SFG AUSTRALIA LTD 
By
15 August 2012
SFG AUSTRALIA LIMITED ASX RELEASE
(ASX: SFW)
RELEASE OF ESCROWED SHARES
The Board of SFG Australia Limited (SFG Australia) has
determined to release the final tranche of escrowed shares
(171.9m shares), which were subject to a 24-month voluntary
escrow period (to 14 July 2013) under the terms of the merger
with Shadforth Financial Group Holdings Limited (Shadforth),
by providing the Company's consent to the
impacted holders, consistent with the terms of the escrow
(as outlined in the Bidder's Statement lodged
with the ASX on 3 June 2011). In accordance with Listing Rule
3.10A, SFG Australia advises that these shares will be
released from escrow at close of business on 30 August
2012.
The final tranche of the escrowed shares issued as part
of the Company's acquisition of the Jeena business
(Phaz Pty Ltd) on 1 November 2011 which were subject to the
same escrow terms as the merger escrow, will also be released
from escrow at close of business on 30
August 2012 (1.0m shares).
The only shares that remain subject to escrow (to 10 December
2013) are employee held
shares as part of the Company's Employee Share Plan, totaling 41,250 shares.
The letters sent to the former shareholders of Shadforth and
Phaz Pty Ltd informing them of the release and
outlining the Board's rationale for the release of the
escrowed shares are attached.
For further enquiries please contact:
r
Investor Relations
02 9250 1527
SFGA (formerly Snowball Group Limited) is a leading
non-aligned client focused financial advice and end-to-end
wealth management firm, listed on the Australian Securities
Exchange.
SFGA provides a full range of wealth management services to
high net worth and affluent clients, including strategic
financial advice, portfolio administration solutions,
portfolio construction and management services, insurance
(both general and risk) solutions, finance
broking, stockbroking, and corporate superannuation services.
2
15 August 2012
Dear Shareholder,
The Board of SFG Australia Limited (SFG Australia or Company)
is writing to you as a former shareholder of Shadforth
Financial Group Holdings Limited (Shadforth). At the time of
the merger with Snowball Group Limited (now SFG Australia),
you received SFG Australia shares as consideration for the
merger. The remaining one third of the shares you received
remain subject to voluntary escrow which ends on 14
July 2013, as set out in the Bidder's Statement lodged
with the ASX on 3 June 2012.
As stated in the Bidder's Statement, at the time of the
merger, the escrow arrangements were
put in place to:
Assist in limiting the risk that the material increase in the number of shares outstanding in the Company could mean that significant volumes of SFG Australia shares would come onto the market at the same time, creating artificial selling pressure and volatility to the detriment of all SFG Australia shareholders;
align the interests of all SFG Australia shareholders.
One of the anticipated benefits of the significant share
issuance as a result of the merger was that the Company was
expected to experience a potential improvement in the
liquidity of the Company's shares, creating a
more diversified investor base to support SFG
Australia's growth strategy.
The Board has reviewed the trading in the Company's
shares since the announcement of the merger, and while
the average daily volume of shares traded has improved since
this time (compared to the 12 months prior to the
announcement of the merger), the Board believes that:
the risk of significant volumes of the Company's shares coming onto the market at the same time and its potential negative impact on shareholder value has reduced considerably; and
shareholder alignment is, to the extent assessable, apparent, both in the successful outcome of the merger and subsequent integration of the two businesses, and in the relatively immaterial volumes of SFG Australia shares sold by former Shadforth shareholders since the merger shares were issued.
Given the current opinion of the Board on the existing escrow
arrangements, the Board has determined that it is in the
interests of all shareholders to assist to improve liquidity
in the
Company's shares by releasing the remaining tranche of escrowed shares before the due date of 14 July 2013.
Accordingly, the Company intends to release the shares from
escrow with effect from the close of business on 30 August
2012. The delay in permitting you to trade arises because the
Company must give the ASX at least 10 business days notice of
its intention to release your shares from escrow. An
announcement to the ASX will be made today to satisfy this
requirement.
As the shares are released from escrow at close of business
on 30 August 2012, you will be free to trade your shares from
31 August 2012, subject to all relevant laws (such as the
insider trading provisions), and for current employees
of SFG Australia, the Company's Securities Trading
Policy. You are not required to do anything to release the
shares from escrow.
It is important to note that the Board cannot guarantee that
the release of the shares from
escrow will improve the liquidity in the Company's shares.
If you have any questions or would like further information,
please contact myself, SFG Australia's Managing
Director, Tony Fenning, or Ashleigh Nelson of Investor
Relations, at the
below details:
Eric Dodd |
Yours sincerely,
Chairman
SFG Australia Limited
15 August 2012
Dear Shareholder,
The Board of SFG Australia Limited, (SFG Australia or
Company) is writing to you as a former shareholder of Phaz
Pty Ltd (Phaz) who, at the time of the acquisition of Phaz,
received SFG Australia shares as consideration for the
acquisition. One third of the consideration shares remain
subject to voluntary escrow which ends on 14 July 2013. This
escrow period was aligned to the terms of, and the
period for, the escrowed shares relating to SFG Australia's
merger with Shadforth Financial Group Holdings Limited
(Shadforth). The rationale supporting the merger escrow
was set out in the Bidder's Statement lodged with the ASX on
3 June 2011.
As stated in the Bidder's Statement, at the time of the merger, the escrow arrangements were put in place to:
Assist in limiting the risk that the material increase in the number of shares outstanding in the Company could mean that significant volumes of SFG Australia shares would come onto the market at the same time, creating artificial selling pressure and volatility to the detriment of all SFG Australia shareholders;
align the interests of all SFG Australia shareholders.
One of the anticipated benefits of the significant share issuance arising from the merger and the acquisition of Phaz was that the Company was expected to experience a potential improvement in the liquidity of the Company's shares, creating a more diversified investor base to support SFG Australia's growth strategy.
The Board has reviewed the trading in the Company's shares since the announcement of the merger, and while the average daily volume of shares traded has improved since this time (compared to the 12 months prior to the announcement of the merger), the Board believes that:
the risk of significant volumes of the Company's shares coming onto the market at the same time and its potential negative impact on shareholder value has reduced considerably; and
shareholder alignment is, to the extent assessable, apparent, both in the successful outcome of the merger and subsequent integration of the two businesses, and in the relatively immaterial volumes of SFG Australia shares sold by former Shadforth and Phaz shareholders since the merger shares were issued.
Given the current opinion of the Board on the existing escrow
arrangements, the Board has
determined that it is in the interests of all shareholders to
assist to improve liquidity in the Company's shares by
releasing the remaining tranche of escrowed shares held by
former Phaz and Shadforth shareholders before the due
date of 14 July 2013.
Accordingly, the Company intends to release the remaining
shares held by you from escrow with effect from the close of
business on 30 August 2012. The delay in permitting you to
trade arises because the Company must give the ASX at least
10 business days notice of its intention to release your
shares from escrow. An announcement to the ASX will be made
today to satisfy this requirement.
As the shares are released from escrow at close of business
on 30 August 2012, you will be free to trade the shares from
31 August 2012, subject to all relevant laws (such as the
insider trading provisions), and for current employees
of SFG Australia, the Company's Securities Trading
Policy. You are not required to do anything to release the
shares from the escrow.
It is important to note the Board cannot guarantee that the
release of the shares from escrow
will improve the liquidity in the Company's shares.
If you have any questions or would like further information, please contact myself, SFG Australia's Managing Director, Tony Fenning, or Ashleigh Nelson of Investor Relations, at the below details:
Eric Dodd |
Yours sincerely,
Chairman
SFG Australia Limited
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