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22 Jun 2009 07:36
CHAUCER HOLDINGS PLC
22 June 2009
Possible offer by Brit Insurance Holdings PLC
The Board of Chaucer Holdings PLC ("Chaucer" or "the Company") notes the announcement by Brit Insurance Holdings plc ("Brit") regarding the terms of their proposed all share offer for the Company which, if completed, would result in Chaucer shareholders owning approximately 29% of the enlarged business.
The Board of Chaucer is currently discussing the terms of the proposed offer with a number of Chaucer's shareholders and a further announcement will be made as soon as these discussions have been concluded. In the meantime the Board of Chaucer recommends that its shareholders take no action.
Trading update
Chaucer is pleased to announce an increase in Syndicate 1084's total capacity to £626m for 2009. This is a 30% increase on the 2008 capacity of £480m and a 15% increase on the £545m capacity announced at the time of the January 2009 fund raising. Lloyd's has approved the revised business plan. As a result, underwriting interests supported by the Group's own capital will increase to £573m for 2009 (2008 £520m).
Chaucer is also pleased to announce that it has agreed terms in principle for a reinsurance agreement which will facilitate the increase in 2009 capacity by writing £50 million of Syndicate 1084 capacity for the 2009 year of account. The agreement also provides for £50m of underwriting in 2010.
We have increased the underwriting capacity of Syndicate 1084 in response to positive market conditions, particularly in the property, motor and energy markets. To date we have achieved an average rate increase in excess of 6%, which is ahead of our Syndicate 1084 business plan.
The current year continues to develop positively, with premium income ahead of budget for the first five months of 2009. Syndicate 1084 premium income for the 2009 year of account is up 39% in comparison to the same period last year, at constant exchange rates, and underwriting performance for the year to date is ahead of our business plan.
To date, during 2009, we have benefitted from an absence of major catastrophe events and a lower frequency of high value single risk losses in comparison to the same period last year. In order to reduce potential volatility, we have significantly reduced our marine and energy Gulf of Mexico exposures in advance of the 2009 hurricane season.
Encouragingly, our UK motor division will see significant growth in premium income as rate increases combine with improved retention ratios on the private car account.
We achieved an investment return of £32.2m (a 2.4% return on average funds) for the first five months of 2009. As previously announced, we have continued to de-risk our investment portfolio, exiting a number of hedge funds and absolute return bond funds. At 31 May, hedge funds totalled 7.7% of our investment portfolio and are targeted to represent less than 4% at the year-end.
Enquiries
David Haggie
Haggie Financial
T 020 7417 8989
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the Takeover Code (the "Code"), if any person is, or becomes, "interested" (directly or indirectly) in 1% or more of any class of "relevant securities" of Brit or of Chaucer, all "dealings" in any "relevant securities" of that company (including by means of an option in respect of, or a derivative referenced to, any such "relevant securities") must be publicly disclosed by no later than 3.30 pm (London time) on the London business day following the date of the relevant transaction. This requirement will continue until the date on which the offer becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the "offer period" otherwise ends. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an "interest" in "relevant securities" of Brit or of Chaucer, they will be deemed to be a single person for the purpose of Rule 8.3.
Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevant securities" of Brit or of Chaucer by Brit or Chaucer, or by any of their respective "associates", must be disclosed by no later than 12.00 noon (London time) on the London business day following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose "relevant securities" "dealings" should be disclosed, and the number of such securities in issue, can be found on the Takeover Panel's website at www.thetakeoverpanel.org.uk.
"Interests in securities" arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an "interest" by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities. Terms in quotation marks are defined in the Code, which can also be found on the Panel's website. If you are in any doubt as to whether or not you are required to disclose a "dealing" under Rule 8, you should consult the Panel.
Terms in quotation marks are defined in the Code, which can also be found on the Takeover Panel's website (www.thetakeoverpanel.org.uk).
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