Last checked at 25 Apr 2012 18:22
For immediate release
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 such jurisdiction
25 April 2012
RECOMMENDED CASH ACQUISITION
OF
OMEGA INSURANCE HOLDINGS LIMITED
BY
CANOPIUS GROUP LIMITED
(to be implemented by way of an amalgamation under the Bermuda Companies Act)
Summary
·; The Boards of Canopius Group Limited ("Canopius") and Omega Insurance Holdings Limited ("Omega") announce that they have reached agreement on the terms of a recommended cash acquisition of the entire issued and to be issued share capital of Omega by Canopius (the "Acquisition"). It is intended that the Acquisition will be implemented by way of an Amalgamation under the Bermuda Companies Act.
·; Under the terms of the Acquisition, Omega Shareholders will be entitled to receive 67 pence in cash for each Common Share (the "Acquisition Price") which values Omega's existing share capital at approximately £163.6 million and the entire issued and to be issued share capital at approximately £163.9 million.
·; The Omega Directors, who have been so advised by Kinmont and Cenkos, consider the terms of the Acquisition to be fair and reasonable. In providing their advice, Kinmont and Cenkos have taken into account the commercial assessment of the Omega Directors. Accordingly the Omega Directors will unanimously recommend that Omega Shareholders vote to approve the Acquisition at the Special General Meeting (or, in the event that the Acquisition is implemented by way of a Takeover Offer, to accept or procure acceptance of such offer), as the Omega Directors who are also Omega Shareholders have irrevocably undertaken to do in respect of their own beneficial shareholdings of 1,357,997 Common Shares representing approximately 0.56 per cent. of the existing issued share capital of Omega.
·; In addition, Canopius has received irrevocable undertakings to vote in favour of the Acquisition (or, in the event that the Acquisition is implemented by way of a Takeover Offer, to accept or procure acceptance of such offer) from certain institutional Omega Shareholders in respect of 117,496,599 Common Shares, representing approximately 48.11 per cent. of the existing issued share capital of Omega.
·; Canopius has therefore received irrevocable undertakings to vote in favour of the Acquisition (or, in the event that the Acquisition is implemented by way of a Takeover Offer, to accept or procure acceptance of such offer) from Omega Shareholders in respect of a total of 118,854,596 Common Shares, representing approximately 48.67 per cent. of the existing share capital of Omega.
·; The Circular, setting out the details of the Acquisition and the procedures to be followed to approve the Acquisition, will be posted to Omega Shareholders as soon as practicable and in any event within 28 days of this announcement. The Special General Meeting is expected to be held in early June 2012, and, subject to obtaining the required regulatory consents without delay, the Acquisition is expected to become Effective by the end of July 2012.
·; Canopius has a high regard for Omega's franchise and recognises the experience of Omega's employees, and their importance to the future success of the enlarged business. Canopius has given assurances to the Omega Directors that, upon the Acquisition becoming Effective, the existing employment rights and terms and conditions of employment of all management and employees of Omega and its subsidiaries will be safeguarded as required by law and the relevant employment contracts.
·; Omega's existing business platforms at Lloyd's and in Bermuda and the United States will be integrated into the Wider Canopius Group, under the Canopius brand. It is envisaged that Omega's Bermuda platform will re-commence third party underwriting, subject to necessary regulatory consents.
Commenting on the Acquisition, Michael Watson, Executive Chairman of Canopius said: "Omega is a good business with a successful underwriting track record over a long period. The acquisition of Omega represents a significant acceleration of Canopius' ambition to create a global and well diversified insurance group with a substantial presence at Lloyd's. The combination of the two businesses will result in an insurance group with enhanced scale and increased breadth of market offering and presence, including in the United States. We look forward to completing the acquisition of Omega as rapidly as possible."
This summary should be read in conjunction with, and is subject to, the full text of the following announcement and the Appendices.
