer Consideration
from Sanlam in return for the sale of their Afrocentric Shares (“Offer
Shares”) to Sanlam; and
3.3.1.4. Sanlam shall acquire registered and beneficial ownership, free of
encumbrances, of the Offer Shares against settlement of the Offer
Consideration.
3.3.2. In relation to the Asset for Share Transaction but subject to the provisions of the
Circular:
3.3.2.1. Sanlam Life shall transfer and Afrocentric shall acquire ownership of
the A4S Shares in exchange and as consideration for the issue of the
Consideration Shares; and
3.3.2.2. Afrocentric shall issue and Sanlam Life shall acquire ownership of the
Consideration Shares.
3.3.3. Once the Transaction has been implemented:
3.3.3.1. the Sanlam Group will hold no less than 55.0% of the Afrocentric
Shares (subject to Sanlam’s right to waive the Minimum Shares
Requirement), made up of the Offer Shares (being Sanlam’s direct
31.3% holding in Afrocentric following implementation of the Partial
Offer) and the Consideration Shares (being Sanlam Life’s direct
28.7% holding in Afrocentric following implementation of the Asset for
Share Transaction); and
3.3.3.2. AHA will be a wholly owned subsidiary of Afrocentric.
3.3.4. Sanlam has undertaken that, once the Transaction has been implemented, it will
not increase its shareholding in Afrocentric to 75% or more without making an
offer to all the Afrocentric Shareholders (other than the Sanlam Group) to acquire
all their Afrocentric Shares under Section 117(1)(c)(v) of the Companies Act.
3.4. Effects of the Transaction
The table below provides an illustration of the resultant shareholding of Sanlam in Afrocentric
should the Transaction proceed, and taking into account both the implementation of the Partial
Offer and the Asset for Share Transaction, respectively:
Aggregate Sanlam's rights and obligations in terms of Resultant
percentage of the Partial Offer shareholding by
Afrocentric Sanlam Group in
Shares Afrocentric post
tendered under Asset for Share
the Partial Offer Transaction
Below 31.3% Transaction fails 0% (Transaction not
implemented)
31.3% - 36.9% Sanlam shall be entitled to elect whether to 51.0% - 55.0%
proceed with the Transaction and, if it proceeds,
will accept all Afrocentric Shares tendered in
terms of the Partial Offer
36.9% - 43.9% Sanlam shall be obliged to proceed with the 55.0% (inclusive) –
Transaction and accept all Afrocentric Shares 60.0% (inclusive)
tendered in terms of the Partial Offer, up to the
Maximum Shares Percentage
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43.9% - 64.8% Sanlam shall be entitled to elect whether or not to 60.0% - 74.9%
accept all or a portion of the Excess Acceptances
up to the Partial Offer Percentage, which shall not
exceed 64.8%
3.5. Offer Consideration
3.5.1. The consideration for the Offer Shares is R6.00 per Offer Share, payable either
in cash or in shares in Sanlam (“Sanlam Shares”) or a combination thereof, at
the election of each Afrocentric Shareholder, as follows:
3.5.1.1. cash in respect of 100% of the Afrocentric Shares tendered by such
Afrocentric Shareholder;
3.5.1.2. cash in respect of 50% and Sanlam Shares in respect of 50% of the
Afrocentric Shares tendered by such Afrocentric Shareholder; or
3.5.1.3. Sanlam Shares in respect of 100% of the Afrocentric Shares
tendered by such Afrocentric Shareholder.
3.5.2. Where an Afrocentric Shareholder has elected to receive the Offer Consideration
(or part thereof) in Sanlam Shares (“Consideration Share Election”), the
number of Sanlam Shares to be delivered to such Afrocentric Shareholder in
settlement will be calculated according to the following formula which, for the
avoidance of doubt, will result in Afrocentric Shareholders receiving no more than
1 Sanlam Share for every 10 Afrocentric Shares tendered in the Partial Offer:
X = R6.00 x Y
Z
where
X is the number of Sanlam Shares to be delivered;
Y is the number of Afrocentric Shares tendered pursuant
to the Consideration Share Election; and
Z is the higher of (i) the 30-day VWAP of Sanlam Shares
as at the last practicable date prior to implementation
of the Partial Offer and (ii) an amount of R60 (which
represents the price per Sanlam Share).
