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 REGULATIONS OF THAT
JURISDICTION.
THIS ANNOUNCEMENT 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.
TORONTO, Nov. 9, 2020 /CNW/ - On 5
November 2020 RSA announced that it had received an approach
from Intact and Tryg A/S ("Tryg") (together the "Consortium")
regarding a possible cash offer by the Consortium for RSA at a
price of 685 pence per RSA share (the
"Proposal"). Under the Proposal RSA shareholders will receive in
addition the announced interim dividend of 8
pence per RSA share. Further information regarding the
Proposal was announced by RSA and the Consortium later on the same
day.
Intact today provides further information regarding its proposed
participation in the Consortium and its plans for the RSA
businesses in its Canada and
Specialty lines segments, as well as the opportunities in the UK
& International businesses and from co-ownership in a top 3
franchise in Denmark (together,
the "Transaction"). Intact will also today make available an
investor presentation via its website at
https://www.intactfc.com/English/investors and looks forward to
engaging further with all stakeholders regarding this strategic
potential Transaction.
The Transaction would strengthen Intact's position as a
world-class P&C insurer through:
- Expanding Intact's leadership position in Canada with the combination of Intact's 17%
share and RSA's 5% share of the competitive CAD$60 billion Canadian P&C industry,
resulting in proforma 2019 direct premiums written of CAD$13 billion;
- Creating a leading global specialty lines business, bolstering
Intact's existing North American Specialty franchise with RSA's UK
& International geographies to broaden the distribution
footprint. Provides opportunity to create strong global franchises
in highly competitive lines such as Marine, Specialty Property and
E&O/D&O. This will drive Specialty to over CAD$4 billion in premiums with a sustainable low
90's combined ratio objective;
- Entering the UK & Ireland
markets at scale through RSA's top 5 position with strong brands in
the UK, which at CAD$80 billion is
Europe's largest P&C sector,
and its top 10 position in Ireland. Intact will also benefit from entry
into several attractive European and Middle Eastern markets;
and
- Delivering financially compelling returns. Net assets expected
to be acquired at 0.9x book value, with an expected internal rate
of return (IRR) in excess of Intact's 15% threshold. Value creation
is expected to drive upper teens net operating income per share
(NOIPS) accretion within 36 months. The value creation is expected
to be delivered approximately 75% in Canada, 20% in UK & International, and 5%
in Global Specialty lines.
The Transaction will build on Intact's strengths and further
expand its market opportunity. The Transaction also provides Intact
a unique opportunity to deploy its best-in-class operating model
which is expected to allow Intact to continue achieving its
financial objectives of 10% NOIPS growth annually over time, and
500bps of annual ROE outperformance. Canada will remain at the core of Intact's
business where outperformance is well established.
Intact will retain the RSA pension scheme obligations as part of
the Transaction. Intact believes that the Schemes are well-managed
with significant steps already taken to de-risk. The UK
pension schemes' IFRS surplus was estimated at £416 million at
September 30, 2020, with funding
arrangements in place at £75m per year. Constructive discussions
with the pension Trustees are well advanced, and the metrics for
the proposed Transaction reflect the financial impact of the
pension schemes' obligations. Intact will also assume RSA's issued
debt and preferred shares / hybrid instruments.
Intact expects to maintain a strong capital position following
the Transaction, with an estimated capital margin above
CAD$1.5 billion and an MCT above 194%
in Canada, a Solvency II coverage
ratio above 160% in the UK and an RBC above 400% in the US.
Intact's debt-to-capital proforma for the closing of the
Transaction is expected to be approximately 26%, which is expected
to fall to 20% within 36 months of completion. Intact does not
anticipate the Transaction and its planned financing structure to
lead to a change in its current credit ratings.
Please refer to the announcement made by RSA and the Consortium
dated 5 November 2020 for the
reservations allowed to the Consortium to announce an offer on less
favourable terms than the Proposal.
There can be no certainty that an offer will be made for RSA
under the Code. A further announcement will be made as
appropriate.
Enquiries:
Intact Financial Corporation
Ken Anderson, SVP,
Investor Relations & Corporate Development
Ryan Penton,
Director, Investor Relations
Diane Flanagan, VP,
Corporate Affairs & Communications
|
+ 1 855 646 8228 ext
87383 + 1 416 316
3495 + 1 647 456
7931
|
|
|
Barclays
(financial adviser to Intact)
Derek
Shakespeare
Mike Lamb
Jacquelyn
Titus
Krit
Chaiwatanatorn
Kunal
Bidani
|
+ 44 (0) 20 7623
2323
|
|
|
Tulchan
Communications
Simon
Pilkington
Tom Murray
Sheebani
Chothani
|
+ 44 (0) 20 7353
4200
|
Further Information
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.
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 advice in relation to any possible offer or
any other matters referred to in this announcement.
In accordance with the Code, normal United Kingdom market practice and Rule
14e-5(b) of the Exchange Act, Barclays 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.
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,
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.
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 intention in relation to
the Transaction, the Consortium and RSA, pro-forma entities
following completion of the Transaction 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, are subject to risks and uncertainties about Intact and
are dependent on many factors, some of which are outside of
Intact'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 undertakes
no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise. Please refer to Intact's investor presentation dated
November 9, 2020 on Intact's website
at https://www.intactfc.com/English/investors.
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