Announcement of Redomiciliati
Beazley Group plc - Announcement of Redomiciliation
THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS AND INVESTORS SHOULD NOT SUBSCRIBE FOR, OR PURCHASE, ANY SECURITIES REFERRED TO IN THIS ANNOUNCEMENT EXCEPT ON THE BASIS OF INFORMATION CONTAINED IN THE PROSPECTUS PUBLISHED BY BEAZLEY PLC IN CONNECTION WITH THE PROPOSED SCHEME REFERRED TO BELOW. THE PROSPECTUS IS AVAILABLE ON BEAZLEY GROUP PLC'S WEBSITE AND IS AVAILABLE FOR INSPECTION AT THE UK LISTING AUTHORITY'S DOCUMENT VIEWING FACILITY.
London, March 24, 2009
On 13 February 2009, Beazley Group plc ('Beazley') announced its intention to change its corporate structure by putting in place a new parent company for the Beazley Group, Beazley plc ('New Beazley'), which will be UK listed, incorporated in Jersey and tax resident in the Republic of Ireland (the 'Proposals'). Beazley today announces that a circular setting out full details of the Proposals has been sent to shareholders. A prospectus in relation to New Beazley has also been published and filed with the Financial Services Authority. The prospectus and the circular will also be available for download to eligible persons from the Investor Relations section of Beazley's website www.beazley.com.
Key features of the Proposals
|
|
New Beazley will become the new parent company of the Beazley Group by way of a court sanctioned scheme of arrangement under the Companies Acts 1985 and 2006 (the 'Scheme') |
|
|
|
|
|
Under the Scheme, shareholders of Beazley will receive one share in New Beazley for each share held in Beazley (Beazley shareholders will not be required to pay any amount for the New Beazley shares issued under the Scheme) |
|
|
|
|
|
Application will be made for New Beazley shares to be listed on the London Stock Exchange and New Beazley is expected to replace Beazley as a member of the FTSE 250 Index |
|
|
|
|
|
The Proposals will not result in any changes in the day-to-day conduct of the Beazley Group's business or its strategy and New Beazley will continue to report results in sterling |
|
|
|
|
|
The Proposals will not make any substantial changes to corporate governance, to existing shareholder protection measures nor to the existing dividend policy and share repurchase programme of Beazley |
|
|
|
|
|
New Beazley will put in place a dividend access plan to ensure that New Beazley shareholders may elect to continue to receive UK sourced dividends |
|
|
|
|
|
The implementation of the Proposals is not expected to have any adverse tax implications for Beazley shareholders |
|
|
|
|
|
The Proposals will have no impact on the rights issue and placing announced by Beazley on 13 February 2009 |
Background to and reasons for the Proposals
Beazley has evolved, since establishment, from a small, private Lloyd's-based managing agent into a publicly-quoted specialist (re)insurer with sizeable underwriting operations at Lloyd's and in the US, supported by a network of international offices to facilitate distribution in Australia, Hong Kong, Singapore, France and Germany. In the context of the Beazley Group's significant international expansion, the Beazley Directors have reviewed the Beazley Group's current organisational, operating and capital structure to assess its ability to support the Beazley Group's strategy and maximise Beazley shareholder value. Following this review, the Beazley Directors have concluded that the establishment of a new holding company, New Beazley, incorporated in Jersey and tax resident in Ireland is in the best interests of Beazley shareholders. Once implemented, this new structure will result in the Beazley Group operating under New Beazley and the establishment of a newly incorporated Irish reinsurer, Beazley Re, which has submitted an application for authorisation to carry on reinsurance business to the Irish Financial Regulator ('IFR'). The issuance of the authorisation and the timing of the issuance are matters within the discretion of the IFR. Provided however, that all issues raised by the IFR in connection with the application for authorisation have been satisfactorily addressed, it is anticipated that the authorisation will be issued following one of the IFR board's monthly meetings.
