TORONTO, Nov. 12, 2020 /CNW/ - Further to the announcement
on November 5, 2020 relating to the
possible offer for RSA by Intact Financial Corporation (TSX: IFC)
("Intact" or the "Company") and Tryg A/S ("Tryg") (together the
"Consortium"), Intact announced today that it has entered into
subscription agreements with subsidiaries of each of Caisse de
dépôt et placement du Québec ("CDPQ"), Canada Pension Plan
Investment Board ("CPP Investments") and Ontario Teachers' Pension
Plan Board ("Ontario Teachers'") for the aggregate issuance of 23.8
million subscription receipts at a price of $134.50 per subscription receipt for gross
proceeds of $3.2 billion. CDPQ, CPP
Investments, and Ontario Teachers' are committing $1.5 billion, $1.2
billion, and $0.5 billion,
respectively. Completion of the offering is conditional upon the
Consortium announcing a firm offer for RSA. Additional information
on the proposed transaction is available at Intact's website at
https://www.intactfc.com/English/investors/.
Each subscription receipt will entitle the holder to receive one
common share of Intact as well as a commitment fee upon closing of
the acquisition of RSA. The completion of the offering is subject
to approval of the Toronto Stock Exchange and other customary
closing conditions.
The subscription receipts and the common shares of Intact have
not been, and will not be, registered under the U.S. Securities
Act, or the securities laws of any state of the United States and may not be offered, sold
or delivered, directly or indirectly, within the United States, except in certain
transactions exempt from, or not subject to, the registration
requirements of the U.S. Securities Act and applicable state
securities laws. This press release does not constitute an offer to
sell or a solicitation of an offer to buy any of these subscription
receipts within the United
States.
About Intact
Intact Financial Corporation 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 $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 Company, a
leading MGA, distributes public entity insurance programs including
risk and claims management services in Canada.
In the U.S., Intact Insurance Specialty Solutions provides a
range of specialty insurance products and services through
independent agencies, regional and national brokers, wholesalers
and managing general agencies. Products are underwritten by the
insurance company subsidiaries of Intact Insurance Group
USA, LLC.
About Caisse de dépôt et placement du Québec
Caisse de dépôt et placement du Québec (CDPQ) is a long-term
institutional investor that manages funds primarily for public and
para-public pension and insurance plans. As at June 30, 2020,
it held CA$333.0 billion in net assets. As one of Canada's leading institutional fund managers,
CDPQ invests globally in major financial markets, private equity,
infrastructure, real estate and private debt. For more information,
visit www.cdpq.com, follow us on Twitter @LaCDPQ or consult
our Facebook or LinkedIn pages.
About Canada Pension Plan Investment Board
Canada Pension Plan Investment Board (CPP Investments™) is a
professional investment management organization that invests around
the world in the best interests of the more than 20 million
contributors and beneficiaries of the Canada Pension Plan. In order
to build diversified portfolios of assets, investments in public
equities, private equities, real estate, infrastructure and fixed
income are made by CPP Investments. Headquartered in Toronto, with offices in Hong Kong, London, Luxembourg, Mumbai, New York
City, San Francisco, São
Paulo and Sydney, CPP Investments
is governed and managed independently of the Canada Pension Plan
and at arm's length from governments. At June 30, 2020, the Fund totalled C$434.4 billion. For more information, please
visit www.cppinvestments.com or follow us
on LinkedIn, Facebook or Twitter.
About Ontario Teachers' Pension Plan
The Ontario Teachers' Pension Plan Board (Ontario Teachers') is
the administrator of Canada's
largest single-profession pension plan, with $204.7 billion in net assets (all figures at
June 30, 2020 unless noted). It holds
a diverse global portfolio of assets, approximately 80% of which is
managed in-house, and has earned an annual total-fund net return of
9.5% since the plan's founding in 1990. Ontario Teachers' is an
independent organization headquartered in Toronto. Its Asia-Pacific regional offices are in
Hong Kong and Singapore, and its Europe, Middle
East & Africa region
office is in London. The
defined-benefit plan, which is fully funded as at January 1, 2020, invests and administers the
pensions of the province of Ontario's 329,000 active and retired teachers.