If the above calculation results in any fraction of a Sanlam Share being required
to be delivered, the relevant number of Sanlam Shares will be rounded down and
the shortfall will be paid to the Afrocentric Shareholder in cash.
3.5.3. Where an Afrocentric Shareholder accepts the Partial Offer but does not indicate
an election with regard to whether the Offer Consideration due to such Afrocentric
Shareholder must be settled in cash or Sanlam Shares, such Afrocentric
Shareholder shall be deemed to have elected to receive the Offer Consideration
in cash.
3.5.4. The Offer Consideration represents a premium of 49.01% to the 30-day VWAPof
an Afrocentric Share, and a premium of 55.84% to the closing price of an
Afrocentric Share (namely R3.85 per Afrocentric Share), on the JSE as at
7 October 2022.
3.6. Conditions Precedent
3.6.1. The Partial Offer is subject to the fulfilment or, where applicable, waiver of the
following Conditions Precedent:
3.6.1.1. sufficient Afrocentric Shareholders accepting the Partial Offer and
selling their Offer Shares to Sanlam, so that following the
implementation of the Partial Offer (and before the Asset for Share
Transaction) Sanlam holds no less than 36.9% of the Afrocentric
Shares;
3.6.1.2. independent Afrocentric Shareholders adopting an ordinary
resolution in terms of section 125(3)(b)(ii) of the Companies Act,
approving the making of the Partial Offer by Sanlam;
3.6.1.3. Afrocentric Shareholders adopting a special resolution in terms of
section 41(3) of the Companies Act and in respect of paragraph 9.20
of the Listings Requirements of the JSE, approving the issue by
Afrocentric of the Consideration Shares to Sanlam Life in terms of the
Asset for Share Transaction;
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3.6.1.4. all regulatory approvals required to implement the Transaction being
obtained, including:
3.6.1.4.1. all relevant competition authorities to which the
Transaction is notifiable as a merger granting such
approvals for the Transaction as may be required by
law, either unconditionally or subject to such
conditions as may be acceptable to (i) Sanlam in its
reasonable discretion in respect of any conditions
which are imposed on and/or will apply in respect of
Sanlam only, and/or (ii) Sanlam and Afrocentric in
their reasonable discretion in respect of any other
conditions;
3.6.1.4.2. the JSE granting such approvals for the Transaction
as may be required by law; and
3.6.1.4.3. the TRP having issued a compliance certificate in
respect of the Partial Offer as required in terms of
section 119(4)(b) and section 121(b) of the
Companies Act (“TRP Certificate Condition”);
3.6.1.5. all conditions to the agreement regulating the Asset for Share
Transaction, other than the condition relating to the Partial Offer
being implemented, being fulfilled or, if permitted, waived; and
3.6.1.6. no material adverse change in circumstances (“MAC”) having
occurred prior to the date upon which all Conditions Precedent, other
than this Condition Precedent and the TRP Certificate Condition, are
fulfilled or, if applicable, waived, in circumstances where the MAC has
or is reasonably likely to cause the EBITDA of Afrocentric to decrease
by more than 5%, when measured with reference to the comparable
EBITDA for the financial year ended 30 June 2022. For the purpose
of this paragraph 3.6.1.5, EBITDA means the earnings before
interest, taxes, depreciation and amortisation of Afrocentric
calculated in accordance with the International Financial Reporting
Standards.
3.6.2. The Conditions Precedent in paragraphs 3.6.1.1, 3.6.1.5 and 3.6.1.6 may be
waived by Sanlam. The Conditions Precedent in paragraphs 3.6.1.2 to 3.6.1.4
cannot be waived.
3.6.3. The Conditions Precedent must be fulfilled or, where applicable, waived by no
later than 2 May 2023 or such later date as Sanlam and Afrocentric may agree in
writing prior to 2 May 2023 (“Longstop Date”).