The Beazley Directors believe that the Proposals will provide a favourable operating base from which to develop the business and financial benefits to the Beazley Group which are consistent with its strategy to improve its distribution access, maximise its capital efficiency and increase its return on equity. The Beazley Board considers that the establishment of Irish tax residency for New Beazley as the parent company of the Beazley Group and the establishment of Beazley Re is in the best interests of shareholders as it:
|
(a) |
Provides flexibility to write reinsurance business across the EU through passporting arrangements should the Beazley Group wish to do so in the future |
|
|
Ireland was the first country to implement the European Reinsurance Directive (Directive 2005/68/EC) which provides for a single passporting regime within the EU for reinsurers. Beazley Re's reinsurance licence is expected upon issuance to enable the Beazley Group to write third party reinsurance on a pan-EU basis should it wish to do so in the future and subject to notifying the IFR, enabling access to some of the world's largest reinsurance markets and providing new business opportunities and further risk diversification for the Beazley Group. Over the medium term this is expected to enable the Beazley Group to develop an additional underwriting platform to complement the Beazley Group's existing Lloyd's and US platforms. Ireland also offers a base from which the Group may look to develop an insurance company with EU passporting rights subject to regulatory approval. |
|
(b) |
Better aligns the Beazley Group's corporate tax rate with its global peer group |
|
|
There are likely to be significant tax benefits for the Beazley Group given the competitive tax environment Ireland enjoys within the EU, and as a result of its strong network of tax treaties around the world. Whilst many of the Beazley Group's principal competitors already enjoy substantial tax benefits from international domiciles, Beazley is currently subject to a UK corporation tax rate of 28 per cent. Following the establishment of the Irish reinsurance operations and subject to receipt by Beazley Re of authorisation to carry on reinsurance business from the IFR, the proposed new structure is anticipated to reduce the Beazley Group's effective tax rate over time, thereby enhancing the return on New Beazley shareholders' equity. In addition to the corporate tax benefits anticipated as a result of the Proposals, and in contrast to other jurisdictions considered by the Beazley Group, the Beazley Directors believe that the effect of the Proposals on Beazley shareholders' tax liabilities is expected to be broadly neutral. |
Implementation of the Scheme
The Scheme is subject to various conditions and requires the approval of Beazley shareholders at a court meeting and at an extraordinary general meeting. If the Scheme is approved by the requisite majority at the court meeting and at the extraordinary general meeting, an application will be made to the court to sanction the Scheme. The times and dates for these events are set out at the end of this announcement.
If these conditions are satisfied and the Scheme is approved and implemented in full, New Beazley will own the entire issued share capital of Beazley. The listing of the existing Beazley shares will be cancelled, New Beazley will then be listed on the London Stock Exchange in place of Beazley and is expected to replace Beazley as a member of the FTSE 250 Index. Existing shareholders will receive one New Beazley share for each share held in Beazley.
The Scheme is expected to become effective, and dealings in New Beazley shares are expected to commence, at 8.00 a.m. on 21 May 2009. The conditions to implementation of the Scheme are set out in the Scheme circular which also sets out a comprehensive timetable of events.
Dividend access plan
New Beazley will, shortly after the Scheme becomes effective, put in place a dividend access plan. This dividend access plan is primarily designed to ensure that, as under current Beazley dividend payments arrangements, New Beazley shareholders may continue to receive UK dividends, meaning in particular that under the dividend access plan no tax is required to be withheld from the payment of dividends to New Beazley shareholders.
The key features of the dividend access plan are as follows:
|
(a) |
under the dividend access plan, holders of New Beazley shares may choose whether they receive their dividends from a company resident for tax purposes in the UK ('Beazley UK Dividend Co') or from a company resident for tax purposes in the Republic of Ireland (i.e. from New Beazley); and |
|
(b) |
New Beazley shareholders who hold 300,000 or fewer New Beazley shares upon the Scheme becoming effective (or if a person subsequently becomes a shareholder of New Beazley with 300,000 or fewer New Beazley shares) and who do not elect to opt out of the dividend access plan will be deemed to have elected to participate in the dividend access plan and will receive their dividends from Beazley UK Dividend Co. |
Other proposals
|
Beazley and New Beazley are also implementing the following proposals in connection with the Scheme: |
|
|
(a) |
New Beazley proposes to implement a reduction of capital in connection with the Scheme in order to allow for ongoing dividend payments and, if appropriate, share repurchases by New Beazley. |
|
(b) |
It is Beazley's intention that the Scheme should, where possible, have no impact on the rights outstanding under its current employee share plans other than that they will be satisfied using New Beazley shares. If the Scheme becomes effective, Beazley's current employee share plans will not be operated again. However, it is proposed that New Beazley will adopt share option plans to enable New Beazley to grant rights to employees of New Beazley and its subsidiaries under the same arrangements that are currently available to Beazley. |
Board of New Beazley
Andrew Beazley, Andrew Horton, Jonathan Gray, Neil Maidment, Nicholas Furlonge and Clive Washbourn, Beazley's current executive directors, will continue in their roles as the executive directors of New Beazley. Jonathan Agnew, Andrew Pomfret, Dudley Fishburn, Daniel Jones and Gordon Hamilton, currently non-executive directors of Beazley, have each been appointed a non-executive director of New Beazley. Padraic O'Connor has also been appointed as a non-executive director of New Beazley. A brief biography of Padraic O'Connor is set out below.
