Johannesburg - Nedcor, the banking group seeking to merge with Standard Bank Investment Corporation (Stanbic), maintained the pace of chairman-to-chairman correspondence yesterday when it responded to Stanbic`s rebuttal of its merger overtures.
But Chris Liebenberg, Nedcor`s chairman, also made his clearest statement yet on the role of Old Mutual, Nedcor`s controlling shareholder, in the planned merger.
"There`s been total non-interference by Old Mutual and there`s been no directive about what we should do. But they have an interest that a deal should be done because the business case (for a merger) is just so profound."
Old Mutual has so far only admitted it is acting as midwife in facilitating a merger.
Liebenberg said his five-page letter to Conrad Strauss, his opposite number at Stanbic, was meant to "set the record straight" and "highlight the business case for a merger" and to express Nedcor`s wish to keep talking and find a solution.
One analyst pointed out that Stanbic did not invite Nedcor to approach it in the first place and said he could not see why Stanbic would want to keep talking.
"Nedcor is desperately begging Stanbic to come to the party," he said.
Richard Laubscher, Nedcor`s chief executive, said: "There`s a strong institutional interest in this deal being done." Stanbic`s institutional shareholders accepted the business logic of a merger and that it should go through on a friendly basis, he said.
Liebenberg`s letter, which stressed Nedcor`s proposal was friendly, said improved earnings from a merger would profitably expand services to the under-banked and create a "real black empowerment opportunity".
He insisted the return to Nedcor and Stanbic shareholders would be "substantially higher" in a merger than on a stand-alone basis, but admonished Stanbic for discussing the merger in public. "Your premature public airing of these sensitive discussions has created uncertainty and is not in the best interests of the staff of both groups."
On price, he used a previous declaration of Mike Vosloo, Stanbic`s chief executive at the time of the first Liberty Life merger talks two years ago, to support Nedcor`s determination to effect a merger at "recent market values".
Liebenberg said Nedcor was considering its position and its further actions, if any.
Nedcor dropped 380c to R120 and Stanbic rose 50c to R20,90 on the JSE yesterday.