4. AHA FINANCIAL INFORMATION
4.1. The value of the net assets comprising A4S Shares as at 30 June 2022, being the date of the
last audited annual financial statements of Afrocentric, was R976.4 million, representing 28.7%
of AHA.
4.2. The audited profits after tax attributable to A4S Shares for the period ended 30 June 2022,
was R136.1 million, representing 28.7% of AHA, based on the audited annual financial
statements of Afrocentric for the year ending 30 June 2022, which were prepared in terms of
International Financial Reporting Standards.
5. PRO FORMA FINANCIAL INFORMATION
5.1. The value of the net assets as at 30 June 2022 and the comprehensive net income for the
year attributable to shareholders of AfroCentric for the year ended 30 June 2022 are R3 445.9
million and R314.3 million, respectively (“AfroCentric Financial Information”).
5.2. The AfroCentric Financial Information in this announcement has been extracted from
AfroCentric’s audited results for the year ended 30 June 2022, which were prepared in terms
of International Financial Reporting Standards.
5.3. The TRP has granted a dispensation that the pro forma financial information for AfroCentric,
as required in terms of regulation 101(7)(b)(iv) of the Takeover Regulations, will be contained
in the Circular. Accordingly, shareholders of Afrocentric are advised to exercise caution when
dealing in their Afrocentric Shares until the pro forma financial effects of the Transaction are
released in the Circular.
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6. TRANSACTION FUNDING AND BANK GUARANTEE AND CONFIRMATION OF AUTHORISED
SHARE CAPITAL IN SANLAM
6.1. The Offer Consideration which is required to be settled in cash will be funded by Sanlam from
available cash balances.
6.2. Sanlam has confirmed that it has (and will continue to have) sufficient authorized share capital
available from which to transfer Sanlam Shares to Afrocentric Shareholders who elect to
receive the Offer Consideration in the form of Sanlam Shares.
6.3. In compliance with regulations 111(4) and 111(5) of the Takeover Regulations, Sanlam has
furnished the TRP with an irrevocable bank guarantee (in a form approved by the TRP) issued
by Rand Merchant Bank, a division of FirstRand Bank Limited, a licensed bank in terms of the
Banks Act, 94 of 1990, in terms of which the guarantor undertakes to pay a maximum cash
consideration of R2 234 413 136 (two billion two hundred and thirty four million four hundred
and thirteen thousand one hundred and thirty six rand) in relation to the Partial Offer, should
Sanlam fail to do so. Payment under the written irrevocable bank guarantee is subject to the
Partial Offer becoming unconditional and being implemented in accordance with its terms and
conditions.
7. SHARES IN AFROCENTRIC HELD BY SANLAM AND/OR PERSONS ACTING IN CONCERT WITH
SANLAM
7.1. Neither Sanlam nor any persons acting in concert with Sanlam hold or control, directly or
indirectly, any beneficial interest in Afrocentric Shares.
7.2. Neither Sanlam nor any persons acting in concert with Sanlam hold any option to purchase
any beneficial interest in Afrocentric Shares.
7.3. Sanlam confirms that it is the ultimate prospective purchaser of the Afrocentric Shares and
that it is acting alone, and not in concert with, any other person in respect of the Partial Offer.
8. AFROCENTRIC INDEPENDENT BOARD, INDEPENDENT EXPERT AND INDEPENDENT
EXPERT’S REPORT AND FAIR AND REASONABLE OPINION
8.1. In accordance with the provisions of the Companies Act and the Takeover Regulations,
Afrocentric has established an independent board (“Independent Board”) for purposes of
assessing the terms of the Partial Offer, as well as advising Afrocentric Shareholders thereon.
The Independent Board comprises Bruno Fernandes (as lead independent director), Alice le
Roux, and Mmaboshadi Chauke.