New Director of New Beazley
Padraic O'Connor is currently chairman of the Irish Stock Exchange, chairman of Hewitt Associates in Ireland and a non-executive director of a number of companies including ACC Bank. Between 1999 and 2002, he served as non-executive chairman of ACC Bank, during which time he oversaw the reorientation of the bank's strategy and its sale to the Rabobank Group. Prior to joining ACC Bank, he held a series of senior positions at NCB Group Limited, including group managing director. He retired from NCB in 1999. Mr O'Connor's early career included roles in IBI Treasury, the Irish Central Bank and the Department of Finance. He holds a BA Hons (Economics and Politics), an MA (Econometrics, Statistics and Applied Economics), and a DPA from University College Dublin
Andrew Horton, Beazley Chief Executive Officer, said:
'I am delighted that Padraic O'Connor has agreed to join Beazley as a non-executive director. His broad business and financial experience will be invaluable to us as we continue to build our business and develop the opportunities that our corporate reorganisation makes possible.'
Expected timetable of principal events
The expected timetable of principal events is set out below. This timetable is based on the Beazley Board's expectations and may be subject to change. Any material changes to the timetable will be the subject of a further announcement.
|
Event |
|
Time and / or Date |
|
Latest time for lodging white forms of proxy for the court meeting |
|
10.00 a.m. on 26 April 2009(1) |
|
Latest time for lodging blue forms of proxy for the extraordinary general meeting |
|
10.15 a.m. on 26 April 2009 |
|
Voting record time |
|
6.00 p.m. on 26 April 2009(2) |
|
Court meeting |
|
10.00 a.m. on 28 April 2009 |
|
Extraordinary general meeting |
|
10.15 a.m. on 28 April 2009(3) |
|
|
|
|
|
The following dates are subject to change: |
|
|
|
Scheme court hearing |
|
18 May 2009(4) |
|
Scheme reduction of capital court hearing |
|
20 May 2009 |
|
Last day of dealings in, and for registration of transfers of, Beazley shares |
|
20 May 2009(5) |
|
Scheme record time |
|
6.00 p.m. on 20 May 2009(5) |
|
Effective date of the Scheme |
|
21 May 2009(5) |
|
Cancellation of listings of Beazley shares, New Beazley shares admitted to Official List, crediting of New Beazley shares in uncertificated form to CREST accounts and dealings in New Beazley shares commence on the London Stock Exchange |
|
8.00 a.m. on 21 May 2009(5) |
|
Jersey court hearing to sanction the New Beazley reduction of capital |
|
2 June 2009(5) |
|
New Beazley reduction of capital becomes effective |
|
2 June 2009(5)(6) |
|
Despatch of New Beazley share certificates for New Beazley shares in certificated form |
|
By 5 June 2009(5) |
Notes:
Unless otherwise stated, all references in this document to times are to London times.
-
Forms of proxy for the court meeting not returned by this time may be handed to the registrars, Equiniti Limited, or to the Chairman of Beazley, at the court meeting.
-
If either the court meeting or the extraordinary general meeting is adjourned, the voting record time for the adjourned meeting will be 6.00 p.m. on the date two days before the date set for the adjourned meeting.
-
To commence at 10.15 a.m. or, if later, immediately after the conclusion or adjournment of the court meeting.
