Upon the completion of the Acquisition of Shares, MAAKL Mutual will become a wholly-owned subsidiary of MANULIFE.

Transcription

1 MANULIFE HOLDINGS BERHAD TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS) NON-RELATED PARTY TRANSACTIONS MANULIFE HOLDINGS BERHAD ("MANULIFE" OR "THE COMPANY")- ACQUISITION OF 6,000,000 ORDINARY SHARES OF RM1/- EACH IN MAAKL MUTUAL BERHAD ( MAAKL MUTUAL ), REPRESENTING THE ENTIRE ISSUED AND PAID UP ORDINARY SHARE CAPITAL OF MAAKL MUTUAL 1. INTRODUCTION The Board of Directors of MANULIFE is pleased to announce that the Company has on 13 November 2013 entered into a conditional share purchase agreement ( SPA or the Agreement ) with MAA Corporation Sdn. Bhd. ( MAA Corp ), Khyra Liberty Sdn. Bhd. ( Khyra ), Edmond Cheah Swee Leng, Nge Koh Nguong and Wong Boon Choy (collectively known as the Vendors ) to acquire 6,000,000 Ordinary Shares of RM1/- each in MAAKL Mutual ("Sale Shares"), representing the entire issued and paid up ordinary share capital of MAAKL Mutual, for a total cash consideration of RM96,475,000/- (Ringgit Malaysia: Ninety Six Million Four Hundred and Seventy Five Thousand only) ( the Acquisition of Shares ) from the Vendors. Upon the completion of the Acquisition of Shares, MAAKL Mutual will become a wholly-owned subsidiary of MANULIFE. 2. DETAILS OF THE ACQUISITION OF SHARES 2.1 Information on MAAKL Mutual MAAKL Mutual is a public company limited by shares and was incorporated on 16 October 2000 under the Companies Act The authorised share capital of MAAKL Mutual is RM10,001,800/-, divided into 9,000,000 Ordinary Shares of RM1/- each and 1,001,800 Redeemable Preference Shares of RM1/- each of which 6,000,000 Ordinary Shares of RM1/- each have been issued and paid up. MAAKL Mutual is a mutual funds platform and agency distribution company. The immediate holding company of MAAKL Mutual is MAA Corp and the ultimate holding company is MAA Group Berhad ( MAAG ), a company listed on the Main Market of Bursa Malaysia Securities Berhad. The financial information on MAAKL Mutual based on its latest audited consolidated financial statements for the financial year ended 31 December 2012, is as follows:- As at 31 December 2012 (RM 000) Revenue 38,031

2 Profit before taxation 2,523 Net profit attributable to equity holder of MAAKL Mutual 2,059 Net assets 17, Information of Vendors MAA Corp, a private company limited by shares incorporated under the Companies Act, 1965, is a wholly-owned subsidiary of MAAG. The authorised share capital of MAA Corp is RM70,500, comprising 50,000,000 ordinary shares of RM1.00 each and 20,500,000 redeemable preference shares of RM1.00 each with an issued and paid-up share capital of RM55,366, comprising 44,000,000 ordinary shares of RM1.00 each and 11,366,282 redeemable preference shares of RM1.00 each. The company is principally involved in investment holding and provision of property management services. Khyra, a private company limited by shares incorporated under the Companies Act, 1965, is the ultimate beneficial owner is Khyra Legacy Berhad ( KLB ), a public company limited by guarantee. The founder of KLB is Tunku Dato Ya acob. The company is principally involved in investment holding. Edmond Cheah Swee Leng, a Malaysian citizen. Nge Koh Nguong, a Malaysian citizen. Wong Boon Choy, a Malaysian citizen. 2.3 Basis of Purchase Consideration and Source of Funding The purchase consideration for the Acquisition of Shares shall be satisfied by cash of RM96,475,000/- (Ringgit Malaysia: Ninety Six Million Four Hundred and Seventy Five Thousand only). The purchase consideration comprises of the following to be paid in the manner set out below: RM71,150,312/- (Ringgit Malaysia: Seventy One Million One Hundred Fifty Thousand Three Hundred and Twelve only) ("Initial Consideration") to be paid on the date of completion of the SPA ("Completion Date") to the Vendors based on their respective shareholding proportions in MAAKL Mutual;