This Acquisition will be subject to the conditions set out in Appendix 1 to the full announcement and to the further terms and conditions to be set out in the Circular. Appendix 2 to the full announcement contains bases and sources of certain information contained in the announcement. Further details of irrevocable undertakings received by Canopius are set out in Appendix 3 to the full announcement. Certain definitions and terms used in the full announcement are set out in Appendix 4.
Terms used in this summary shall have the meaning given to them in the full announcement.
Enquiries:
Canopius Tel: +44 (0) 20 7337 3700Michael Watson, Executive Chairman
Keefe, Bruyette & Woods Tel: +44 (0) 20 7663 5400(Joint financial adviser to Canopius)Stephen HowardMax Cornu-Thenard
Aon Benfield Securities Tel: +44 (0) 20 7578 7000(Joint financial adviser to Canopius)Andrew BeecroftRoss Milburn
West Hill Corporate Finance Tel: +44 (0) 20 7464 8427(Joint financial adviser to Canopius)Andrew Galloway
Citigate Dewe Rogerson Tel: +44 (0) 20 7638 9571 / Mobile: +44 (0) 7973 611 888(PR adviser to Canopius)Anthony Carlisle
Omega Tel: +44 (0) 20 7767 3000John Coldman, ChairmanRichard Pexton, Chief Executive
Kinmont Tel: +44 (0) 20 7087 9100(Joint financial adviser to Omega)John O'Malley
Cenkos Tel: +44 (0) 20 7382 7800(Joint financial adviser to Omega)Ian Soanes
Haggie Financial Tel: +44 (0) 20 7417 8989(PR adviser to Omega)David HaggieJuliet Tilley
This announcement is not intended to and does not constitute, or form part of, any offer to sell, purchase, exchange or subscribe for, or an invitation to purchase or subscribe for, any securities or the solicitation of an offer to sell, purchase or exchange any securities or of any vote or approval in any jurisdiction pursuant to the Acquisition or otherwise, nor shall there be any sale, issuance or transfer of securities of Omega in any jurisdiction in contravention of applicable law. This announcement does not constitute a prospectus or a prospectus equivalent document. The Acquisition will be made solely pursuant to the terms of the Circular which will contain the full terms and conditions of the Acquisition, including details of how to vote in respect of the Amalgamation. Any decision in respect of, or other response to, the Acquisition should be made only on the basis of the information in the Circular. Omega Shareholders are advised to read the formal documentation in relation to the Acquisition carefully, once it has been dispatched.
Whether or not Omega Shares are voted at the Special General Meeting, if the Amalgamation becomes effective, those Shares will be cancelled pursuant to the Amalgamation in return for the payment to each Omega Shareholder of the Acquisition Price.
Copies of this announcement and any formal documentation relating to the Acquisition are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from any Restricted Jurisdiction. If the Acquisition is implemented by way of a Takeover Offer (unless otherwise determined by Canopius and permitted by applicable law and regulation), such offer may not be made directly or indirectly, in or into, or by the use of mail or any means or instrumentality (including, but not limited to, facsimile, e-mail or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of any Restricted Jurisdiction and the offer may not be capable of acceptable by any such use, means, instrumentality or facilities.
Keefe, Bruyette & Woods, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Canopius and for no-one else in connection with the Acquisition and will not be responsible to any person other than Canopius for providing the protections afforded to clients of Keefe, Bruyette & Woods, nor for providing advice in relation to the Acquisition or any other matters referred to herein.
Aon Benfield Securities, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Canopius and for no-one else in connection with the Acquisition and will not be responsible to any person other than Canopius for providing the protections afforded to clients of Aon Benfield Securities, nor for providing advice in relation to the Acquisition or any other matters referred to herein.
West Hill Corporate Finance, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Canopius and for no-one else in connection with the Acquisition and will not be responsible to any person other than Canopius for providing the protections afforded to clients of West Hill Corporate Finance, nor for providing advice in relation to the Acquisition or any other matters referred to herein.
Kinmont, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Omega and for no-one else in connection with the Acquisition and will not be responsible to any person other than Omega for providing the protections afforded to clients of Kinmont, nor for providing advice in relation to the Acquisition or any other matters referred to herein.
