GBP 3.5 BN DEAL - Recommended Cash Offer for AMLIN PLC by MITSUI SUMITOMO INSURANCE COMPANY, LTD
Recommended Cash Offer
for
AMLIN PLC
by
MITSUI SUMITOMO INSURANCE COMPANY, LIMITED
(to be implemented by way of a scheme of arrangement under Part 26 of the Companies Act)
Summary
· Mitsui Sumitomo Insurance Company, Limited ("MSI") and Amlin plc ("Amlin") are pleased to announce that they have reached agreement on the terms of a recommended cash offer pursuant to which MSI will acquire the entire issued and to be issued share capital of Amlin. It is intended that the Acquisition be implemented by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act. MSI is a wholly-owned subsidiary of MS&AD Insurance Group Holdings, Inc. ("MS&AD").
· Under the terms of the Acquisition, Amlin Shareholders will be entitled to receive:
for each Amlin Share 670 pence in cash
· In addition, Amlin Shareholders on the record date (4 September 2015) will be entitled to receive the interim dividend of 8.4 pence per Amlin Share for the period ended 30 June 2015 that is payable on 1 October 2015 (the "Dividend"), which was announced with Amlin's interim results on 24 August 2015.
· The Acquisition values the entire issued and to be issued share capital of Amlin at approximately £3,468 million (approximately ¥ 634.7 billion).
· The Consideration represents a premium of approximately:
o 36.0 per cent. over the Closing Price of 492.5 pence per Amlin Share on 7 September 2015 (being the latest practicable date prior to this Announcement);
o 32.9 per cent. to the volume weighted average Closing Price per Amlin Share for the one month period up to and including 7 September 2015 (being the latest practicable date prior to this Announcement); and
o 33.8 per cent. to the volume weighted average Closing Price per Amlin Share for the three month period up to and including 7 September 2015 (being the latest practicable date prior to this Announcement).
· The Consideration represents a multiple of 2.4x to Amlin's net tangible book value per share (on a fully diluted basis) as at 30 June 2015 of 275.2 pence.
· It is intended that the Acquisition will be implemented by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act (or, if MSI elects, subject to the terms of the Co-operation Agreement and with the consent of the Panel, an Offer). The Acquisition is conditional on, among other things, (i) the approval of Amlin Shareholders at the Court Meeting and the passing of the Resolutions by Amlin Shareholders at the General Meeting and (ii) the sanction of the Scheme by the Court.
· The Amlin Directors, who have been so advised by Evercore and Rothschild as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing their advice to the Amlin Directors, Evercore and Rothschild have taken into account the commercial assessments of the Amlin Directors. Accordingly, the Amlin Directors intend to recommend unanimously that Amlin Shareholders vote or procure votes in favour of the Scheme at the Court Meeting and the Resolutions at the General Meeting, or in the event that the Acquisition is implemented by way of an Offer, Amlin Shareholders accept or procure acceptance of the Offer, as the Amlin Directors who hold Amlin Shares have irrevocably undertaken to do in respect of their entire beneficial holdings in Amlin amounting to, in aggregate, 3,996,617 Amlin Shares, representing approximately 0.8 per cent. of the Amlin issued share capital.
· MSI has also received irrevocable undertakings to vote or procure votes in favour of the Scheme at the Court Meeting and the Resolutions at the General Meeting (or in the event that the Acquisition is implemented by way of an Offer, to accept or procure acceptance of the Offer) from Invesco Asset Management Limited and Majedie Asset Management Limited in respect of 76,716,310 Amlin Shares, in aggregate, representing approximately 15.2 per cent. of Amlin's issued share capital.
· As a result, holders of a total of 80,712,927 Amlin Shares, representing approximately 16.0 per cent. of Amlin's issued share capital have either committed to vote or procure votes in favour of the Scheme at the Court Meeting and the Resolutions at the General Meeting (or in the event that the Acquisition is implemented by way of an Offer, accept or procure acceptance of the Offer).