8.2. The Independent Board has appointed BDO Corporate Finance (Proprietary) Limited, a
private company incorporated under the laws of South Africa with registration number
1983/002903/07, to act as independent expert, as required in terms of section 114(2) of the
Companies Act and Regulation 110 of the Takeover Regulations (“Independent Expert”), to
provide it with external advice in relation to the Partial Offer and to make appropriate
recommendations to the Independent Board in the form of a fair and reasonable opinion
(“Independent Expert’s Report”). The preliminary view of the Independent Expert is that the
Offer Consideration falls within the range of what constitutes a fair price. The Independent
Board of Afrocentric, constituted in accordance with the Companies Act, is of the preliminary
opinion that the Offer Consideration is fair and reasonable. The Independent Expert’s Report
as well as the Independent Board’s final opinion on the terms of the Partial Offer will be
detailed in the Circular referred to in paragraph 12 below.
9. RESTRICTIONS OUTSIDE SOUTH AFRICA
9.1. Any persons who are subject to the laws of any jurisdiction other than South Africa should
inform themselves about, and observe, any applicable requirements imposed by any such
jurisdiction. Any failure to comply with the applicable requirements may constitute a violation
of the securities laws of any such jurisdiction. It is the responsibility of any non-South African
Afrocentric Shareholder to satisfy themselves as to the full observation of the laws and
regulatory requirements of the relevant jurisdiction in connection with the Partial Offer,
including the obtaining of any governmental, exchange control or other consent or the making
of any filings which may be required, the compliance with other necessary formalities, or the
payment of any issue, transfer or other taxes or requisite payments due in such jurisdiction.
9.2. Any non-South African Afrocentric Shareholder who is in doubt as to their position, including,
without limitation, their tax status, should consult an appropriate independent professional
adviser in the relevant jurisdiction. The legality of the Partial Offer to persons resident in
jurisdictions outside of South Africa may be affected by laws of the relevant jurisdiction. Such
persons should satisfy themselves as to any applicable legal requirements that they are
obliged to observe. It is the responsibility of any such person wishing to accept the Partial
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Offer to satisfy themselves as to the full observance of the laws of the relevant jurisdiction in
connection therewith.
9.3. The Partial Offer is not being made, directly or indirectly, in or into any jurisdiction where it is
illegal for the Partial Offer to be made or accepted.
10. INFORMATION ABOUT AFROCENTRIC
10.1. Afrocentric group is a majority black-owned JSE-listed investment holding company which
operates in and provides specialised services to the public and private healthcare sectors,
making quality healthcare more accessible and affordable to members and beneficiaries in
both sectors. A principal objective of the group is to ensure the delivery of efficient health
management services, the distribution of quality products, all at manageable and affordable
cost, for the benefit of scheme clients, scheme members and the group’s growing customer
base in various new product lines being developed.
10.2. The Afrocentric group operates through three main clusters, namely the Services cluster,
Pharmaceutical cluster and Corporate Solutions cluster. The Services cluster substantially
comprises the medical scheme administration business. The Pharmaceutical cluster has a
presence across manufacturing, wholesale and retail of drugs and multi-vitamins. The
Corporate Solutions cluster comprises various entities that support the overall aim of offering
uniquely integrated, employee-focused health and wellness solutions to corporate and
institutional clients.
10.3. The Afrocentric group operates in South Africa, Botswana, Mauritius and Namibia.
11. INFORMATION ABOUT THE SANLAM GROUP
11.1. Sanlam is a pan-African financial services group listed on the Johannesburg, Namibian and
A2X stock exchanges. Through its clusters: Life and Savings encompassing Retail Mass,
Retail Affluent and Corporate business units; Sanlam Emerging Markets; Sanlam Investment
Group; and Santam, the Group provides comprehensive and bespoke financial solutions to
institutional clients and consumers across all market segments. Sanlam’s areas of expertise
include life and general insurance, financial planning, retirement, investments, and wealth
management.
11.2. Established in 1918 as a life insurance company, Sanlam has evolved into the largest non-
banking financial services group in Africa through its diversification strategy.
