IOOF SUBMITS PROPOSAL TO ACQUIRE THE TRUST COMPANY LIMITED

Transcription

1 Level 6, 161 Cllins Street GPO Bx 264 Melburne VIC 3000 Melburne VIC 3001 Phne September 2013 IOOF SUBMITS PROPOSAL TO ACQUIRE THE TRUST COMPANY LIMITED IOOF Hldings Limited (ASX:IFL) ( IOOF ) has submitted a prpsal t acquire 100% f the shares in The Trust Cmpany Limited (ASX:TRU) ( Trust ) by way f a Scheme f Arrangement (the IOOF Prpsal ). IOOF believes its Prpsal t be superir t the current ffer fr Trust by Perpetual Limited ( Perpetual Offer 1 ) and that it represents an attractive premium fr Trust sharehlders. Under the IOOF Prpsal, Trust sharehlders will receive: share cnsideratin f 0.74 IOOF shares per Trust share ( IOOF Share Cnsideratin 2 ) r guaranteed minimum cash cnsideratin; and a special dividend f $0.22 per Trust share ( Special Dividend ) (expected t be fully franked). The guaranteed minimum cash cnsideratin will be the higher f $6.03 r the cash equivalent value f the IOOF Share Cnsideratin ( Guaranteed Minimum Cash Cnsideratin ). In additin, IOOF supprts Trust sharehlders receiving an interim dividend frm Trust f up t $0.17 per share (which may be franked) which the Trust Bard may wish t declare in Octber 2013 ( Interim Dividend ). IOOF Prpsal Share Cnsideratin alternative 3 Guaranteed Minimum Cash Cnsideratin alternative 4 Share Cnsideratin (r better) Special Dividend Cnsideratin value (r better) Trust Interim Dividend (up t) 0.17 (up t) 0.17 Value t Trust sharehlders (r better) Key Highlights f the IOOF Prpsal: Enhances the psitin f the cmbined cmpany as the secnd largest trustee crpratin in Australia 5 and is expected t deliver significant value t bth Trust and IOOF sharehlders Cnsistent with IOOF s stated strategy f grwth thrugh value accretive acquisitins Creates an pprtunity fr Trust sharehlders t wn shares in a leading independent financial services cmpany with: diversified earnings, increased scale and liquidity a strng track recrd f delivering significant sharehlder returns 1

2 Materially exceeds the Perpetual Offer and prvides a value in excess f the $ $6.29 per share range assessed by the Independent Expert, Lnergan Edwards & Assciates, as appinted by the Trust Bard. Mr Christpher Kelaher, IOOF s Managing Directr said: Our Prpsal t Trust will deliver superir value and greater certainty t Trust sharehlders. Under the IOOF Prpsal, Trust sharehlders are able t receive cnsideratin either in cash r in IOOF shares, may receive additinal franked dividends and will have an ffer that is in excess f Trust s Independent Expert s valuatin range. Imprtantly, ur Prpsal is nt cnditinal n ACCC apprval. Trust sharehlders wh elect t receive IOOF share cnsideratin will benefit frm future participatin in the IOOF Grup including its strng fiduciary heritage, diversified earnings, significant scale and increased liquidity. Since IOOF s acquisitin f Australian Wealth Management in April 2009, IOOF has delivered superir ttal sharehlder returns f ver 147%, significantly exceeding the ttal sharehlder returns f mst f its cmpetitrs. Trust s business will prvide increased scale t IOOF s existing Trustee and Estates business, Australian Executr Trustees Limited, with the Trust Services divisin f the cmbined business expected t cntribute 13% 6 f Underlying NPAT fllwing the transactin. The expanded grup will be psitively psitined t take advantage f future grwth pprtunities thrugh targeting grwth markets, such as trustee services catering fr native title trusts and natinal disability trusts. The acquisitin f Trust builds n IOOF s integrated business mdel and strategy t grw thrugh strategically attractive and value accretive acquisitins. IOOF has a strng track recrd f successfully integrating acquired businesses and extracting synergies. The IOOF Prpsal is expected t generate synergies f at least $14 millin per annum thrugh the eliminatin f duplicated activities and csts, and is anticipated t be EPS accretive in the first full year pst acquisitin. The Offer Under the IOOF Prpsal, Trust sharehlders will receive: the IOOF Share Cnsideratin f 0.74 IOOF shares per Trust share r the Guaranteed Minimum Cash Cnsideratin; and the Special Dividend f $0.22 per Trust share (expected t be fully franked). The Guaranteed Minimum Cash Cnsideratin will be the higher f $6.03 r the cash equivalent value f the IOOF Share Cnsideratin. The Guaranteed Minimum Cash Cnsideratin will be subject t a maximum cap f $100 millin f ttal cash t be paid by IOOF and will be scaled back prprtinally if ttal demand fr the Guaranteed Minimum Cash Cnsideratin exceeds $100 millin s that electing Trust sharehlders will receive the balance f their cnsideratin as IOOF Share Cnsideratin. In additin, IOOF supprts Trust sharehlders receiving an Interim Dividend frm Trust f up t $0.17 per share (which may be franked) which the Trust Bard may wish t declare in Octber Under the Perpetual Offer payment f an Interim Dividend is nt permitted. A Superir Prpsal In IOOF s view, the IOOF Prpsal is superir t the Perpetual Offer in the fllwing respects: higher price per Trust share (currently equivalent t $6.56 per share); 2