3 RM19,295,000/- (Ringgit Malaysia: Nineteen Million Two Hundred Ninety Five Thousand only) ("Balance Consideration") to be paid on the date of completion of the SPA to an escrow agent who shall hold the Balance Consideration in escrow. The escrow agent shall release the Balance Consideration or part thereof on the following basis: (i) if there is a claim under the warranties or the indemnities in the SPA, pay such amount of the claim as may have been agreed between the parties to MANULIFE; (ii) (iii) on the date falling on the 24th month of the Completion Date ("2nd Anniversary Date"), pay the remaining Balance Consideration and accrued interest to the Vendors based on their respective shareholding proportions; and if any portion of the Balance Consideration is the subject of a claim and is still in dispute on or before the 2nd Anniversary Date, the escrow agent shall continue to hold such monies until a court has issued an order deciding on the dispute; and RM6,029,688/- (Ringgit Malaysia Six Million Twenty Nine Thousand Six Hundred Eighty Eight) (or such other sum) to be paid on 31 March 2015, 31 March 2016 and 31 March 2017 (or such later date(s)) subject to MAAKL Mutual achieving the agreed targets. The purchase consideration for the Acquisition of Shares was arrived at on a willing buyer-willing seller after taking into consideration of the potential earnings of MAAKL Mutual. The Acquisition of Shares will be funded through internally generated funds. There are no liabilities, including contingent liabilities and guarantees to be assumed by MANULIFE arising from the Acquisition of Shares. 3. RATIONALE FOR THE ACQUISITION OF SHARES Manulife Asset Management Services Berhad ( MAMSB ), a wholly owned subsidiary of MANULIFE, is responsible for the growth and development of its asset management operation. MANULIFE is desirous of broadening its businesses across the demographic and ethnic customer segments in Malaysia and MAAKL Mutual has successfully built a unit trust business that permeates Malaysian society. MAAKL Mutual is an established mutual funds platform and its agency distribution is a highly complementary business model to that currently operated by MAMSB. The combined businesses can expect to benefit from accretive revenues from insurance and pension product lines, an expanded

4 and broadened product platform offers revenue and earnings opportunities for Manulife. Furthermore, most of the investment management responsibility for MAAKL s funds will be transferred to MAMSB, subject to regulatory approval, allowing Manulife to achieve scale augmenting the existing organic growth plan of its investment franchise. While MANULIFE offers MAAKL Mutual the opportunity to execute its business strategy by growing agency distribution by leveraging MAMSB access to global and regional expertise. 4. PROSPECTS AND RISK FACTORS 4.1 Industry Overview and Prospect Overview on the Asset Management Industry The global economy is currently experiencing a soft patch, impacted by the US budget tightening, rebalancing of China s GDP drivers and continued uncertainties in the Eurozone s economy. The Company views this weakness to be transitory as fiscal discipline works its way through these economies. The Company believes the global economy is in a stronger footing compared to a year ago and global central banks accommodative monetary policies will continue to support a gradual economic recovery. As for Malaysia, the Company expects the market to play catch up with the regional markets on the back of its relative underperformance and under-owners hip (by foreign investors) relative to its regional counterparts. Stocks that will benefit from the Government s Economic Transformation Program (ETP) and the global economic recovery will be in focus. For the bond market, the Company expects the current ultra-loose monetary policies by global Central Banks to underpin demand for bonds, especially in investment grade countries like Malaysia where yields are still relatively more attractive. Today s asset management industry is marked by increased competition, heightened regulatory scrutiny and growing customer demands for more information and greater transparency all set against the backdrop of a volatile market. Investment markets will always have ups and downs but, as MAAKL s success demonstrates, there is clearly a market need for professional advice and retirement planning that emphasizes a long-term approach to investing. The Directors of MANULIFE expect the Company to benefit from the Acquisition of Shares by increase of revenue and synergy in asset management operation. The Acquisition of Shares is one of the expansion plans of the Group.

5 4.2 Risk Factors The Acquisition of Shares is subject to various risk factors which include amongst others, the completion risks of the SPA, general business and specific risks in relation to licensing and/or branding, impact of government policies and regulation on accessibility. 5. EFFECT OF THE PROPOSED ACQUISITION OF SHARES 5.1 Share Capital and Shareholding Structure of the Substantial Shareholders The Acquisition of Shares will not have any effect on the issued and paid-up share capital and shareholding structure of the major shareholders of MANULIFE as it does not involve any allotment or issuance of new ordinary shares of MANULIFE. 5.2 Net assets The Acquisition of Shares will not have any material effect on the consolidated net assets of MANULIFE. 5.2 Earnings The Acquisition of Shares will not have any material effect on the earnings of MANULIFE for the year ended 31 December However, it is expected to contribute positively to the future earnings of MANULIFE in the longer term. 5.3 Gearing The Acquisition of Shares has no effect on the gearing of MANULIFE. 6. APPROVALS REQUIRED The Acquisition of Shares is not subject to the approval of the Company s shareholders as the highest percentage ratio applicable to the Acquisition of Shares pursuant to paragraph 10.02(g) of Bursa Malaysia Securities Berhad Main Market Listing Requirements is 13.9% based on the latest audited financial statements of MANULIFE for the financial year ended 31 December Completion of the Acquisition of Shares is subject to the satisfaction of the conditions precedent set out in the SPA (which conditions have also been set out in section 8.2 below).