Cenkos, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Omega and for no-one else in connection with the Acquisition and will not be responsible to any person other than Omega for providing the protections afforded to clients of Cenkos, nor for providing advice in relation to the Acquisition or any other matters referred to herein.
Notice to US holders of Common Shares
The Acquisition relates to the shares of a Bermudian company and is being made by means of an amalgamation provided for under Bermudian company law. A transaction effected by means of an amalgamation is not subject to the tender offer rules or the proxy solicitation rules under the US Securities Exchange Act of 1934. Accordingly, the Acquisition is subject to the disclosure requirements and practices applicable in Bermuda to amalgamations, which differ from the disclosure requirements of United States tender offer and proxy solicitation rules. If, in the future, Canopius exercises its right to implement the Acquisition by way of a Takeover Offer and determines to extend the offer into the United States, the Acquisition will be made in compliance with applicable United States laws and regulations. The financial information included in this announcement has been prepared in accordance with International Financial Reporting Standards (as adopted by the European Union) and thus may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States.
Omega and Canopius are incorporated under the laws of Bermuda and Guernsey, respectively. Most of the directors of these companies are residents of countries other than the United States. A majority of the assets of these companies are located outside the United States. As a result, it may not be possible for Omega Shareholders in the United States to effect service of process within the United States upon Omega or Canopius or their respective officers or directors or to enforce against any of them judgements of the United States courts predicated upon the civil liability provisions of the federal securities laws of the United States. It may not be possible to sue Omega or Canopius or their respective officers or directors in a non-US court for violations of the US securities laws. There is also substantial doubt as to enforceability in Bermuda, in original actions or in actions for enforcement, of the judgments of US courts, based on the civil liability provisions of US federal securities laws.
Overseas Shareholders
The release, publication or distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by law and, therefore, any persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about, and observe, any applicable requirements. In particular the ability of Omega Shareholders who are not resident in the United Kingdom to vote their Common Shares with respect to the Amalgamation at the Special General Meeting may be affected by the laws of the relevant jurisdiction in which they are located. This announcement has been prepared for the purposes of complying with Bermudian and English law and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws and regulations of any jurisdiction outside of Bermuda or England.
The Acquisition will not be made directly or indirectly, in or into, or by the use of mails or any means or instrumentality (including, but not limited to, facsimile, e-mail or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of any Restricted Jurisdiction. If the Acquisition is implemented by way of an offer (unless otherwise determined by Canopius and permitted by applicable law and regulation), the offer may not be capable of acceptance by any such use, means, instrumentality or facilities. Copies of this announcement and any formal documentation relating to the Acquisition are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from any Restricted Jurisdiction and persons receiving this announcement and all documents (including custodians, nominees and trustees) relating to the Acquisition should observe these restrictions and should not mail or otherwise forward, distribute or send this announcement or documents relating to the Acquisition in or into or from any Restricted Jurisdiction.
Forward-looking statements
This announcement, oral statements made by or on behalf of Canopius and/or Omega regarding the Acquisition and other information published by or on behalf of Canopius and/or Omega or their respective affiliates may contain certain statements that are or may be forward-looking. These statements are based on the assumptions and assessments made by Omega and Canopius in light of their experience and their perceptions of historical trends, current conditions, future developments and other factors they believe appropriate and are naturally subject to uncertainty and changes in circumstances. The forward-looking statements contained herein may include statements about the expected effects of the Acquisition, the expected timing and scope of the Acquisition, anticipated earnings enhancements, estimated cost savings and other synergies, costs to be incurred in achieving synergies, potential disposals and other strategic options and all other statements in this announcement other than historical facts. Forward-looking statements include, without limitation, statements that typically contain words such as: "will", "may", "should", "could", "continue", "believes", "expects", "intends", "estimates", "anticipates", "aims", "targets", "plans" and "forecasts" or words of similar import. By their nature, the forward-looking statements involve risks, changes in circumstances and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond the ability of the person making the statement to control or estimate precisely, such as future market conditions and the behaviour of other market participants. Other unknown or unpredictable factors could also cause actual results to differ materially from those in the forward looking statements. Therefore investors should not place undue reliance on such statements because, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and management's plans and objectives, to differ materially from those expressed or implied in the forward-looking statements.
