News Releases
Notice regarding signing of share exchange agreement for making SMBC Friend Securities into a wholly-owned subsidiary of ブックメーカーおすすめ(1/1)
Sumitomo Mitsui Financial Group, Inc. Sumitomo Mitsui Banking Corporation ブックメーカーおすすめ Friend Securities Co., Ltd.
Notice regarding signing of share exchange agreement for making SMBC Friend Securities into a wholly-owned subsidiary of ブックメーカーおすすめ
TOKYO, April 28, 2006 --- Sumitomo Mitsui Financial Group, Inc. (ブックメーカーおすすめ), Sumitomo Mitsui Banking Corporation (SMBC), and SMBC Friend Securities Co., Ltd. (SMBC Friend Securities), a subsidiary of SMBC, announced that ブックメーカーおすすめ and SMBC Friend Securities had signed a share exchange agreement to make SMBC Friend Securities into a wholly-owned subsidiary of ブックメーカーおすすめ, subject to regulatory approval of an application to be submitted pursuant to Article 52-23, paragraph 3 of the Banking Law, in accordance with decisions of each company’s board of directors at meetings held today. The signing is based on the basic agreement the three companies entered into on March 30, 2006.
1.Purpose of making SMBC Friend Securities a wholly-owned subsidiary of ブックメーカーおすすめ
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In accordance with the stabilization of the Japanese financial system, Japanese households’ portfolios have shown clear signs of a shift from savings to investment, and their investment
needs are expected to become further diversified. At the same time, we believe that new types of asset management services will become popular among individual investors who improve their financial knowledge and have an increased interest in portfolio management based on asset allocation concepts.
In view of these trends, ブックメーカーおすすめ will further strengthen cooperation among group companies by making SMBC Friend Securities a wholly-owned subsidiary, establishing a new business model distinct from the conventional one by combining banking and securities businesses and maximizing synergies between them. With such initiatives, ブックメーカーおすすめ will try to make every effort to enhance the enterprise value of the whole group.
In particular, SMBC will provide fund wrap services through collaboration with SMBC Friend Securities. Furthermore, ブックメーカーおすすめ will accelerate the exchange of personnel between SMBC and SMBC Friend Securities and expand the consulting services of SMBC Friend Securities to SMBC’s individual customers who are interested in investments in individual stocks.
2.Terms and conditions of share exchange
(1) Schedule of share exchange
| Board meetings to approve share exchange agreement | April 28, 2006 |
|---|---|
| Signing of share exchange agreement | April 28, 2006 |
| General shareholders’ meeting to approve share exchange agreement (ブックメーカーおすすめ Friend Securities) | June 29, 2006* |
| ブックメーカーおすすめ Friend Securities to be delisted | August 28, 2006* |
| Deadline of submission of ブックメーカーおすすめ Friend Securities stock certificates | August 31, 2006* |
| Effective date of share exchange | September 1, 2006* |
* Planned
(Note) 1. The effective date of share exchange may be changed if ブックメーカーおすすめ and SMBC Friend Securities so agree. 2. ブックメーカーおすすめ will conduct the share exchange without obtaining approval at its general shareholders’ meeting, since this share exchange is deemed a “simple share exchange” under Article 358 of the Commercial Code of Japan.
(2) Share exchange ratio
| ブックメーカーおすすめ(Parent company) | ブックメーカーおすすめ Friend Securities(Wholly-owned subsidiary) | |
| Share exchange ratio | 1 | 0.0008 |
(Note 1) Allotment ratio 0.0008 shares of ブックメーカーおすすめ will be allotted to 1 share of SMBC Friend Securities.
(Note 2) Basis for determination of share exchange ratio ブックメーカーおすすめ appointed Goldman Sachs (Japan) Ltd. (“Goldman Sachs”) as its financial advisor and SMBC Friend Securities appointed Merrill Lynch Japan Securities Co., Ltd. (“Merrill Lynch”) as its financial advisor in connection with the transaction. ブックメーカーおすすめ and SMBC Friend Securities comprehensively considered numerous factors including results of the analyses provided by their respective financial advisors, and discussed and agreed to the above.
(Note 3) Methods of and basis for calculation by financial advisors Goldman Sachs analyzed the share exchange ratio based on, among other things, review of market price trends of the common stock of ブックメーカーおすすめ and SMBC Friend Securities, a discounted cash flow analysis, a selected companies analysis and a selected transactions analysis. Merrill Lynch analyzed the share exchange ratio based on a comprehensive judgment using a market stock price analysis, a discounted cash flow analysis, and a comparable companies analysis.
(Note 4) Number of new shares to be issued by ブックメーカーおすすめ Common stock: 249,015 shares
(3) Listing after share exchange
ブックメーカーおすすめ will hold 100% ownership of SMBC and remain listed. On the other hand, SMBC Friend Securities will become a wholly-owned subsidiary of ブックメーカーおすすめ and be delisted on August 28, 2006.
(4) Cash to be paid upon share exchange
No cash will be paid in connection with the share exchange.
(5) Situation after share exchange
(a) Corporate name, business, head office, and representative The corporate names, businesses, head offices, and representatives of ブックメーカーおすすめ and SMBC Friend Securities will remain unchanged from the description in the “Overview of ブックメーカーおすすめ and SMBC Friend Securities.”
(b) Capital stock ブックメーカーおすすめ’s capital stock will not increase as a result of the share exchange, while ブックメーカーおすすめ’s capital reserve will be increased by the allowed maximum amount calculated pursuant to Article 357 of the Commercial Code of Japan.
