PREVIOUSLY RELEASED IN THE UK
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN
PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONSOF THAT
JURISDICTION.
THIS IS AN ANNOUNCEMENT FALLING UNDER RULE 2.4 OF THE CITY
CODE ON TAKEOVERS AND MERGERS (THE "CODE") AND DOES NOT CONSTITUTE
AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER UNDER RULE 2.7
OF THE CODE. THERE CAN BE NO CERTAINTY THAT ANY OFFER WILL BE
MADE.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION RELATING TO
TRYG A/S.
TORONTO, Nov. 5, 2020 /CNW/ - Further to the
announcement by RSA earlier today regarding an approach from Intact
Financial Corporation ("Intact") and Tryg A/S ("Tryg") (together,
the "Consortium") regarding a possible cash offer for the Company
(the "Proposal") (link), RSA and the Consortium together
make the following further statement regarding the Proposal.
The Proposal comprises 685 pence
in cash per RSA share, plus payment by RSA of the announced interim
dividend of 8 pence per share (the
"Interim Dividend"). This would represent an approximately £7.2
billion transaction with Intact paying £3.0 billion and Tryg paying
£4.2 billion. Intact would retain RSA's Canada and UK & International operations
and obligations, Tryg would retain RSA's Sweden and Norway operations, and Intact and Tryg would
co-own RSA's Denmark
operations.
The Proposal is subject to the satisfaction or waiver of
pre-conditions relating to, amongst other things, due diligence,
the recommendation of the Board of RSA, the support of RSA's
pension fund trustees and Board approvals from Intact, Tryg and
TryghedsGruppen. The Board of RSA has indicated to the Consortium
that it would be minded to recommend the Proposal, subject to
satisfactory resolution of the other terms of the Proposal,
including a period of due diligence which is currently underway by
the Consortium.
The Consortium views the combination of RSA's businesses with
those of Intact and Tryg as strategically compelling. The
acquisition would strengthen Intact's position as a world-class
P&C (property and casualty) insurer, increasing Intact's total
direct premiums written from approximately C$12 billion to C$20
billion. The combination of RSA's Swedish and Norwegian
operations with Tryg provides Tryg with a unique opportunity to
strengthen its position and break into the top-3 for P&C in
Sweden and Norway.
Strategically, Intact would expand its position in the
competitive Canadian P&C industry where operational excellence
is imperative for outperformance. The acquisition would also create
a leading global specialty lines platform with an expanded product
offering and access to new customers for Intact's existing
specialty franchises. Intact also sees significant opportunity to
deploy its customer driven data and analytics focused approach in
RSA's UK & International personal and commercial lines
businesses.
Intact intends to finance its portion of the proposed
transaction and associated transaction costs with an equity private
placement with approximately three-quarters provided by cornerstone
investors, together with debt and preferred share issuances. Intact
intends to utilize an unsecured bridge and term loan credit
facility to provide funds certainty for the proposed transaction.
Intact will structure the financing to support its current credit
ratings. The proposed acquisition is expected to exceed Intact's
internal rate of return threshold. It is also expected to be
immediately accretive to net operating income per share on closing,
high-single digit in the first year and reaching upper-teens within
36 months. As well, Operating ROE is expected to be maintained at a
mid-teens level in the medium term, with BVPS increasing in excess
of 25% on completion of the acquisition.
Similarly, the acquisition would provide Tryg a unique
opportunity to strengthen its position in Swedish and Norwegian
P&C, creating the largest listed P&C insurer in Scandinavia
with gross premiums earned of approximately DKK 31 billion and total assets of approximately
DKK 99 billion. The acquisition would
improve Tryg's geographical and product diversification,
particularly in Sweden. Tryg is
very confident that it will be able to seamlessly combine RSA's
Swedish and Norwegian operations, with Tryg further benefiting from
its recent experience in the successful integration of Alka in
Denmark.
The Potential Transaction would result in a step-change in the
Tryg group's profitability, driven by the strong underlying
profitability of RSA's Swedish and Norwegian Businesses and the
sizeable synergy potential across Sweden and Norway. Following completion, Tryg would
expect to generate annualised synergies of DKK 900 million. In combination, these are
expected to drive a return on investment of approximately c.7%,
high teens EPS accretion by 2023 and a material increase in
dividend capacity.
Tryg would seek to finance its portion of the proposed
transaction and associated transaction costs primarily via a rights
issue in 2021 to be underwritten on a standby basis to provide
certain funds for the proposed transaction.
Regarding RSA's Danish business, with over $1 billion in annual premiums, Intact sees an
opportunity to sustain its personal lines operating performance and
to continue to improve commercial lines, while retaining
optionality with respect to strategic alternatives for the
business.