There are several factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements. Among such factors are changes in the global, political, economic, business, competitive, market and regulatory forces, future exchange and interest rates, changes in tax rates and future business combinations or dispositions, the outcome of litigation, government actions and natural phenomena such as floods, earthquakes and hurricanes. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements. The inclusion of a forward-looking statement in this announcement should not be regarded as a representation by the Canopius Group or the Omega Group that the Canopius Group's or the Omega Group's objectives will be achieved.
Canopius and Omega and their respective affiliates assume no obligation and do not intend to revise or update these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law, the Listing Rules, the Disclosure Rules and Transparency Rules and the rules of the London Stock Exchange.
Responsibility
The Canopius Directors (all of whose names will be set out in the Circular) accept responsibility for the information contained in this announcement relating to Canopius, the Canopius Group and themselves and their immediate families, related trusts and Connected Persons. To the best of the knowledge and belief of Canopius Directors (who have taken all reasonable care to ensure that such is the case), such information for which they are responsible is in accordance with the facts and does not omit anything likely to affect the import of such information.
The Omega Directors (all of whose names will be set out in the Circular) accept responsibility for the information contained in this announcement relating to the Omega Group and themselves and their immediate families, related trusts and Connected Persons. To the best of the knowledge and belief of the Omega Directors (who have taken all reasonable care to ensure that such is the case), such information for which they are responsible is in accordance with the facts and does not omit anything likely to affect the import of such information.
Dealing disclosure requirements
Although Rule 8 of the Takeover Code does not apply to Omega, Omega Shareholders and persons considering the acquisition or disposal of any interest in Omega Shares are reminded that they are subject to the Disclosure Rules and Transparency Rules made by the UKLA and other applicable regulatory rules regarding transactions in Omega securities.
Publication on website
A copy of this announcement will be available free of charge on Omega's website at http://www.omegauw.com and on Canopius' website at http://www.canopius.com by no later than 12.00 p.m. (London time) on 26 April 2012.
For immediate release
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 such jurisdiction
25 April 2012
RECOMMENDED CASH ACQUISITION
OF
OMEGA INSURANCE HOLDINGS LIMITED
BY
CANOPIUS GROUP LIMITED
(to be implemented by way of an amalgamation under the Bermuda Companies Act)
1. Introduction
The Boards of Canopius Group Limited ("Canopius") and Omega Insurance Holdings Limited ("Omega") announce that they have reached agreement on the terms of a recommended cash acquisition of the entire issued and to be issued share capital of Omega by Canopius (the "Acquisition").
2. The Acquisition
It is intended that the Acquisition be implemented by way of an Amalgamation under the Bermuda Companies Act. The purpose of the Amalgamation is to enable Canopius to acquire the whole of the issued and to be issued common share capital of Omega.
Under the terms of the Acquisition, which will be subject to the Conditions and further terms set out in Appendix 1 to this announcement and to be set out in the Circular, Omega Shareholders will be entitled to receive:
67 pence in cash for each Common Share (the "Acquisition Price")
The Acquisition Price values Omega's existing issued share capital at approximately £163.6 million and its entire issued and to be issued share capital at approximately £163.9 million, and represents a premium of approximately:
·; 30.9 per cent. to the average Closing Price of 51.2 pence per Common Share over the one-month period ended 23 March 2012, being the last Business Day prior to Canopius submitting a proposal to the Board of Omega; and
·; 10.7 per cent. to the Closing Price of 60.5 pence per Common Share on 24 April 2012, being the last Business Day prior to this announcement.