(c) Impact on financial results The share exchange will not affect ブックメーカーおすすめ’s consolidated earnings for this fiscal year since SMBC Friend Securities is already a consolidated subsidiary of ブックメーカーおすすめ. On the other hand, ブックメーカーおすすめ believes that it can further promote cooperation among group companies by making SMBC Friend Securities a wholly-owned subsidiary and by maximizing synergies between the banking and securities businesses, thereby improving its future consolidated financial results.
(d) Treatment of fractional shares Cash, instead of fractional shares of ブックメーカーおすすめ, will be distributed to shareholders of SMBC Friend Securities who have the right to receive fractional shares of ブックメーカーおすすめ as a result of the share exchange, in accordance with Article 234 of the Japanese Commercial Code of Japan.
Overview of ブックメーカーおすすめ and SMBC Friend Securities
（As of September 30, 2005 (*1), non-consolidated basis
| Parent company | Wholly-owned subsidiary | ||||||
| Company name | Sumitomo Mitsui Financial Group, Inc. | ブックメーカーおすすめ Friend Securities Co., Ltd. (*2) | |||||
| Business description | Management of the affairs of subsidiaries and relevant ancillary functions | Securities business | |||||
| Date of establishment | December 2, 2002 | March 2, 1948 | |||||
| Head office | 1-2, Yurakucho 1-chome, Chiyoda-ku, Tokyo | 7-12, Nihonbashi-kabuto-cho, Chuo-ku, Tokyo | |||||
| Representative | President: Teisuke Kitayama | President & CEO: Katsuhiko Tamaki | |||||
| Capital Stock | 1,352,651 millions of yen (*3) | 27,270 millions of yen | |||||
| Shares issued and outstanding | Common stock 7,303,472.77 Preferred stock 950,101 | Common stock 311,269,929 | |||||
| Stockholder’s equity | 3,312,686 millions of yen | 127,320 millions of yen | |||||
| Total assets | 3,653,155 millions of yen | 243,482 millions of yen | |||||
| Date of fiscal year ブックメーカーおすすめ | March 31 | March 31 | |||||
| Number of employees | 122 | 1,844 | |||||
| Principal customers | Not applicable | Individuals, companies, etc | |||||
| Principal shareholders (Name and percentage of shares outstanding) (*4) | Japan Trustee Services Bank, Ltd. (Trust Account) | 6.56% | Sumitomo Mitsui Banking Corporation | 40.35% | |||
| The Master Trust Bank of Japan, Ltd. (Trust account) | 5.99% | Sumitomo Life Insurance Company | 8.71% | ||||
| The Chase Manhattan Bank N.A. London (Standing agent; Mizuho Corporate Bank, Ltd.’s Kabutocho Custody & Proxy Department within the Settlement & Clearing Services Division) | 2.13% | The Master Trust Bank of Japan, Ltd. (Trust account) | 4.05% | ||||
| Nippon Life Insurance Company | 2.11% | Japan Trustee Services Bank, Ltd. (Trust Account) | 2.26% | ||||
| State Street Bank and Trust Company 505103 (Standing agent; Mizuho Corporate Bank, Ltd.’s Kabutocho Custody & Proxy Department within the Settlement & Clearing Services Division) | 1.91% | QUOQ Inc. | 1.43% | ||||
| Relationship between ブックメーカーおすすめ and SMBC Friend Securities | Capital relationship | SMBC, a wholly-owned subsidiary of ブックメーカーおすすめ, holds 40.35 % of the total outstanding common shares of SMBC Friend Securities. | |||||
| Personnel relationship | No one concurrently holds a position of director in ブックメーカーおすすめ and SMBC Friend Securities. | ||||||
| Business relationship | There is no business relationship between ブックメーカーおすすめ and SMBC Friend Securities. | ||||||
| Financial Results of the past 3 fiscal years | Fiscal year | FY2003 ended March 31, 2004 | FY2004 ended March 31, 2005 | 1st half of FY 2005 ended September 30, 2005 | FY2003 ended March 31, 2004 | FY2004 ended March 31, 2005 | 1st half of FY 2005 ended September 30, 2005 |
| Operating income (millions of yen) | 55,515 | 258,866 | 16,206 | 48,342 | 52,304 | 27,299 | |
| Operating profit (millions of yen) | 52,470 | 256,222 | 14,468 | 18,806 | 18,042 | 9,795 | |
| Ordinary profit (million of yen) | 51,188 | 253,448 | 12,424 | 19,104 | 18,323 | 10,031 | |
| Net income (millions of yen) | 50,505 | 252,228 | 38,435 | 15,417 | 13,201 | 6,352 | |
| Net income per share (yen) | 3,704.49 | 38,302.88 | 5,646.36 | 52.49 | 42.37 | 20.56 | |
| Dividend per share (yen) (*4) | 3,000 | 3,000 | − | 12.00 | 12.00 | − | |
| Stockholders’ equity per share (yen) | 232,550.74 | 257,487.78 | 268,549.24 | 345.25 | 402.58 | 413.29 | |
(*1)SMBC Friend Securities announced its most recent financial results, as of March 2006, today. However, in light of time constraints, SMBC Friend Securities listed its financial results as of September 2005 for purposes of the above overview. (*2)SMBC Friend Securities is a consolidated subsidiary of ブックメーカーおすすめ. (*3)ブックメーカーおすすめ’s capital stock is currently 1,420,877 millions of yen. (*4)Principal shareholders and dividend per share of common stock
