REG - Financials Acqn.Corp Financials Acqn-FNWR - Update on Proposed Transaction

Financials AcquisitionAnnouncement

08/09/2023 07:00

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RNS Number : 8441L  Financials Acquisition Corp  08 September 2023

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8 September 2023

Update on Proposed Transaction

Financials Acquisition Corp

(the "Company")

Financials Acquisition Corp (the "Company") announces that London Innovation
Underwriters Limited ("LIU") has separately been established in order to
implement its strategy of becoming a listed operating company deploying funds
into the Lloyd's of London insurance market (the "Proposed Transaction").

 

It is intended that the Proposed Transaction will be implemented through a
business combination with LIU, which will seek to raise a significant sum of
equity capital through a listing of LIU on the Main Market of the London Stock
Exchange (the "Capital Raising"). A further announcement will be made by the
Company when the business combination agreement has been entered into.

 

The Lloyd's of London insurance market has a strong track record of innovation
and underwriting expertise which LIU intends to access, via London Bridge 2
PCC Ltd ("LB2"), a third party protected cell risk transformation vehicle
which allows easier access for institutional capital into the Lloyd's
insurance market. The Company believes that through its combination with LIU,
it can create an efficient vehicle for investors to access attractive returns
in the Lloyd's insurance market without paying significant goodwill or adding
further fee structures.

 

The Lloyd's market is currently experiencing its best rating environment in
many years, as evidenced by yesterday's H1 results which showed an 85.2%
combined ratio after 22 consecutive quarters of positive price improvement. It
is intended that LIU will provide investors with capital efficient access to
some of the best underwriting in the Lloyd's market and that the Core
Syndicate book will comprise of established syndicates which have been chosen
for their underwriting expertise and diversification benefit.  The Company
will also look to substantively replicate the performance of Lloyd's through a
similar sized Broad Market Exposure book, as well as establishing an
Innovation and Seed book to gain exposure to growth syndicates focused on
fast-growing risk classes, new approaches to data in underwriting, and new
models of risk transformation. Based upon current market conditions the
Company will be targeting an average return on equity of more than 20% over
the next five years.

 

The Company believes that its management team and board of directors have the
skills and relationships with some of the best underwriters in the Lloyd's
market to execute this strategy. Working with AON as a core reinsurance
broker, LIU has secured significant conditional capacity commitments from
syndicates which it intends to support by deploying proceeds raised in the
Capital Raising as Funds At Lloyd's (FAL) through LB2. LIU has set up LIU
Corporate Member Ltd as its wholly owned subsidiary and as a corporate member
to provide the FAL. LIU is working with Argenta as a members agent, who will
manage the research, reporting and analysis allowing LIU to fine tune the
portfolio of syndicates. The book of reinsurance is currently anticipated to
have a capital requirement below 50%, which would give LIU sufficient capital
to support up to £1 billion of capacity assuming a successful completion of
the Proposed Transaction.

 

The Company has engaged UBS AG London Branch ("UBS") and HSBC Bank plc
("HSBC") as Joint Global Co-ordinators and Joint Bookrunners, and The Growth
Stage Limited ("TGS"), Panmure Gordon (UK) Limited ("Panmure") and Stifel
Nicolaus Europe Limited (trading as Keefe, Bruyette & Woods) ("KBW") as
Co-Bookrunners to the proposed capital raise.

 

Will Allen, Chief Executive Officer of the Company said:

 

"We believe LIU will offer a unique opportunity for investors to gain
efficient access and diversified exposure to the Lloyd's market with
liquidity. We are pleased with the initial reaction we have received from both
investors and underwriters and look forward to the next stage of the
transaction."

Enquiries

Financials Acquisition Corp

William Allen (Chief Executive Officer)

will@fins.ac (mailto:will@fins.ac)

 

FGS Global (Financial PR advisor to the Company)
Conor McClafferty

Charlie Chichester

+44 20 7251 3801
FINSAC-LON@fgsglobal.com (mailto:FINSAC-LON@fgsglobal.com)

The information contained in this announcement is deemed by the Company to
constitute inside information for the purposes of Article 7 of the UK Market
Abuse Regulation. By publication of this announcement via a Regulatory
Information Service, this inside information is now considered to be in the
public domain. The person responsible for arranging for the release of this
announcement on behalf of the Company is William Allen, Chief Executive
Officer.

The Company's LEI is 254900SWRQCI5ZUQEF15.

DISCLAIMER

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do not constitute an offer to sell or an invitation to subscribe for, or the
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"Securities") of the Company in any jurisdiction where such an offer or
solicitation is unlawful. The Securities may not be offered or sold in the
United States absent registration or an exemption from registration under the
U.S. Securities Act of 1933, as amended (the "Securities Act"). There will be
no public offering of the Securities in the United States. The Securities have
not been, and will not be, registered under the Securities Act or under the
applicable securities laws of Australia, Canada, Japan or South Africa. The
Securities referred to herein may not be offered or sold in Australia, Canada,
Japan or South Africa or to, or for the account or benefit of, any national,
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This publication constitutes neither an offer to sell nor a solicitation to
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made on the basis of the FCA-approved prospectus, which will be published in
due course if the Company is able to agree the terms of any Business
Combination and enter into definitive binding agreements in respect of such
transaction and will be available free of charge on the Company's website.

