Ageas SA/NV confirms possible offer for Direct Line Insurance Group
Plc (Une version FR suivra)
Regulated information • Inside
information • Brussels, 28
February 2024 - 14:00 (CET)
NOT FOR RELEASE, PUBLICATION OR
DISTRIBUTION (IN WHOLE OR IN PART), DIRECTLY OR INDIRECTLY, IN,
INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A
VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT
JURISDICTION.
THIS IS AN ANNOUNCEMENT FALLING UNDER RULE
2.4 OF THE UK 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.
FOR IMMEDIATE RELEASE
Ageas SA/NV confirms possible offer for Direct
Line Insurance Group Plc
Ageas SA/NV (“Ageas”) notes the recent press
speculation in relation to Direct Line Insurance Group Plc (“Direct
Line”) and confirms that it is in the preliminary stages of
considering a possible offer (“Possible Offer”) to
acquire the entire issued and to be issued share capital of Direct
Line (the “Proposed Transaction”). Ageas firmly
believes that the combination of Ageas’ and Direct Line’s UK
businesses will be beneficial for both Ageas and Direct Line
shareholders, providing a meaningful opportunity to unlock
shareholder value through the delivery of significant operational
and capital synergies.
Terms of the Possible Offer
Ageas believes the Proposed Transaction
represents compelling strategic and financial value for both Ageas
and Direct Line shareholders.
Under the terms of Ageas’ Possible Offer, Direct
Line shareholders would receive:
- 100 pence in
cash for each Direct Line share; and
- One newly issued
Ageas share for every 25.24047 Direct Line shares.
Based on a Sterling to Euro exchange rate of
1.169 and the closing price of Ageas and Direct Line shares on 27
February 2024, being the last date prior to the date of this
announcement, the Possible Offer has an implied value of 233 pence
per Direct Line share, representing a premium of 42.8% to 163.35
pence, being the closing price per Direct Line share.
The Possible Offer values the entire issued and
to be issued ordinary share capital of Direct Line at approximately
£3,095 million. On the basis of Ageas’ Possible Offer, Direct Line
shareholders would, on completion of the Proposed Transaction, own
approximately 22% of the enlarged Ageas Group’s issued share
capital.
It is currently envisaged that the cash
component of the consideration and associated transaction costs
will ultimately be financed through a mix of existing cash and
newly issued debt instruments. The share consideration is intended
to be satisfied via newly issued Ageas shares.
Ageas reserves the right to make an offer for
Direct Line on less favourable terms than those set out in this
announcement: (i) with the agreement or recommendation of the
Direct Line Board; (ii) if a third party announces a possible offer
or firm intention to make an offer for Direct Line which, at that
date, is of a value less than the value implied by the Possible
Offer; or (iii) if Direct Line announces a Rule 9 waiver pursuant
to the Code or a reverse takeover. Ageas reserves the right to
introduce other forms of consideration and/or vary the mix or form
of consideration of any offer. Ageas reserves the right to reduce
the offer consideration to take account of the value of any
dividend or other distribution which is announced, declared, made
or paid by Direct Line after the date of this announcement.
Strategic rationale
The Proposed Transaction is in line with Ageas’
stated M&A criteria and Impact24 ambitions, as it would further
strengthen Ageas’ position in a European market where it already
operates, whilst rebalancing Ageas’ business profile towards
controlled entities and Non-Life business.
Ageas is confident in the underlying
attractiveness and future opportunities of the UK personal lines
sector. Over the long-term, the UK personal lines sector has proven
to be structurally profitable and, through its own UK operations,
Ageas sees its strong potential. Over the last 12 months, many of
the UK sector fundamentals have improved as claims patterns and
frequency have stabilised, while an evolution towards a healthier
and more predictable market is being observed thanks to developing
regulatory clarity and pricing practice changes. The repricing
implemented in the sector in response to elevated inflation levels
further underpins its resilience. Ageas has made significant
progress with the repositioning of its UK business, as communicated
during its Investor Day in November 2023, and is confident that the
UK will play an important role in Ageas’ future growth ambitions by
further strengthening one of Ageas’ home markets.
