Liberty Life to buy out Stanlib minorities

Liberty Life is pleased to announce that, subject to shareholder and regulatory approval, it intends acquiring the remaining 62.6% stake in Stanlib from Standard Bank and Quantum Leap Investments. If approved, the transaction would be effective 1 January 2007.
 
The purchase consideration in respect of the 62.6% of Stanlib not already owned by Liberty Life is R1.565billion, of which some 53% will be settled in cash, and 47% by the issue of new Liberty Group shares. The transaction places an enterprise value of R3.380billion on Stanlib.
 
Once the transaction is concluded, Liberty will own 100% of Stanlib.
 
Chief Executive comments
 
Commenting on the transaction, Liberty Life Chief Executive Bruce Hemphill said he was delighted with the deal, which would enhance Liberty's ability to compete effectively with a more comprehensive offering.
 
"We are bringing together two highly successful companies with complementary strengths, and removing inefficiencies in our current structure. This will allow us to maximise opportunities created by the recent shift from on-balance sheet to off-balance sheet investment products."
 
"From a consumer perspective, we are expanding our market offering and pooling our expertise, to serve a wider range of customers from a combined product and service platform." 
 
Rationale for acquiring Stanlib
 
Improved value proposition
The deal enables the Liberty Group to combine the specialist life insurance skills of Liberty Life with the investment expertise of Stanlib, to provide a broader wealth offering. Greater collaboration between Liberty Life and Stanlib will remove inefficiencies and enable the Group to compete more effectively, which should enhance shareholder value.
 
Meet changing customer needs
Consumers are increasingly demanding flexibility, accessibility and investment choice, which has resulted in a strong flow of funds to collective investment managers. Liberty Life has been at a competitive disadvantage without fully owning Stanlib. This will now be rectified.
 
Business growth opportunities
In the retail market, the transaction achieves better alignment of the two companies marketing and sales strategies, enabling both to offer a full suite of products. It also serves to expand the distribution network of both companies, and allows for the positioning of a co-ordinated product set, investment view, charge structure and marketing message. It should also improve business retention at maturity.
 
In the institutional and large retirement funds investment market, where Liberty Group has historically been under-represented, a combined marketing strategy and full range of product solutions - including segregated asset management capability, retirement benefit administration, risk benefits and annuity products - offer significant opportunities to grow market share. 
 
In summary

Liberty CE Bruce Hemphill concludes, "Basically, we believe this deal creates a very strong player in the business of building and protecting wealth. As an added bonus we believe we can achieve this with little or no disruption to our existing business operations. The combined talent of the people in the respective companies is exceptional and we believe this will be our biggest competitive advantage."
 
"This is an exciting and vital step in building a platform for Libertys expansion into the broader wealth arena."
 
"We also believe that the deal strikes a very fair balance for all parties: the issue of shares to Standard Bank and to our BEE partners underscores their confidence in Libertys future, and in our ability to unlock value through the acquisition of Stanlib." 

Conference Call

Liberty Life will host a conference call for interested parties at 17.00 SA time, 15.00 UK time and 10.00 US time on the 6th December 2006.  The call will include a brief introduction and overview of the Stanlib transaction and an opportunity for questions.  Interested parties who wish to participate in the conference call should dial the following numbers:
 
SA participants:
Toll                          011 535 3600
Toll-free                   0800 200 648
 
UK participants:
Toll-free                   0800 917 7042
 
US
Toll-free                   1 800 860 2442
Toll                          1 412 858 4600
 
A play-back option will be available for one week following the tele-conference on the following numbers:
 
Code:  2641#
 
SA participants:    011 305 2030
UK participants:    0808 234 6771
US participants:  1 412 317 0088