3. Background to and reasons for the Acquisition
Over the last eight years, Canopius has grown through organic initiatives and acquisitions to become a top 10 Lloyd's insurer by 2011 premium income with a diversified portfolio and international presence beyond the London market. Canopius believes that the Acquisition represents a logical step in continuing to implement its strategy of building a global insurance group of enhanced scale capable of accessing international markets and delivering a wide array of insurance solutions to its clients.
Canopius believes that the underwriting portfolios and platforms of the two businesses are complementary. Canopius believes that combining Omega's and Canopius' underwriting activities would create a larger business capable of delivering improved returns, at a time when the outlook for the insurance underwriting cycle remains challenging for organic growth. The increased scale and diversification of the combined businesses would also leave the enlarged group better positioned to handle the forthcoming regulatory changes related to Solvency II.
Canopius' future strategy in respect of Omega will be to preserve and enhance Omega's principal platforms in Bermuda, the United States, and Lloyd's through a focus on underwriting profitability, organic growth and, where appropriate, opportunistic growth via acquisition.
4. Background to and reasons for the recommendation
Since their appointment in 2010, the new Omega Directors have actively considered options for meeting the requirements of Omega Shareholders and delivering stability in a very challenging market. The Omega Board has consulted frequently with Omega Shareholders about the future direction of the business and it has become clear that the majority of Omega Shareholders now wish the business to be sold. The Omega Board has, therefore, engaged with a number of parties since the beginning of 2011 regarding a potential transaction. In light of the wishes of a clear majority of shareholders, the Omega Board intends to recommend the transaction to Omega Shareholders.
5. Recommendation
The Omega Directors, who have been so advised by Kinmont and Cenkos, consider the terms of the Acquisition to be fair and reasonable. In providing their advice, Kinmont and Cenkos have taken into account the commercial assessment of the Omega Directors.
Accordingly, the Omega Directors will unanimously recommend that Omega Shareholders vote to approve the Acquisition at the Special General Meeting (or, in the event that the Acquisition is implemented by way of a Takeover Offer, to accept or procure acceptance of such offer), as the Omega Directors who are also Omega Shareholders have irrevocably undertaken to do, on the terms described below, in respect of their own beneficial shareholdings of 1,357,997 Common Shares representing approximately 0.56 per cent. of the existing issued share capital of Omega.
6. Irrevocable undertakings
Canopius has received the following irrevocable undertakings to vote in favour of the Acquisition (if implemented by way of an Amalgamation) or accept an offer (if the Acquisition is implemented by way of a Takeover Offer) in respect of a total of 118,854,596 issued Common Shares, representing, in aggregate, approximately 48.67 per cent. of the existing issued share capital of Omega:
a) from the Omega Directors who are Omega Shareholders in respect of their own beneficial shareholdings of the Common Shares amounting to, in aggregate, 1,357,997 Common Shares, representing approximately 0.56 per cent. of the existing issued share capital of Omega; and
b) from certain institutional Omega Shareholders in respect of, in aggregate, 117,496,599 Common Shares, representing approximately 48.11 per cent. of the existing issued share capital of Omega.
All the irrevocable undertakings described above cease to be binding if, among other things, a competing offer is made which values the Common Shares at a price per share at least 10 per cent. higher than the Acquisition Price.
Further details of the irrevocable undertakings are set out in Appendix 3 of this announcement.
7. Information relating to Omega
Omega is a Bermuda-domiciled international insurance and reinsurance group listed on the Main Market of the London Stock Exchange, with business operations in Bermuda, London, Chicago and Cologne. The Omega Group underwrites a predominantly short-tail property insurance and reinsurance account, with a focus on insuring small to medium sized insureds and reinsuring smaller insurance companies.
For the year ended 31 December 2011, Omega reported gross premiums written of $304.6 million (2010: $356.1 million), net premiums written of $221.3 million (2010: $268.4 million) and a loss for the year of $89.2 million (2010: loss of $42.8 million). At 31 December 2011 Omega had shareholders' equity of $332.7 million (2010: $421.6 million).
Further information on Omega is available on its website at www.omegauw.com.