Pursuant to Rule 2.5
of the Code, the Consortium reserves the right to:
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(a) vary the
form and/or mix of the consideration described in this
announcement:
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(i)
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with the consent of
the Board of RSA;
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(ii)
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if a third party
announces a firm intention to make an offer for RSA; or
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(iii)
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if RSA announces a
whitewash transaction pursuant to the Code; and
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(b) announce an
offer on less favourable terms than the Proposal:
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(i)
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with the consent of
the Board of RSA;
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(ii)
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if a third party
announces a firm intention to make an offer for RSA at a lower
value than the Proposal;
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(iii)
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if RSA announces,
declares, or pays a dividend or any other distribution or return of
capital to its shareholders (other than the Interim Dividend) after
this announcement (in which case the Consortium reserves the right
to reduce the offer price by an amount up to the amount of such
dividend, distribution or return of capital); or
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(iv)
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if RSA announces a
whitewash transaction pursuant to the Code.
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There can be no certainty that an offer will be made for
RSA under the Code. A further announcement will be made as
appropriate.
In accordance with Rule 2.6(a) of the Code, the Consortium must,
by not later than 5.00 p.m.
(London time) on 3 December 2020, either announce a firm intention
to make an offer for RSA in accordance with Rule 2.7 of the Code or
announce that it does not intend to make an offer for RSA, in which
case the announcement will be treated as a statement to which Rule
2.8 of the Code applies. This deadline will only be extended with
the consent of the Panel in accordance with Rule 2.6(c) of the
Code.
In accordance with Rule 26.1 of the Code, a copy of this
announcement will be available, subject to certain restrictions
relating to persons resident in restricted jurisdictions, at
www.rsagroup.com, www.Intactfc.com and www.Tryg.com by no later
than 12 noon (London time) on
6 November 2020. The content of the
websites referred to in this announcement are not incorporated into
and do not form part of this announcement.
This announcement contains inside information relating to Tryg
for the purposes of Article 7 of the Market Abuse Regulation (EU)
596/2014 (MAR), and is disclosed in accordance with Tryg's
obligations under Article 17 of MAR. For the purposes of MAR and
Article 2 of Commission Implementing Regulation (EU) 2016/1055, the
person responsible for arranging for the release of this
announcement on behalf of Tryg is Bettina
Drejer Clausen, General Counsel.
Enquiries:
RSA Insurance
Group (Investors & analysts)
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Charlotte Jones,
Chief Financial Officer
Matt Cohen, Head of
Investor Relations
Natalie Whitty,
Communications Director
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+ 44 (0) 77 8857
8067
+44 (0) 79 6734
3633
+ 44 (0) 75 8434
2052
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Intact Financial
Corporation
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Ken Anderson, SVP,
Investor Relations & Corporate Development
Ryan Penton,
Director, Investor Relations
Diane Flanagan, VP,
Corporate Affairs & Communications
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+ 1 855 646 8228 ext
87383
+ 1 416 316
3495
+ 1 647 456
7931
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Tryg
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Gianandrea Roberti,
Head of Investor Relations
Peter Brondt, Investor Relations Manager
Tanja Frederiksen, Head of Corporate Communications
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+ 45 70 11 20
20
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Robey Warshaw
(financial adviser to RSA)
Simon
Robey
Simon Warshaw
Matthew Ellis
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+ 44 (0) 20 7317
3900
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Goldman Sachs
International (financial adviser to RSA)
Karen Cook
Ashish
Pokharna
Chris
Emmerson
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+ 44 (0) 20 7774
1000
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BofA Securities
(financial adviser to RSA)
Matt
Cannon
Tim
Waddell
Oli Elias
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+ 44 (0) 20 7628
1000
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Barclays
(financial adviser to Intact)
Mike Lamb
Derek
Shakespeare
Jacquelyn
Titus
Krit
Chaiwatanatorn
Kunal
Bidani
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+44 (0) 20 7623
2323
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Morgan Stanley
(financial adviser to Tryg)
Laurence Hopkins
Paul Miller
Pekko
Tonteri
Daniel
Diamond
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+ 44 (0) 20 7425
8000
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Further Information
With a 300-year heritage, RSA is a multinational quoted
insurance group. RSA operates three core business segments:
Canada, Scandinavia and UK &
International; and has the capability to write business in over 100
countries. RSA has around 12,400 employees with net written
premiums of £6.4 billion in 2019.
Intact Financial Corporation (TSX: IFC) is the largest provider
of property and casualty (P&C) insurance in Canada and a leading provider of specialty
insurance in North America, with
over CAD $11 billion in total annual
premiums. The Company has approximately 16,000 employees who serve
more than five million personal, business and public sector clients
through offices in Canada and the
U.S. In Canada, Intact distributes
insurance under the Intact Insurance brand through a wide network
of brokers, including its wholly-owned subsidiary BrokerLink, and
directly to consumers through belairdirect. Frank Cowan adds scale to Intact's MGA platform
to manufacture and distribute public entity insurance products in
Canada. In the U.S., Intact
Insurance Group USA (previously
known as OneBeacon Insurance Group), a wholly-owned subsidiary,
provides specialty insurance products through independent agencies,
brokers, wholesalers and managing general agencies.
