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Alexander Forbes SENS announcement

07 June 2006 Sens Announcement

Shareholders are referred to the cautionary announcement published on 21 April 2006 and renewed on 25 May 2006 relating to new developments that may have a material effect on the price of the Companys securities. The purpose of this announcement is to provide an update to shareholders on these developments.
Alexander Forbes Limited

The board has received a number of unsolicited approaches from various parties about the possibility of concluding a transaction with the Company.
The board appointed JP Morgan to advise them in this regard. Following these approaches, the Company has commenced discussions with private equity parties regarding a potential transaction to acquire 100% of the Company.
The discussions are in an early stage and may or may not result in a transaction.

International Risk Services (IRS)

Following a thorough review of the IRS business and material actions taken thus far, a number of growth and development opportunities have been identified in the current market. Alexander Forbes recently announced the appointment of Mike Hammond (former CEO of JLT Risk Solutions) as deputy chairman of IRS.
To optimally position the management team of IRS to capitalise on market opportunities, Alexander Forbes is currently considering the structural options to best support this growth. These include the possibility of involving a new private investor in IRS alongside Alexander Forbes.
Discussions are being held with a few select investors in this regard and, in the event that this option is pursued, it is likely that Alexander Forbes shareholding in IRS will reduce.

Change in Directorate

With the majority of the groups interests being based in South Africa, and the potential further impact of the transactions contemplated above, it has become appropriate for the role of Group CEO to again be based in South Africa.
Shareholders are advised that Rael Gordon has, therefore, indicated his intention to step down from the position of Group Chief Executive. The Board regrets the loss of Rael in this role, but respects his decision, and is pleased that he has agreed to remain involved in the international part of the group.

The board is delighted to announce the appointment of Peter Moyo as Group Chief Executive with effect from 1 July 2006. Peter will continue to be based in Johannesburg.
The leadership Peter has demonstrated since joining at the end of 2005 has already made a considerable impact on the group. He enjoys the trust of clients and the support of staff, and the board is delighted to have an executive of Peters calibre to take over the leadership of the group.
Rael will continue to support Peter in his new role and will remain with the group primarily focusing on Alexander Forbes international interests, and with a specific mandate to progress the initiatives described above with respect to IRS. Rael has committed to stay until March 2007 and will remain as a director of Alexander Forbes International and a number of its subsidiaries. In order to focus fully on the international business, Rael will step down from the board of the Company as well as the various subsidiary boards in South Africa at the end of June 2006.
The board would like to express its sincere gratitude to Rael who took over as Group Chief Executive in 2003 and has made a significant contribution to the group during his tenure. He has played a key role in the development of Investment Solutions to a business that now manages in excess of R120 billion in assets globally; the strengthening of the groups balance sheet, and in bolstering the leadership team for the group.
Commenting on the change Group Chairman Paul Heinamann said: The board is convinced that it is appropriate for the role of Group Chief Executive to be based in South Africa. It is largely due to Raels foresight and planning that we have an executive of the calibre of Peter Moyo in the business to take on leadership of the group. Peter is an exceptionally capable individual, and I look forward to working closely with him.
During Raels tenure, the group has made significant progress on a number of fronts, and the group is now well placed, under Peters leadership, to move forward into the future.

Further Cautionary Announcement

As a result of the potential transactions mentioned above, shareholders are advised to continue to exercise caution when trading in the Companys securities until a further announcement is made.

By order of the Board
Sandton
6 June 2006

Sponsor
J.P.Morgan Equities Limited
Investec

Comments from the following three main players involved, namely Peter Moyo, Paul Heinemann and Rael Gordon, as follows:

Peter Moyo: I am excited at the opportunity of leading the group into the future with the group remaining a truly South African company with global reach. Im grateful for Raels unflagging support thus far in my time with Alexander Forbes. The reputation of this company has been built on 100% client commitment and with the best team in the industry I hope to continue to build on the talent to ensure that the value we create for our clients is unsurpassed."

Chairman Paul Heinamann: Rael's energy and talent have served Alexander Forbes well during his tenure. In addition to his focus on our overseas
businesses, hes helped us streamline our core functions; greatly improved our capital structure and built a solid management team. While we will sorely miss the attention he gave South Africa, we are very excited to have Peter assume the mantle. Peter's leadership has been inspiring in the short time hes been with the group. By motivating and inspiring our employees and reaffirming the Alexander Forbes commitment to our clients, Peter is well placed to take the group forward.

Rael Gordon said: "With the proportion of the Group based in South Africa, and the exciting developments announced today, it makes sense for the role of the Chief Executive to again be based in Johannesburg. I am also keen to focus on the International business and to make sure we succeed on the projects already underway. Peter is an exceptionally capable candidate and has been a great addition to the management team. He has been a huge support to me and I will remain involved in the Group for a period in order to assist Peter in his new role.

 


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