Sanlam issues shares to pay for Saham

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Sanlam issues shares to pay for Saham

Published Date: 2018-03-28 | Source: Stephen Gunnion | Author: Stephen Gunnion

Sanlam issues shares to pay for Saham

Sanlam says partly funding the deal with equity will allow it to maintain a conservative level of leverage

Sanlam plans to place shares worth R5.7 billion with institutional investors to help fund its buyout of Saham Finance, the African and Middle Easter financial services group it agreed to buy earlier this month.

In a statement after the close of trade yesterday, Sanlam said it and short-term insurance subsidiary Santam had agreed to acquire an additional 53.4% shareholding in the Moroccan general insurer, increasing their ownership to 100%. The stake is held via Sanlam Emerging Markets Ireland (SEMIL). SEMIL first acquired a 30% stake in Saham two years ago and bought a further 16.6% last year. It's paying $1.05 billion for the remainder.

Buying Saham will extend Sanlam's operations to more than 32 countries across Africa. It is considering adding life insurance to Saham's business.

Sanlam said the net proceeds from the placing would be used to part-fund the deal. Had the acquisition been implemented at the end of last year, its group solvency ratio would have reduced by approximately 0.13 times form the 2.18 times cover ratio on 31 December. It said using some equity to fund the deal would allow it to maintain a conservative level of leverage.

It said the placing would be conducted through an accelerated bookbuild process, with JP Morgan and Deutsche Bank acting as joint global coordinators and bookrunners. The placing price would be decided at the close of the bookbuild.

Sanlam's shares closed 0.3% lower at R91.61 yesterday.



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