-
This date is indicative only and will depend, among other things, on the date upon which the court sanctions the Scheme.
-
These dates are indicative only and will depend, among other things, on the date upon which the Scheme becomes effective.
-
This date is indicative only and will depend, among other things, on the date on which the Jersey court confirms the New Beazley reduction of capital and Jersey registrar of companies registers the act of court and approved minute of the Jersey court.
Copies of the prospectus and the circular referred to above will be available to shareholders free of charge upon request during normal business hours on Monday to Friday each week (public holidays excepted) from Beazley's registered office at Plantation Place South, 60 Greater Tower Street, London EC3R 5AD. The prospectus and the circular will also be available for download to eligible persons from the Investor Relations section of Beazley's website www.beazley.com.
In addition, the prospectus and the circular will shortly be available for inspection at the UK Listing Authority's Document Viewing Facility at the Financial Services Authority, 25 North Colonnade, Canary Wharf, E14 5HS.
|
Enquiries: |
|
|
|
|
|
Beazley Group PLC |
020 7667 0623 |
|
Andrew Horton, Chief Executive Officer |
|
|
Arthur Manners, Company Secretary |
|
|
|
|
|
Numis Securities Limited |
020 7260 1000 |
|
Oliver Hemsley |
|
|
Tom Booth |
|
|
|
|
|
Lexicon Partners Limited |
020 7653 6000 |
|
Angus Winther |
|
|
Nick Chapman |
|
|
|
|
This announcement does not constitute an invitation or offer to sell or the solicitation of an invitation or offer to buy any security. None of the securities referred to in this announcement shall be sold, issued, exchanged or transferred in any jurisdiction in contravention of applicable laws.
Numis Securities Limited is acting as sponsor for New Beazley's listing and as joint financial adviser to Beazley and New Beazley. Numis Securities Limited is acting for Beazley and New Beazley and no one else in connection with the Proposals and will not be responsible to anyone other than Beazley and New Beazley for providing the protections afforded to its clients or for providing advice in relation to the Proposals or the contents of this announcement.
Lexicon Partners Limited is acting as joint financial adviser to Beazley and New Beazley. Lexicon Partners Limited is acting for Beazley and New Beazley and no one else in connection with the Proposals and will not be responsible to anyone other than Beazley and New Beazley for providing the protections afforded to its clients or for providing advice in relation to the Proposals or the contents of this announcement.
Notice to United States residents
This announcement is not an offer of securities in the United States.
The New Beazley shares to be issued in connection with the Proposals will not be, and are not required to be, registered with the US Securities and Exchange Commission under the US Securities Act of 1933, as amended, in reliance on the exception from registration provided by Section 3(a)(10) thereof.
Statements included herein that are not historical facts are forward-looking statements. Such forward-looking statements involve a number of risks and uncertainties and are subject to change at any time. In the event such risks and uncertainties materialise, Beazley's results of operations could be materially affected.
Note to editors:
Beazley Group, plc (BEZ.L), is the London-based parent company of global, specialist insurance businesses with operations in the UK, US, France, Germany, Singapore, Hong Kong and Australia. Beazley manages four Lloyd's syndicates: Syndicate 2623 and Syndicate 623 underwrite a broad range of insurance and reinsurance business worldwide; Syndicate 3623 focuses on accident and health business; and 3622 is a dedicated life syndicate. For 2009 Beazley's syndicates share an aggregate underwriting capacity of £810m. All Lloyd's syndicates are rated A by A.M. Best. In the US, Beazley's underwriters focus on writing specialist insurance products in the admitted market, backed by Beazley Insurance Company, Inc., an admitted carrier in all 50 states; and surplus lines risks, backed by the Beazley syndicates at Lloyd's. Beazley Insurance Company, Inc. is rated A by A.M. Best.
Beazley is a market leader in many of its chosen lines, which include professional indemnity, property, marine, reinsurance, accident and life, and political risks and contingency business.
For more information please go to: www.beazley.com
This information is provided by RNS
Latest directors dealings
- 1 hour ago Oxford Nanopore Technologies
- 2 hours ago AVI Global Trust
- 2 hours ago LSL Property Services
- 2 hours ago Bluebird Merchant Ventures (DI)
- 3 hours ago Power Probe PLC