REG - Ageas Insurance Int. Direct Line Ins Grp Ageas NV - Ageas Confirms Improved Possible Offer

Ageas SAAnnouncement

13/03/2024 11:15

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RNS Number : 7056G  Ageas Insurance International NV  13 March 2024

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

13 March 2024

Ageas SA/NV confirms improved possible offer for Direct Line Insurance Group
Plc

 

Ageas SA/NV ("Ageas") notes the recent announcement by the Board of Direct
Line Insurance Group Plc ("Direct Line") and confirms that it has submitted an
improved possible offer to the Board of Directors of Direct Line to acquire
the entire issued and to be issued share capital of Direct Line (the "Proposed
Transaction").

Ageas confirmed on 28 February 2024 that it had submitted a possible offer
proposal (the "Initial Possible Offer") to the Board of Direct Line on 19
January 2024 to acquire the entire issued and to be issued share capital of
Direct Line. Following the rejection of the Initial Possible Offer by Direct
Line on 29 January 2024, Ageas has improved the terms of its possible offer,
which were shared with the Board of Direct Line on 9 March 2024 (the "Improved
Possible Offer"). Under the terms of Ageas' Improved Possible Offer, Direct
Line shareholders would receive:

·      120 pence in cash for each Direct Line share; and

·      One newly issued Ageas share for every 28.41107 Direct Line
shares.

Based on a Sterling to Euro exchange rate of 1.1705 and the closing price of
Ageas shares on 12 March 2024, being the last date prior to the date of this
announcement, the Improved Possible Offer has an implied value of 239 pence
per Direct Line share, representing a significant premium of 46% to 163.35
pence, being the undisturbed closing share price per Direct Line share on the
business day prior to the announcement of the Initial Possible Offer (27
February 2024). The Improved Possible Offer values the entire issued and to be
issued ordinary share capital of Direct Line at approximately £3,171 million.

The increase in the cash component of the Improved Possible Offer, from 100
pence to 120 pence, allows Direct Line shareholders to realise in cash ~73% of
Direct Line's undisturbed share price, whilst retaining exposure to the
significant value creation upside from the delivery of cost and capital
synergies through their c.20% ownership of the enlarged Ageas Group.

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 continues to recognise the underlying attractiveness and opportunities
of the UK personal lines sector and remains confident 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. Ageas firmly believes that Direct Line being a part of a
strong, diversified financial group will create resilience and stability, and
that it would allow Direct Line, together with Ageas' UK businesses, the
flexibility to execute its strategic agenda and make the optimal investments
required to future proof the business and secure being a reference UK
insurance company in personal lines in the UK.

Ageas continues to seek engagement from the Direct Line Board ahead of the
deadline of 27 March 2024 under the Code, in order to work collaboratively
towards a recommended Firm Offer.

Commenting on the possible offer, Hans De Cuyper, CEO of Ageas, said:

"We have made a compelling possible offer that represents a substantial
premium to Direct Line's undisturbed share price. Our Improved Possible Offer
delivers substantial cash proceeds to Direct Line shareholders, whilst
ensuring they benefit from the material value creation that we believe the
combination of the UK businesses of Ageas and Direct Line will deliver. We
look forward to engaging with the Direct Line Board of Directors on the terms
of our Improved Possible Offer."

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.

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 of the 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 Improved Possible Offer,
agreement of the detailed terms of the Improved 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 is 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.

 

 

BofA Securities (Lead Financial Adviser to Ageas
SA/NV)
+44 (0) 20 7628 1000

Jonathan Alpert

Geoff
Iles

Marcus Jackson

Benjamin Ries

Sid Rishi

 

Deutsche Bank AG (Financial Adviser to Ageas
SA/NV)
+44 (0) 20 7545 8000

Marie-Soazic Geffroy

Hubert Vannier

Derek Shakespeare

Inigo de Areilza

Charles Farquhar

 

FGS Global (PR Adviser to Ageas SA/NV)
 
+44 (0) 20 7251 3801 / Ageas-UK@fgsglobal.com

James Leviton

Chris Sibbald

 

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.

 

Deutsche Bank AG is a stock corporation (Aktiengesellschaft) incorporated
under the laws of the Federal Republic of Germany with its principal office in
Frankfurt am Main. It is registered with the local district court
(Amtsgericht) in Frankfurt am Main under No HRB 30000 and licensed to carry on
banking business and to provide financial services. The London branch of
Deutsche Bank AG is registered as a branch office in the register of companies
for England and Wales at Companies House (branch registration number BR000005)
with its registered branch office address and principal place of business at
21, Moorfields, London EC2Y 9DB. Deutsche Bank AG is subject to supervision by
the European Central Bank (ECB), Sonnemannstrasse 22, 60314 Frankfurt am Main,
Germany, and the German Federal Financial Supervisory Authority (Bundesanstalt
für Finanzdienstleistungsaufsicht or BaFin), Graurheindorfer Strasse 108,
53117 Bonn and Marie-Curie-Strasse 24-28, 60439 Frankfurt am Main, Germany.
With respect to activities undertaken in the United Kingdom, Deutsche Bank AG
is authorised by the Prudential Regulation Authority. It is subject to
regulation by the Financial Conduct Authority and limited regulation by the
Prudential Regulation Authority. Details about the extent of Deutsche Bank
AG's authorisation and regulation by the Prudential Regulation Authority are
available from Deutsche Bank AG on request.

 

Deutsche Bank AG, acting through its London branch ("Deutsche Bank") is acting
as a financial adviser to Ageas and no-one else in connection with the matters
described in this announcement and will not be responsible to anyone other
than Ageas for providing the protections afforded to clients of Deutsche Bank,
nor for providing advice in connection with the subject matter of this
announcement or any other matter 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.

 

 

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

 

A copy of this announcement will be available, subject to certain restrictions
relating to persons resident in restricted jurisdictions, at
https://www.ageas.com/investors/webpage-related-ageass-possible-offer-direct-line
(https://www.ageas.com/investors/webpage-related-ageass-possible-offer-direct-line)
by no later than 12 noon (London time) on 14 March 2024. The content of the
website referred to in this announcement is not incorporated into and does not
form part of this announcement.

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 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 50,000 people and reported annual inflows of
more than EUR 17 billion in 2023.

 

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