For more information, visit otpp.com and follow us on
Twitter @OtppInfo.
Forward-looking statements
Certain of the statements included in this press release about
the proposed cornerstone private placement, the proposed
acquisition of RSA (the "Acquisition") or any other future events
or developments constitute forward-looking statements. The words
"may", "will", "would", "should", "could", "expects", "plans",
"intends", "trends", "indications", "anticipates", "believes",
"estimates", "predicts", "likely", "potential" or the negative or
other variations of these words or other similar or comparable
words or phrases, are intended to identify forward-looking
statements. Unless otherwise indicated, all forward-looking
statements in this press release are made as of November 12, 2020, and are subject to change
after that date.
Forward-looking statements are based on estimates and
assumptions made by management based on management's experience and
perception of historical trends, current conditions and expected
future developments, as well as other factors that management
believes are appropriate in the circumstances. In addition to other
estimates and assumptions which may be identified herein, estimates
and assumptions have been made regarding, among other things, the
receipt of all requisite approvals in a timely manner and on terms
acceptable to the Company, the realization of the expected
strategic, financial and other benefits of the Acquisition, and
economic and political environments and industry conditions.
However, the completion of the Acquisition is expected to be
subject to customary closing conditions, termination rights and
other risks and uncertainties, including, without limitation,
regulatory approvals, and there can be no assurance that the
Acquisition will be completed. There can also be no assurance that
if the Acquisition is completed, the strategic and financial
benefits expected to result from the Acquisition will be
realized. Many factors could cause the Company's actual
results, financial performance or condition, or achievements to
differ materially from those expressed or implied by the
forward-looking statements herein, including, without limitation,
the following factors:
- expected regulatory processes and outcomes in connection with
the Company's business;
- the Company's ability to implement its strategy or operate its
business as management currently expects;
- the Company's ability to accurately assess the risks associated
with the insurance policies it writes;
- unfavourable capital market developments or other factors,
including the impact of the COVID-19 pandemic and related economic
conditions, which may affect the Company's investments, floating
rate securities and funding obligations under its pension
plans;
- the cyclical nature of the P&C insurance industry;
- management's ability to accurately predict future claims
frequency and severity, including in the high net worth and
personal auto lines of business;
- government regulations designed to protect policyholders and
creditors rather than investors;
- litigation and regulatory actions, including with respect to
the COVID-19 pandemic;
- periodic negative publicity regarding the insurance
industry;
- intense competition;
- the Company's reliance on brokers and third parties to sell its
products to clients and provide services to the Company and the
impact of COVID-19 and related economic conditions on such brokers
and third parties;
- the Company's ability to successfully pursue its acquisition
strategy;
- the Company's ability to execute its business strategy;
- the uncertainty of obtaining in a timely manner, or at all, the
regulatory approvals required to complete the Acquisition, the
issuance of the subscription receipts and the issuance of the
common shares issuable pursuant to the subscription
agreements;
- unfavourable capital markets developments or other factors that
may adversely affect the Company's ability to finance the
Acquisition;
- the Company's ability to improve its combined ratio, retain
business and achieve synergies and maintain market position arising
from successful integration plans relating to the Acquisition, as
well as management's estimates and expectations in relation to
future economic and business conditions and other factors in
relation to the Acquisition and resulting impact on growth and
accretion in various financial metrics;
- its ability to otherwise complete the integration of the
business acquired within anticipated time periods and at expected
cost levels;
- the Company's dependence on key employees and its ability to
attract and retain key employees in connection with the
Acquisition;
- the Company's ability to achieve synergies arising from
successful integration plans relating to acquisitions
generally;
- the Company's profitability and ability to improve its combined
ratio in the United States;
- the Company's ability to retain and attract new business in
connection with the Acquisition;
- the Company's participation in the Facility Association (a
mandatory pooling arrangement among all industry participants) and
similar mandated risk-sharing pools;
- terrorist attacks and ensuing events;
- the occurrence and frequency of catastrophe events, including a