8. Information relating to Canopius
Canopius is a privately-owned insurance and reinsurance group which underwrites a diversified portfolio of business from its operations at Lloyd's and around the world. Canopius has achieved significant growth over the last eight years through organic expansion and acquisition. Incorporated in Guernsey, the group operates at Lloyd's through Syndicates 4444 and 260 and has overseas operations in Bermuda, Ireland, Switzerland, Singapore and Australia.
For the year ended 31 December 2011, Canopius reported gross premiums written of £615.6 million (2010: £563.8 million), net premiums written of £452.0 million (2010: £447.6 million) and a loss for the year of £61.1 million (2010: a profit for the year of £42.9 million). At 31 December 2011 Canopius had total shareholders' interests of £243.8 million (2010: £306.2 million).
Canopius is primarily owned by funds managed by Bregal Capital LLP, a UK-based private equity firm with over €1.5 billion of funds under management. As at 31 December 2011, 85 per cent. of the Canopius ordinary shares in issue were held by funds managed by Bregal Capital LLP. The remainder of the shares in Canopius are owned by Canopius employees.
Further information on Canopius is available on its website at www.canopius.com.
9. Financing of the Acquisition
The cash consideration payable by Canopius Group under the terms of the Acquisition will be financed from the proceeds of new equity capital commitments by the Bregal Fund and Tower Group (see paragraph 10 below) and an increase in Canopius' existing credit facility, with the balance of the consideration financed from existing Canopius Group cash resources.
Canopius, the Bregal Fund, Tower Group and other Canopius shareholders have entered into an investment and shareholders' agreement providing for the Bregal Fund and Tower Group to commit to invest respectively £35.0 million and approximately £38.6 million in new Canopius shares, subject to the Acquisition becoming Effective. The Conditions set out in Appendix 1 must be satisfied or waived, as applicable, for the Acquisition to become Effective. The Conditions include the receipt by each of Bregal Fund and Tower Group of certain regulatory approvals from the FSA and Lloyd's. There can be no certainty that Bregal Fund and Tower Group will obtain the requisite approvals. The Conditions that relate to Bregal Fund and Tower Group are neither within the control nor capable of waiver by Canopius.
Canopius has entered into an amended credit facility agreement with its existing lenders increasing the existing facility by £30.0 million.
Keefe, Bruyette & Woods and Aon Benfield Securities, as financial advisers to Canopius, have confirmed that they are satisfied that sufficient resources are available to Canopius to enable it to satisfy, in full, the cash consideration payable at the Acquisition Price under the terms of the Acquisition.
10. Information on Tower Group
Tower Group is an insurance group whose common stock is traded on NASDAQ under the symbol "TWGP". Tower Group offers diversified property and casualty insurance products and services through its operating subsidiaries in the U.S. and Bermuda. Its insurance company subsidiaries offer insurance products to individuals and small to medium-sized businesses through its network of retail and wholesale agents and specialty business through program underwriting agents. Tower Group's insurance services subsidiaries provide underwriting, claims administration, operational and technology services for other insurance companies
For the year ended 31 December 2011, Tower Group reported net earned premiums of $1,593.9 million and a net profit for the year of $72.1 million. At 31 December 2011, Tower Group had total stockholders' equity of $1,077.0 million.
11. Management and employees
Canopius has a high regard for Omega's franchise and recognises the experience of Omega's employees, and their importance to the future success of the enlarged business.
Omega's existing business platforms at Lloyd's and in Bermuda and the United States will be integrated into the Canopius group, under the Canopius brand. It is envisaged that Omega's Bermuda platform will re-commence third party underwriting, subject to necessary regulatory consents. Omega's United States business will continue to operate as a standalone underwriting platform, leveraging the underwriting and risk management capabilities of the enlarged group. Omega Syndicate 958 will continue to operate separately from Canopius Syndicate 4444 in recognition of its third party capital arrangements, under a single managing agency for both syndicates.
Canopius has given assurances to the Omega Directors that, upon the Acquisition becoming Effective, the existing employment rights and terms and conditions of employment of all management and employees of Omega and its subsidiaries will be safeguarded as required by law and the relevant employment contracts.