· MSI is a major subsidiary of MS&AD, the global insurance group that is listed in Japan and is a leader in Japan in the non-life insurance market. MSI, which was founded in 1918, operates a portfolio of non-life insurance businesses, including in the marine, aviation, property and casualty categories. MSI currently operates in 42 countries and regions under the "MSIG" brand, including through a Lloyd's platform in London. MSI delivered reported net premiums written of ¥ 1,696,608 million (approximately £9,271 million) and net income of ¥ 105,233 million (approximately £575 million) in the 12 months ended 31 March 2015. As at 7 September 2015, MS&AD had a market capitalisation of ¥ 2,320 billion (approximately £12.7 billion).
· Amlin is a leading global specialty insurer and reinsurer, operating internationally across twenty locations worldwide, which is headquartered in London and listed on the London Stock Exchange. Tracing its origins back to 1903, Amlin is today organised in three strategic business units for reinsurance, marine & aviation and property & casualty. The Amlin Group currently has three separately capitalised underwriting platforms: Syndicate 2001 at Lloyd's, Amlin AG (Switzerland) and Amlin Europe N.V. (Netherlands), and employs approximately 1,900 people. Amlin delivered reported gross premiums written of £2,564.0 million and net income of £236.4 million in the 12 months ended 31 December 2014.
· Further details of the Acquisition will be contained in the Scheme Document which is intended to be posted to Amlin Shareholders along with notices of the Court Meeting and General Meeting and the Forms of Proxy within 28 days of the date of this Announcement, unless MSI and Amlin otherwise agree, and the Panel consents, to a later date. Subject to certain restrictions relating to persons resident in Restricted Jurisdictions, the Scheme Document will also be made available on MSI's website www.ms-ins.com/english and Amlin's website http://www.amlin.com/investors.aspx.
· Commenting on the Acquisition, Yasuyoshi Karasawa, President and Chief Executive Officer of MSI, said:
"We are delighted to be announcing the combination of MSI and Amlin to create a world-leading insurance company, with an international business anchored in the Lloyd's market. The combination will accelerate MSI's strategy of growing its international business, and drive a number of benefits across Amlin's business as a result of it being part of a substantially larger group.
We believe this combination will create significant value for MS&AD's shareholders, and will also position the group to drive sustainable long term growth given the enhanced platform that the combined group will enjoy. This transaction will also allow us to better serve our clients and brokers, given the enhanced product mix and scale of the combined group.
We look forward to welcoming Amlin's management team and employees to the MSI organisation. In particular, we are excited about the opportunity to benefit from the strategic insight that Charles Philipps and his colleagues will be able to provide in our international business following completion of the proposed transaction."
· Commenting on the Acquisition, Charles Philipps, Chief Executive of Amlin, said:
"We believe that this combination is extremely compelling. We have always had a very high regard for MSI, our strategies and corporate values are closely aligned, and this transaction will now provide Amlin with the increased scale and financial muscle that will be required for long term success in our industry. It delivers excellent value for shareholders, improved career prospects for our employees, and enhanced continuity and security for our clients.
I am confident that, with our combined skills and geographic coverage, we will continue to go from strength to strength. We believe that our respective Lloyd's, Bermudian and European businesses fit well together and will allow increased development opportunities. MSI's presence in the ASEAN region and its ambitions in the United States clearly offer very exciting prospects for Amlin.
We are looking forward to working closely with MSI's management and the MSI teams with whom we will be combining."
Enquiries
This summary should be read in conjunction with the full text of the following Announcement and its appendices.
The Conditions to, and certain further terms of, the Acquisition, are set out in Appendix I. Appendix II to this Announcement contains certain sources of information and bases of calculation contained in this Announcement. Information in respect of the Irrevocable Undertakings is set out in Appendix III to this Announcement. Certain terms used in this Announcement are defined in Appendix IV to this Announcement.