Ageas believes that the combination of Ageas’
and Direct Line’s complementary UK businesses would lead to the
creation of a strong personal lines franchise in the UK with key
positions in Ageas’ preferred business lines of Household and
Motor. This combination would benefit from highly complementary
distribution models founded on the combination of Ageas’ strong
relationships with intermediary distribution partners and Direct
Line’s strong brand recognition for direct and Price Comparison
Websites distribution. Furthermore, Ageas remains confident in its
capacity to pursue sustainable and profitable growth through this
transaction, underpinned by the delivery of operational synergies,
scaling up the knowledge in domains like product innovation
capabilities, best-in-class customer service and the unique ability
to leverage Data Analytics.
By enhancing Ageas’ position in the UK market,
the Proposed Transaction would create a significant engine for the
Ageas Group to drive enhanced capital, earnings and cash
generation, underpinning its progressive dividend ambitions.
Ageas strongly believes the Proposed Transaction
would create additional value for all Ageas’ stakeholders, whose
interests have been carefully taken into account.
In the meantime, Ageas UK is operating business
as usual, and continues to execute its focused and successful
personal lines insurance strategy delivering on long term organic
growth plans alongside its valued distribution partners.
Financial rationale
The Proposed Transaction offers a unique
opportunity to unlock significant value and deliver accretion to
Ageas’ Operational Capital Generation through the delivery of
substantial operational and capital synergies.
Based on Ageas’ outside-in analysis undertaken
to date, it sees potential to drive operational improvements and
efficiencies through the sharing of best-practices and the removal
of overlapping overhead costs after the integration of Ageas’ and
Direct Line’s UK businesses.
In the medium term, the Proposed Transaction is
expected to deliver a highly attractive return on the equity
capital invested. The benefits from the Proposed Transaction are
also expected to increase the enlarged Group’s financial and
strategic flexibility, underpinning its progressive dividend
ambitions. The financing of the Proposed Transaction as currently
envisaged will allow Ageas to maintain a robust Solvency II
position above Ageas’ risk appetite levels and sound leverage
ratios. The adoption of a Group-wide Non-Life PIM (Partial Internal
Model) is expected to generate enhanced capital efficiencies.
Ageas strongly believes that its proposal is in
the interest of both Ageas’ and Direct Line’s shareholders and
looks forward to further discussing this proposal with Direct
Line’s Board of Directors.
A further announcement will be made if and when
appropriate.
Additional information
Ageas continues to carefully assess the Proposed
Transaction with a disciplined focus on the strategic and financial
rationale, and there can be no certainty that an offer will be
made, even if the pre-conditions are satisfied or waived.
This announcement does not constitute an
announcement of a firm intention to make an offer under Rule 2.7
Code. The announcement of a firm intention to make an offer under
Rule 2.7 of the Code remains subject to the satisfaction or waiver
by Ageas of a number of pre-conditions, including, among others,
completion of satisfactory due diligence by Ageas and reciprocal
due diligence by Direct Line, receipt of irrevocable undertakings
from each member of the Direct Line Board of Directors who holds
Direct Line shares and Direct Line shareholders to vote in favour
of the Possible Offer, agreement of the detailed terms of the
Possible Offer and the unanimous and unqualified recommendation of
the Board of Direct Line. Ageas reserves the right to waive in
whole or in part any pre-conditions.
In accordance with Rule 2.6(a) of the Code,
Ageas will be required, by not later than 5.00 pm (London time) on
27 March 2024, to either announce a firm intention to make an offer
for Direct Line in accordance with Rule 2.7 of the Code or announce
that Ageas does not intend to make an offer for Direct Line, in
which case the announcement will be treated as a statement to which
Rule 2.8 of the Code applies. This deadline can only be extended
with the consent of the UK Takeover Panel in accordance with Rule
2.6(c) of the Code.
Enquiries:
BofA Securities (Financial Adviser to Ageas
SA/NV) +44
(0) 20 7628 1000Jonathan AlpertGeoff IlesMarcus JacksonBenjamin
K.J. RiesSid Rishi
Linklaters LLP is acting as legal adviser to
Ageas.
Merrill Lynch International ("BofA Merrill
Lynch"), which is authorised by the UK Prudential Regulatory
Authority and regulated by the UK Financial Conduct Authority and
the UK Prudential Regulatory Authority, is acting exclusively for
Ageas and for no one else in connection with the possible offer for
Direct Line and will not be responsible to anyone other than Ageas
for providing the protections afforded to its clients or for
providing advice in relation to the matters referred to in this
announcement.
