Shareholders of Metropolitan, one of South Africa’s top five life insurers, have voted overwhelmingly to approve the company’s proposed partnership with broad-based empowerment consortium Kagiso Trust Investments (KTI), thus paving the way for KTI to take ownership of a 10% stake in Metropolitan.
In a high 76% poll at the shareholders’ general meeting on Wednesday, an overwhelming 99,75% of votes cast were in favour of the transaction.
Following the vote, Metropolitan said that given that regulatory approval has already been obtained and the necessary funding arranged, KTI will now take ownership of about 75,8-million newly created preference shares to be issued on October 1 2004. The shares equate to a 10% interest in Metropolitan, for which KTI will pay R540-million.
Leading market commentators have greeted the transaction favourably, saying it achieved up-front full payment for the shares and a long-term commitment by KTI. This follows criticism of financial structures implemented by some South African companies that have not resulted in immediate economic benefit to empowerment partners.
Group CEO Peter Doyle said the outcome of the vote was never really in doubt, as Metropolitan had been in regular contact with shareholders since details of the deal had been announced.
“I’m delighted at the positive response of all the parties involved, and look forward to increasing benefits from the strategic and operational value-add of KTI,” he said.
Metropolitan shareholders also voted 100% in favour of the implementation of an odd-lot offer to shareholders with fewer than 100 shares. In terms of the offer, the latter can increase their holdings to 100 shares at a price of R7,64 per share, or sell to Metropolitan at R8,02 per share, a premium of 5%.
A resolution authorising directors to issue and allot shares for the Metropolitan staff share schemes received a 96% vote.
Metropolitan will announce its interim results for the six months to June 30 2004 on September 8. — I-Net Bridge