major earthquake;
- catastrophe losses caused by severe weather and other
weather-related losses, as well as the impact of climate
change;
- the occurrence of and response to public health crises
including epidemics, pandemics or outbreaks of new infectious
diseases, including most recently, the coronavirus (COVID-19)
pandemic and ensuing events;
- the Company's ability to maintain its financial strength and
issuer credit ratings;
- the Company's access to debt and equity financing;
- the Company's ability to compete for large commercial
business;
- the Company's ability to alleviate risk through
reinsurance;
- the Company's ability to successfully manage credit risk
(including credit risk related to the financial health of
reinsurers);
- the Company's ability to contain fraud and/or abuse;
- the Company's reliance on information technology and
telecommunications systems and potential failure of or disruption
to those systems, including in the context of the impact on the
ability of our workforce to perform necessary business functions
remotely, as well as in the context of evolving cybersecurity
risk;
- the impact of developments in technology and use of data on the
Company's products and distribution;
- changes in laws or regulations, including those adopted in
response to COVID-19 that would, for example, require insurers to
cover business interruption claims irrespective of terms after
policies have been issued, and could result in an unexpected
increase in the number of claims and have a material adverse impact
on the Company's results;
- COVID-19 related coverage issues and claims, including certain
class actions and related defence costs could negatively impact our
claims reserves;
- general economic, financial and political conditions;
- the Company's dependence on the results of operations of its
subsidiaries and the ability of the Company's subsidiaries to pay
dividends;
- the volatility of the stock market and other factors affecting
the trading prices of the Company's securities, including in the
context of the COVID-19 crisis;
- the Company's ability to hedge exposures to fluctuations in
foreign exchange rates;
- future sales of a substantial number of the Company's common
shares; and
- changes in applicable tax laws, tax treaties or tax regulations
or the interpretation or enforcement thereof.
All of the forward-looking statements included in this press
release are qualified by these cautionary statements and those made
in the section entitled Risk Management (Sections 22-27) of our
MD&A for the year ended December 31,
2019, the section entitled Risk Management (sections 17-18)
of our MD&A for the quarter ended September 30, 2020 and elsewhere in this press
release. These factors are not intended to represent a complete
list of the factors that could affect the Company. These factors
should, however, be considered carefully. Although the
forward-looking statements are based upon what management believes
to be reasonable assumptions, the Company cannot assure investors
that actual results will be consistent with these forward-looking
statements. Investors should not rely on forward-looking statements
to make decisions, and investors should ensure the preceding
information is carefully considered when reviewing forward-looking
statements contained herein. The Company and management have no
intention and undertake no obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.
Disclaimer
This press release does not constitute or form part of any offer
for sale or solicitation of any offer to buy or subscribe for any
securities nor shall it or any part of it form the basis of or be
relied on in connection with, or act as any inducement to enter
into, any contract or commitment whatsoever.
The information contained in this press release concerning the
Company does not purport to be all-inclusive or to contain all the
information that an investor may desire to have in evaluating
whether or not to make an investment in the Company. The
information is qualified entirely by reference to the Company's
publicly disclosed information and the cautionary note regarding
forward-looking statements included in this press release.
No representation or warranty, express or implied, is made or
given by or on behalf of the Company or any of its the directors,
officers or employees as to the accuracy, completeness or fairness
of the information or opinions contained in this press release and
no responsibility or liability is accepted by any person for such
information or opinions. In furnishing this press release, the
Company does not undertake or agree to any obligation to provide
investors with access to any additional information or to update
this press release or to correct any inaccuracies in, or omissions
from, this press release that may become apparent. The information
and opinions contained in this press release are provided as at the
date of this press release. The contents of this press release are
not to be construed as legal, financial or tax advice. Each
investor should contact his, her or its own legal adviser,
independent financial adviser or tax adviser for legal, financial
or tax advice.
SOURCE Intact Financial Corporation