 

This announcement does not constitute a prospectus. In the United Kingdom,
this announcement is only being distributed to, and is only directed at,
"qualified investors", within the meaning of Regulation (EU) 2017/1129 as it
forms part of retained EU law as defined in the European Union (Withdrawal)
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which this announcement relates is only available to Relevant Persons and will
be engaged only with Relevant Persons.

 

The Company has not authorised any offer to the public of Securities in any
Member State of the European Economic Area. With respect to any Member State
of the European Economic Area (each a "Relevant Member State"), no action has
been undertaken or will be undertaken to make an offer to the public of
Securities requiring publication of a prospectus in any Relevant Member State.
As a result, the Securities may only be offered in Relevant Member States to
persons who are "qualified investors" within the meaning of Article 1(4)(a)
and Article 2(e) of Regulation (EU) 2017/1129, as amended.

This announcement may contain forward-looking statements. The forward-looking
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or the Directors' expectations, hopes, beliefs, intentions or strategies
regarding the future. In addition, any statement that refers to projections,
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words "anticipate", "believe", "continue", "could", "estimate", "expect",
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Forward-looking statements include all matters that are not historical facts.
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assumptions regarding the Company, a Business Combination, the business, the
economy and other future conditions. Because forward-looking statements relate
to the future, by their nature, they are subject to inherent uncertainties,
risks and changes in circumstances that are difficult to predict.
Forward-looking statements are not guarantees of future performance and the
Company's actual financial condition, actual results of operations and
financial performance, and the development of the industries in which it
operates or will operate, may differ materially from those made in or
suggested by the forward-looking statements contained in this announcement. In
addition, even if the Company's financial condition, results of operations and
the development of the industries in which it operates or will operate, are
consistent with the forward-looking statements contained in this announcement,
those results or developments may not be indicative of financial condition,
results of operations or developments in subsequent periods. Important factors
that could cause actual results to differ materially from those in the
forward-looking statements include regional, national or global, political,
economic, social, business, technological, competitive, market and regulatory
conditions.

Any forward-looking statement contained in this announcement applies only as
of the date of this announcement and is expressly qualified in its entirety by
these cautionary statements. Factors or events that could cause the Company's
actual results to differ may emerge from time to time, and it is not possible
for the Company to predict all of them. The Company expressly disclaims any
obligation or undertaking to release publicly any updates or revisions to any
forward-looking statements contained in this announcement to reflect any
change in its expectations or any change in events, conditions or
circumstances on which any forward-looking statement contained in this
announcement is based, unless required to do so by applicable law, the
Prospectus Regulation Rules, the Listing Rules, the Disclosure Guidance and
Transparency Rules of the Financial Conduct Authority ("FCA") or the UK Market
Abuse Regulation.

None of the Banks, nor any of their respective subsidiaries, holding
companies, branches or affiliates nor any of their respective directors,
officers, employees, agents or advisers owes or accepts any duty,
responsibility or liability whatsoever (whether direct or indirect and whether
arising in contract, in tort, under statute or otherwise) to any person in
relation to this announcement or for any acts or omissions of the Company, and
no representation or warranty, express or implied, is made by any of them as
to the contents of this announcement, including its accuracy, completeness,
verification or sufficiency, or for any other statement made or purported to
be made by the Company, or on its behalf, or by any of the Banks, or on their
behalf, in connection with the Company, LIU, nor any of their respective
subsidiaries or associated companies, and nothing in this announcement should
be relied upon as a promise or representation in this respect, whether or not
to the past or future. To the fullest extent permitted by law, each of the
Banks and their respective subsidiaries, holding companies, branches and
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advisers accordingly disclaim all and any responsibility or liability
whatsoever (whether direct or indirect and whether arising in tort, contract,
under statute or otherwise), which they might otherwise have in respect of
this announcement.

UBS is authorised and regulated by the Financial Market Supervisory Authority
in Switzerland. It is authorised by the Prudential Regulation Authority
("PRA") and subject to regulation by the FCA and limited regulation by the PRA
in the United Kingdom.

HSBC is authorised by the Prudential Regulation Authority and regulated in the
United Kingdom by the Financial Conduct Authority and the Prudential
Regulation Authority.

Each of Panmure, KBW and TGS is authorised and regulated in the United Kingdom
by the FCA.

Each of the Banks are acting exclusively for the Company in connection with
the process or contents of this announcement. In connection with such matters,
each of the Banks will not regard any other person as its client, nor will it
be responsible to any other person for providing the protections afforded to
its clients or for providing advice in relation to the process, contents of
this announcement or any other matter referred to herein.

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