Tryg is a leading non-life insurer in the Nordic region with
activities in Denmark,
Norway and Sweden. Tryg had total premiums of
DKK 21.7bn (approx. EUR 3bn) at year end 2019, the company is active
in the Private, Commercial and Corporate segment across the Nordic
region. Tryg provides peace of mind and value to 4m customers on a daily basis. Tryg is listed on
Nasdaq Copenhagen.
TryghedsGruppen currently owns 60 per cent. of the shares in
Tryg and makes annual contributions to projects that create peace
of mind via TrygFonden. In 2020, TryghedsGruppen will contribute up
to DKK 650 million via
TrygFonden.
Robey Warshaw LLP, which is authorised and regulated in the
United Kingdom by the Financial
Conduct Authority, is acting as financial adviser exclusively for
RSA and no one else in connection with the matters referred to in
this announcement and will not regard any other person as its
client in relation to the matters referred to in this announcement
and will not be responsible to anyone other than RSA for providing
the protections afforded to clients of Robey Warshaw LLP, nor for
providing advice in relation to the matters referred to in this
announcement.
Goldman Sachs International, which is authorised by the
Prudential Regulation Authority and regulated by the Financial
Conduct Authority and the Prudential Regulation Authority in the
United Kingdom, is acting
exclusively for RSA and no one else in connection with the matters
referred to in this announcement and will not be responsible to
anyone other than RSA for providing the protections afforded to
clients of Goldman Sachs International, or for providing advice in
relation to the matters referred to in this announcement.
Merrill Lynch International ("BofA Securities"), a subsidiary of
Bank of America Corporation, which is authorised by the Prudential
Regulation Authority and regulated by the Financial Conduct
Authority and the Prudential Regulation Authority in the
United Kingdom, is acting
exclusively for RSA in connection with the matters set out in this
announcement and for no one else and will not be responsible to
anyone other than RSA for providing the protections afforded to its
clients or for providing advice in relation to the subject matter
of this announcement or any other matters referred to in this
announcement.
Barclays Bank PLC, acting through its Investment Bank
("Barclays"), which is authorised by the Prudential Regulation
Authority and regulated in the United
Kingdom by the Financial Conduct Authority and the
Prudential Regulation Authority, is acting exclusively for Intact
and no one else in connection with the matters referred to in this
announcement and will not be responsible to anyone other than
Intact for providing the protections afforded to clients of
Barclays nor for providing advice in relation to any possible offer
or any other matters referred to in this announcement.
Morgan Stanley & Co. International plc ("Morgan Stanley")
which is authorised by the Prudential Regulation Authority and
regulated by the Financial Conduct Authority and the Prudential
Regulation Authority in the UK is acting as financial adviser
exclusively for Tryg and no one else in connection with the matters
set out in this announcement. In connection with such matters,
Morgan Stanley, its affiliates and their respective directors,
officers, employees and agents will not regard any other person as
their client, nor will they be responsible to any other person for
providing the protections afforded to their clients or for
providing advice in relation to the contents of this announcement
or any other matter referred to herein.
In accordance with the Code, normal United Kingdom market practice and Rule
14e-5(b) of the Exchange Act, Barclays, Morgan Stanley,
Robey Warshaw, Goldman Sachs
International and Merrill Lynch International and each of their
affiliates will continue to act as exempt principal trader in RSA
securities on the London Stock Exchange. These purchases and
activities by exempt principal traders which are required to be
made public in the United Kingdom
pursuant to the Code will be reported to a Regulatory Information
Service and will be available on the London Stock Exchange website
at www.londonstockexchange.com. This information will also be
publicly disclosed in the United
States to the extent that such information is made public in
the United Kingdom.
This announcement is not intended to, and does not, constitute
or form part of any offer, invitation or solicitation of any offer
to purchase, otherwise acquire, subscribe for, sell or otherwise
dispose of any securities or the solicitation of any vote or
approval in any jurisdiction. Any offer (if made) will be made
solely by certain offer documentation which will contain the full
terms and conditions of any offer (if made), including details of
how such offer may be accepted.