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 UK 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.
Rule 2.4 information
In accordance with Rule 2.4(c)(iii) of the Code,
Ageas confirms that it is not aware of any dealings in Direct Line
shares that would require it to offer a minimum level, or a
particular form, of consideration under Rule 6 or Rule 11 of the
Code. However, it has not been practicable for Ageas to make
enquiries of all persons acting in concert with it prior to the
date of this announcement in order to confirm whether any details
are required to be disclosed under Rule 2.4(c)(iii) of the Code. To
the extent that any such details are identified following such
enquiries, Ageas shall make an announcement disclosing such details
as soon as practicable, and in any event by no later than the time
it is required to make its Opening Position Disclosure under Rule
8.1 of the Code.
Rule 2.9 requirement
In accordance with Rule 2.9 of the Code, Ageas
confirms that as at the date of this announcement, it has an issued
capital of EUR 1,502,364,272.60, represented by 187,971,187 shares.
4,300,402 shares are held in treasury. 1,219,048 of the shares held
in treasury are pledged to cover the obligations towards the 1,536
outstanding floating rate equity-linked subordinated hybrid (FRESH)
capital securities issued by a subsidiary of Ageas which, in
certain circumstances and subject to certain conditions, can be
exchanged by the holders into Ageas shares. The International
Securities Identification Number (ISIN) of the ordinary shares is
BE0974264930.
Ageas also has an ADR program for which JPMorgan
Chase Bank, N.A. acts as depositary. Each Ageas ADR represents one
ordinary share of Ageas. The Ageas ADRs trade on the Over The
Counter market. The trading symbol for the Ageas ADRs is AGESY and
the ISIN is US00844W2089.
Website publication
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.ageas.com by no later than 12 noon (London
time) on 29 February 2024. The content of the website referred to
in this announcement is not incorporated into and does not form
part of this announcement.
No profit forecasts or
estimates
Except as otherwise set out herein, nothing in
this announcement (including any statement of estimated synergies)
is intended as a profit forecast or estimate for any period and no
statement in this announcement should be interpreted to mean that
earnings or earnings per share or dividend per share for Ageas or
Direct Line, as appropriate, for the current or future financial
years would necessarily match or exceed the historical published
earnings or earnings per share or dividend per share for Ageas or
Direct Line, as appropriate.
Important information
This announcement and the information within it
is not intended to, and does not, constitute or form part of any
offer, invitation or the solicitation of an offer to purchase or
subscribe for, sell or otherwise dispose of, any securities whether
pursuant to this announcement or otherwise, nor shall there be any
sale, issuance or transfer of securities in any jurisdiction in
contravention of applicable law. In particular, this announcement
is not an offer of securities for sale into the United States. No
offer of securities shall be made in the United States absent
registration under the Securities Act of 1933, as amended, or
pursuant to an exemption from, or in a transaction not subject to,
such registration requirements. No statement contained or referred
to in this announcement is intended to be a profit forecast.
This announcement has been prepared in
accordance with English law and information disclosed may not be
the same as that which would have been prepared in accordance with
the laws of jurisdictions outside England.
The release, publication or distribution of this
announcement in jurisdictions outside the United Kingdom may be
restricted by law and therefore persons into whose possession this
announcement comes should inform themselves about, and observe,
such restrictions. Any failure to comply with such restrictions may
constitute a violation of the securities law of any such
jurisdiction.
Ageas is a listed international
insurance Group with a heritage spanning almost 200 years. It
offers Retail and Business customers Life and Non-Life insurance
products designed to suit their specific needs, today and tomorrow,
and is also engaged in reinsurance activities. As one of Europe's
larger insurance companies, Ageas concentrates its activities in
Europe and Asia, which together make up the major part of the
global insurance market. It operates successful insurance
businesses in Belgium, the UK, Portugal, Türkiye, China, Malaysia,
India, Thailand, Vietnam, Laos, Cambodia, Singapore, and the
Philippines through a combination of wholly owned subsidiaries and
long term partnerships with strong financial institutions and key
distributors. Ageas ranks among the market leaders in the countries
in which it operates. It represents a staff force of about 44,000
people and reported annual inflows of more than EUR 17 billion in
2023.
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