3 Guaranteed Minimum Cash Cnsideratin alternative (equivalent t n less than $6.25 per share). Sharehlders electing cash will als receive the upside frm a psitive mvement in IOOF s share price; the IOOF Prpsal is nt cnditinal n ACCC apprval; allws Trust, if the Bard f Trust wishes, t pay an Interim Dividend f up t $0.17 per share (which may be franked). Including this Interim Dividend the IOOF Prpsal has a ttal equivalent value f $6.73 per share representing an attractive premium f 41.7% t the clsing share price f Trust n 20 February 2013, the date f the last unaffected trading in Trust shares prir t the annuncement by Equity Trustees Limited f a takever ffer fr Trust; and a substantially higher ttal available cash pl f $100 millin cmpared with $60 millin under the Perpetual Offer. A cmparisn f the IOOF Prpsal with the Perpetual Offer based n vlume weighted average prices fr bth cmpanies ver a 1 mnth perid is shwn belw. IOOF Prpsal Share Cnsideratin alternative 3 Guaranteed Minimum Cash Cnsideratin alternative 4 Perpetual Offer 7 Share Cnsideratin (r better) 5.84 Special Dividend Cnsideratin value (r better) 6.06 Trust Interim Dividend (up t) 0.17 (up t) Value t Trust sharehlders (r better) 6.06 Premium t Perpetual Offer % 11.0% 5.9% n/a Based n the clsing prices f IOOF and Perpetual n 30 August , the IOOF Prpsal is valued at $6.68 per Trust share and the Perpetual Offer is valued at $5.97 per Trust share. Benefits fr Trust sharehlders The IOOF Prpsal will be attractive t Trust sharehlders fr a number f reasns including: Attractive premium: Based n IOOF s 1 mnth vlume weighted average price f $8.57 the current ttal implied value f the IOOF Prpsal wuld prvide Trust sharehlders with $6.73 per Trust share, representing an attractive premium f 41.7% t the Trust share price n 20 February Trust sharehlders wh are able t capture the benefit f any franking credits attached t the $0.22 Special Dividend and Interim Dividend will realise additinal value; Value in excess f the Independent Expert s range: The value per Trust share under the IOOF Prpsal f $6.73 exceeds the value f Trust shares f $ $6.29 as assessed by the Independent Expert Lnergan Edwards & Assciates appinted by the Bard f Trust in cnnectin with the takever frm Equity Trustees Limited, partly because synergies frm the IOOF Prpsal are anticipated t be at least $14 millin per annum pre-tax; IOOF shares are attractive: Trust sharehlders wh elect t receive the IOOF Share Cnsideratin will receive a number f additinal benefits including; 3