11.3. Headquartered in South Africa, Sanlam has a direct stake in financial services entities in
Namibia, Botswana, Swaziland, Zimbabwe, Mozambique, Mauritius, Malawi, Zambia,
Tanzania, Rwanda, Uganda, Kenya, and Nigeria. The Group has a footprint of insurance
operations in Morocco, Angola, Algeria, Tunisia, Ghana, Niger, Mali, Senegal, Burkina Faso,
Cote D’Ivoire, Togo, Benin, Cameroon, Gabon, Madagascar, Burundi, and Lesotho.
11.4. Sanlam also has business interests in India, Malaysia and the United Kingdom and a niche
presence in selected developed markets.
12. CIRCULAR POSTING DATE
12.1. Afrocentric Shareholders are advised that it is anticipated that the Circular, containing the full
details of the terms of the Transaction and convening the General Meeting, will be posted by
no later than 8 December 2022, subject to any extension granted by the TRP and / or the JSE.
12.2. Afrocentric Shareholders will be advised of the posting of the Circular and the opening of the
Partial Offer by means of a SENS announcement.
12.3. The Partial Offer will remain open for acceptance for at least 30 business days after the
opening date of the Partial Offer, and at least 10 business days after the Partial Offer has
been declared wholly unconditional. Sanlam shall be entitled to extend the closing date of the
Partial Offer.
13. RESPONSIBILITY STATEMENTS
13.1. The Independent Board, individually and collectively, accepts responsibility for the information
contained in this announcement insofar as it relates to Afrocentric. In addition, the
Independent Board confirms that, to the best of its knowledge and belief, the information
contained in this announcement, as it relates to Afrocentric, is true and correct and, where
appropriate, does not omit anything that is likely to affect the importance of the information
contained herein pertaining to Afrocentric and that all reasonable enquiries to ascertain such
information have been made.
13.2. The Afrocentric Board, individually and collectively, accepts responsibility for the information
contained in this announcement insofar as it relates to Afrocentric. In addition, the Afrocentric
Board confirms that, to the best of its knowledge and belief, the information contained in this
announcement, as it relates to Afrocentric, is true and correct and, where appropriate, does
9
not omit anything that is likely to affect the importance of the information contained herein
pertaining to Afrocentric and that all reasonable enquiries to ascertain such information have
been made.
13.3. The board of directors of Sanlam (“Sanlam Board”), individually and collectively, accepts
responsibility for information contained in this announcement insofar as it relates to Sanlam.
In addition, the Sanlam Board certifies that to the best of its knowledge and belief, the
information contained in this announcement as it relates to Sanlam, is true and correct and,
where appropriate, does not omit anything that is likely to affect the importance of the
information contained herein pertaining to Sanlam and that all reasonable enquiries to
ascertain such information have been made.
14. CATEGORISATION OF THE TRANSACTION
14.1. The Asset for Share Transaction constitutes a category 1 transaction for Afrocentric in terms
of the Listings Requirements of the JSE and is required to be approved by Afrocentric
Shareholders.
14.2. The Circular will incorporate the required provisions and disclosures which are required by the
Listings Requirements of the JSE in respect of the Asset for Share Transaction.
14.3. It is anticipated that the Circular and notice of general meeting, containing the full details of
the terms of the Partial Offer and the Asset for Share Transaction, response by the Afrocentric
Independent Board to the Partial Offer, and Transaction disclosure (required both in terms of
the Takeover Regulations and in respect of a category 1 transaction under the Listings
Requirements of the JSE) will be posted by no later than 8 December 2022, subject to any
extension granted by the TRP and / or the JSE.
By order of the Afrocentric Board
Johannesburg
11 October 2022
Transaction Advisor to Afrocentric
Investec Bank Limited
Transaction Sponsor to Afrocentric
Investec Bank Limited
Legal adviser to Afrocentric
Norton Rose Fulbright South Africa
Independent Expert to Afrocentric
BDO Corporate Finance Proprietary Limited
By order of the board of directors of Sanlam Limited
Johannesburg
11 October 2022
Exclusive Financial Adviser to Sanlam Limited
Rand Merchant Bank, a division of FirstRand Bank Limited
Legal adviser to Sanlam Limited
ENSafrica
Transaction Sponsor to Sanlam Limited
Rand Merchant Bank, a division of FirstRand Bank Limited