This announcement has been prepared in accordance with English
law and the Code, and information disclosed may not be the same as
that which would have been prepared in accordance with laws outside
of the United Kingdom. The
release, distribution or publication of this announcement in
jurisdictions outside of the United
Kingdom may be restricted by laws of the relevant
jurisdictions, and therefore persons into whose possession this
announcement comes should inform themselves about, and observe, any
such restrictions. Any failure to comply with the restrictions may
constitute a violation of the securities law of any such
jurisdiction.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in
1% or more of any class of relevant securities of an offeree
company or of any securities exchange offeror (being any offeror
other than an offeror in respect of which it has been announced
that its offer is, or is likely to be, solely in cash) must make an
Opening Position Disclosure following the commencement of the offer
period and, if later, following the announcement in which any
securities exchange offeror is first identified. An Opening
Position Disclosure must contain details of the person's interests
and short positions in, and rights to subscribe for, any relevant
securities of each of (i) the offeree company and (ii) any
securities exchange offeror(s). An Opening Position Disclosure by a
person to whom Rule 8.3(a) applies must be made by no later than
3.30 pm (London time) on the 10th business day
following the commencement of the offer period and, if appropriate,
by no later than 3.30 pm
(London time) on the 10th business
day following the announcement in which any securities exchange
offeror is first identified. Relevant persons who deal in the
relevant securities of the offeree company or of a securities
exchange offeror prior to the deadline for making an Opening
Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in 1% or more of any class of relevant securities of the
offeree company or of any securities exchange offeror must make a
Dealing Disclosure if the person deals in any relevant securities
of the offeree company or of any securities exchange offeror. A
Dealing Disclosure must contain details of the dealing concerned
and of the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of (i) the offeree
company and (ii) any securities exchange offeror(s), save to the
extent that these details have previously been disclosed under Rule
8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies
must be made by no later than 3.30 pm
(London time) on the business day
following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. You should contact the Panel's Market Surveillance Unit
on +44 (0)20 7638 0129 if you are in any doubt as to whether you
are required to make an Opening Position Disclosure or a Dealing
Disclosure.
Other information
LEI: 549300HOGQ7E0TY86138
Notice to US investors
If Intact and Tryg made an offer for RSA, then US holders of RSA
shares should note that the steps of any transaction requiring
approval by RSA shareholders may be implemented under a UK scheme
of arrangement provided for under English company law. If so, it is
expected that any shares to be issued under the transaction to RSA
shareholders would be issued in reliance upon the exemption from
the registration requirements of the US Securities Act of 1933 (the
"US Securities Act"), provided by Section 3(a)(10) thereof and
would be subject to UK disclosure requirements (which are different
from those of the United States).
The transaction may instead be implemented by way of a takeover
offer under English law. If so, any securities to be issued under
the transaction to RSA shareholders will either be registered under
the US Securities Act or subject to an applicable exemption from
registration. If the transaction is implemented by way of UK
takeover offer, it will also be effected in compliance with the
applicable rules under the US Exchange Act of 1934, including any
applicable exemptions provided under Rule 14d-1(d) thereunder.
This filing shall not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be
any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such
jurisdiction.
Any securities offered as part of the Tryg rights issue will not
be registered under the US Securities Act and may not be offered or
sold in, or into, the United
States absent registration or an applicable exemption from
the registration requirements of the US Securities Act.
Neither the acquisition nor this announcement have been approved
or disapproved by the Securities and Exchange Commission, any state
securities commission in the United
States or any other US regulatory authority, nor have such
authorities passed upon or determined the adequacy or accuracy of
the information contained in this announcement or the merits of
this acquisition. Any representation to the contrary is a criminal
offence in the US.
Cautionary note about forward-looking statements
This news release includes "forward looking statements".
The forward-looking statements contained in this announcement
include statements relating to Intact's and Tryg's intention in
relation to the Proposal, the Consortium and RSA, pro-forma
entities following completion of the Proposal and expected benefits
including financial accretion, and other statements other than
historical facts. Forward looking statements often use words such
as "believe", "expect", "estimate", "intend", "anticipate" and
words of a similar meaning. You should not place undue reliance on
these forward-looking statements, which reflect the current views
of Intact and Tryg, are subject to risks and uncertainties about
Intact, Tryg and RSA and are dependent on many factors, some of
which are outside of Intact's and Tryg's control. There are
important factors, risks and uncertainties that could cause actual
outcomes and results to be materially different. Except as required
by law, Intact and Tryg undertake no obligation to publicly update
or revise any forward-looking statements, whether as a result of
new information, future events or otherwise.
Non-IFRS financial measures
Intact uses both IFRS and non-IFRS financial measures to assess
its performance. Non-IFRS financial measures do not have
standardized meanings prescribed by IFRS and may not be comparable
to similar measures used by other companies in Intact's industry.
The non-IFRS measures included in this announcement are: direct
premiums written (DPW), net operating income per share (NOIPS) and
internal rate of return (IRR). Non-IFRS financial measures and
other insurance-related terms are defined in the glossary available
in the "Investors" section of Intact's web site at
www.Intactfc.com
SOURCE Intact Financial Corporation