4 Timing participatin in a Cmpany with diversified earnings, a strng track recrd f delivering attractive returns t sharehlders and paying fully franked dividends with a target payut rati f 60-90% f underlying earnings; highly liquid shares with a 12 mnth annual market turnver f ~76%; and IOOF is currently included within the ASX Tp 100 listed cmpanies by market capitalisatin and accrdingly IOOF shares are expected t be included within the S&P/ASX 100 Index in the cming weeks which it is anticipated will enhance investr demand fr IOOF shares. Guaranteed Minimum Cash Cnsideratin prvides greater certainty: Trust sharehlders will have the ptin t receive a ttal f at least $6.42 based n Guaranteed Minimum Cash Cnsideratin plus the Special Dividend and Trust Interim Dividend. If the IOOF share price increases, Trust sharehlders will receive mre cash under the cash alternative; Lw Cnditinality: Due diligence n Trust was cmpleted by IOOF in May 2013 s the IOOF Prpsal is nt cnditinal n due diligence. The IOOF Prpsal als des nt cntain a cnditin precedent requiring ACCC apprval; and Strng Fiduciary Heritage: IOOF has a strng fiduciary heritage. IOOF s wn trustee business, Australian Executr Trustees, is highly cmplementary with Trust. The IOOF Prpsal will prvide Trust s clients with access t a larger Trustee business and a brader range f wealth management prducts and services. The emplyees f Trust may als benefit frm enhanced career and develpment pprtunities acrss IOOF s enlarged Trustee business and acrss the brader IOOF Grup. IOOF has submitted t the Trust Bard a Scheme Implementatin Agreement ( IOOF SIA ) by which the IOOF Prpsal wuld be effected. The IOOF SIA is almst identical t that signed by Trust and Perpetual n 7 May 2013 (the Perpetual SIA ). The nly differences t the Perpetual SIA are intended t reflect the change f parties, the imprved cnsideratin and the lwer cnditinality f the IOOF Prpsal. The IOOF Prpsal is capable f immediate acceptance by Trust and remains pen fr acceptance until 9:00 am n Saturday 7 September T accept the IOOF Prpsal, Trust needs nly t execute and deliver t IOOF the IOOF SIA and annunce t the ASX that the Trust Directrs unanimusly recmmend the IOOF Prpsal, in the absence f a superir prpsal. IOOF ntes that Trust may be required, r may prpse, t allw Perpetual three business days t prvide a matching r superir prpsal. IOOF has requested that the Bard f Trust take advice urgently frm its legal and financial advisrs and determine urgently whether in its view the IOOF Prpsal is superir t the Perpetual Offer, and advise Perpetual and IOOF f its view. IOOF believes that, amngst ther things, t match the IOOF Prpsal, Perpetual wuld have t remve the ACCC cnditin precedent in its ffer s that Perpetual takes the risk that the ACCC may require Perpetual t sell the Trust business, r any part theref (thereby mving the ACCC risk frm Trust sharehlders t Perpetual sharehlders). If the IOOF Prpsal is accepted by the Trust Bard f Directrs by 9:00 am 7 September 2013, IOOF envisages that a Scheme Meeting f Trust sharehlders will be held in Nvember 2013 t vte n the IOOF Prpsal. 4

5 IOOF has appinted Nmura as its financial adviser and Crrs Chambers Westgarth as its legal adviser. Fr further infrmatin please cntact: IOOF Investr Relatins & Media Melinda Hfman Crprate Affairs Manager IOOF Hldings Limited (02)

6 Abut IOOF Hldings Limited The IOOF Grup is ne f Australia s largest independent prviders f wealth creatin prducts and services with ffices in every state. The Grup ffers the fllwing services: Wealth Management Superannuatin Investment Management Asset Management Estate Planning Crprate Trust The Grup s prducts and services are designed t accmpany the lives f apprximately 650,000 Australians frm wealth accumulatin int retirement and acrss t the next generatin. At 30 June 2013, IOOF had $120.2 billin in Funds Under Management, Administratin Advice, and Supervisin. IOOF perates under a variety f brands including Australian Executr Trustees (AET), Bridges Financial Services, Cnsultum Financial Advisers, Lnsdale Financial Grup, My Adviser, Perennial Investment Partners Limited, Spectrum Super, Pursuit, Plan B Wealth Management, Wealth Builder and Ord Minnett. 1 Terms f the Perpetual Offer as cntained in the Scheme Implementatin Agreement signed by Perpetual Limited and Trust n 7 May The IOOF Share Cnsideratin will be calculated with reference t the exchange rati f 0.74 IOOF shares fr each Trust share and the vlume weighted average price per IOOF share ver the five trading days fllwing the date the Scheme becmes effective x the IOOF 1 mnth vlume weighted average price f $8.57 as f 30 August 2013, plus the Special Dividend f $0.22 per share plus an Interim Dividend f $0.17 per share. IOOF has declared a dividend f $0.225 fr which the recrd date is 24 September The IOOF Prpsal will nt be cncluded prir t 24 September, hence Trust sharehlders will nt receive this dividend. 4 The higher f $6.03 r 0.74 x the IOOF 1 mnth vlume weighted average price f $8.57 as f 30 August 2013, plus the Special Dividend f $0.22 per share plus an Interim Dividend f $0.17 per share. 5 Measured by ttal funds under supervisin fr trustee crpratins. 6 Excludes synergies, assessed t be at least $14m per annum x the Perpetual 1 mnth vlume weighted average price f $39.08 as f 30 August 2013, plus a special dividend f $0.22 per share. 8 IOOF clsing price f $8.50 and Perpetual clsing price f $38.45 as f 30 August