6 7. INTEREST OF DIRECTORS, SUBSTANTIAL SHAREHOLDERS AND CONNECTED PERSONS None of the directors and/or substantial shareholders of MANULIFE as well as persons connected with them have any interest, direct and/or indirect in the Acquisition of Shares. 8. SALIENT TERMS OF THE SPA The salient terms of the SPA entered into between MANULIFE and the Vendors of the Acquisition of Shares are as follows: 8.1 Sale of the Sale Shares Subject to the terms of the SPA, each of the Vendors shall sell as legal and beneficial owner of the Sale Shares and MANULIFE shall purchase the Sale Shares free from all encumbrances and together with all rights attaching to the Sale Shares. MANULIFE shall not be obliged to complete the purchase of any of the Sale Shares unless the purchase of all of the Sale Shares is completed simultaneously. 8.2 Conditions Precedent The SPA is conditional upon the following: (a) (b) (c) (d) the Vendors obtaining all necessary consents (including from any third parties or any governmental authority) for the Acquisition of Shares by the Company; the Company obtaining all necessary consents all (including from any third parties or any governmental authority) for the Acquisition of Shares; the approval of the Securities Commission having been obtained by MAAKL Mutual (including the approval for a change to the controller (as defined in the Licensing Handbook issued by the Securities Commission) of MAAKL Mutual upon the completion of this Agreement and any other requirements required to be complied with by the Securities Commission). It is anticipated that the Vendors will procure for this to be submitted by 14 November 2013; and the notification by the Vendors to the Employees Provident Fund ("EPF") of a change of control and/or shareholding in MAAKL Mutual and a change of control of the EPF approved funds managed by MAAKL Mutual. It is anticipated that the Vendors will procure for this to be submitted by 14 November (each, a "Condition" and collectively, "Conditions"). The Conditions shall be fulfilled prior to 5.00pm on the date of expiry of a 90- day period from the date of the SPA.

7 8.3 Completion At completion, the Vendors shall: (a) deliver or cause to be delivered: (i) (ii) (iii) (iv) (iv) the share transfer forms relating to the Sale Shares together with the related original share certificates; a copy of the latest audited financial statements of MAAKL Mutual; all the statutory and other books and records of MAAKL Mutual, its certificate of incorporation, current business registration certificate, common seal, and any other papers, records and documents of MAAKL Mutual (unless such books and records are in the possession of MAAKL Mutual); a copy of the resolution of the board of directors of MAAKL Mutual approving the transfer of the Sale Shares (subject to stamping of the share transfer forms), cancellation of the existing share certificates of the Vendors and issuing new certificates in favour of MANULIFE, revocation of the existing authorities to the bankers of MAAKL Mutual and giving authority to persons nominated by MANULIFE, the resignation of the company secretary and the change of the registered office of MAAKL Mutual; and such other documents as may be required to give MANULFIE good title to the Sale Shares and to enable MANULIFE to become the registered holders; and (b) cause: (i) (ii) such persons as shall be nominated by MANULIFE to be appointed as directors, and cause specified persons to resign from their respective offices; and the company secretary of MAAKL Mutual to resign from its office. At completion, MANULIFE shall: (a) (b) pay the Initial Consideration to the Vendors by telegraphic transfer to their respective bank accounts; and pay the Balance Consideration to the escrow agent.

8 9. DOCUMENTS FOR INSPECTION The signed SPA will be made available for inspection by the members of the Company at its registered address at 12 th Floor, Menara Manulife, 6 Jalan Gelanggang, Damansara Heights, Kuala Lumpur during business hours from Mondays to Fridays (except Public Holidays) for a period of three (3) months from the date of this announcement. 10. ESTIMATION TIME FRAME TO COMPLETE THE ACQUISITION The Acquisition of Shares is expected to be completed within 90 days from 13 November STATEMENT BY THE BOARD OF DIRECTORS The Board of Directors, having considered all aspects of the Acquisition of Shares, is of the view that the Acquisition of Shares is in the best interest of MANULIFE. This announcement is dated 13 November 2013.