Furthermore, Canopius intends to discuss non-executive director positions on the Canopius Board or the boards of its principal operating subsidiaries with certain Omega non-executive directors in due course.
12. Current trading
Against the background of a difficult underwriting year in 2011 and a continued repositioning of Omega's business, the Company has seen some encouraging signs in its market with some positive repricing in core classes of business.
13. Omega Share Schemes
Appropriate proposals will be made to participants under the Omega Share Schemes where the relevant options are eligible and likely to be exercised in accordance with the rules of the relevant scheme. All other remaining options will lapse or be cancelled prior to the Amalgamation and separate letters will be sent to the relevant participants in the Omega Share Schemes confirming the approach being taken.
14. Implementation Agreement
Canopius, Omega and Canopius Holdings Limited, a wholly-owned subsidiary of Canopius incorporated in Bermuda ("Canopius SPV"), have entered into an Implementation Agreement in relation to the Amalgamation and other related matters. The Implementation Agreement contains certain assurances and confirmations between the parties, including with respect to the implementation of the Amalgamation and regarding the conduct of the business of the Omega Group in the period prior to the Acquisition Effective Date. The Implementation Agreement, together with the Amalgamation Agreement, also sets out the terms and conditions and means of effecting the Amalgamation as required by the Bermuda Companies Act. Completion of the Amalgamation is subject to satisfaction of the Conditions to the Acquisition set out in Appendix 1.
Pursuant to the Implementation Agreement, Omega, Canopius and Canopius SPV have agreed, inter alia, to take all reasonable steps to achieve fulfilment of the Amalgamation Conditions and the consummation of the Amalgamation in accordance with an agreed indicative timetable.
Takeover Code
As Omega is incorporated and has its registered office in Bermuda, the Takeover Code does not apply to the Acquisition. However, in accordance with the requirements of the Bye-laws and pursuant to the terms of the Implementation Agreement, Omega and Canopius have agreed that, except as may otherwise be agreed between them in writing from time to time and subject to certain agreed derogations, the provisions of the Takeover Code, including but not limited to the general principles set out therein, shall apply to the Acquisition.
Omega and Canopius have acknowledged that the Panel does not have jurisdiction over the Acquisition and have agreed that an independent committee of the Omega Board and the Canopius Board (comprising an equal number of Omega Directors and Canopius Directors respectively) shall determine the application and interpretation of the Takeover Code in relation to the Acquisition. In the event of any dispute arising from any such determination which cannot be resolved between the parties, Omega and Canopius have agreed jointly to refer the dispute to an independent third party who has, in the opinion of Omega and Canopius (each acting reasonably), suitable experience and expertise in respect of the Takeover Code to determine that dispute.
Non solicitation
The Implementation Agreement includes an undertaking from Omega that it will not and it will procure that no other member of the Omega Group or any Omega Director or employee (and use its reasonable endeavours to procure that no adviser or agent of it or them on its behalf) shall, directly or indirectly, solicit, initiate or otherwise seek to procure any approach or indication of interest from or discussions or re-engagement with any person in relation to any Competing Proposal or which may reasonably be expected to lead to a Competing Proposal.
In addition, Omega has agreed to notify Canopius promptly, and in any event, within 24 hours, of any approach that is made or any circumstances indicating that an approach is likely to be made to Omega in relation to a Competing Proposal (including an approach by a person who has previously approached Omega). Omega has also agreed to keep Canopius informed as to the progress of any such Competing Proposal.
15. Description of the Amalgamation
It is intended that the Acquisition be effected by means of an Amalgamation between Omega and Canopius SPV, a wholly-owned subsidiary of Canopius, under the Bermuda Companies Act. The purpose of the Amalgamation is to provide for Canopius through Canopius SPV to become the owner of the whole of the issued and to be issued Common Shares of Omega.
The Amalgamation will be subject to the Conditions and further terms and conditions referred to in Appendix 1 of this announcement and to be set out in the Circular.
In order for the Amalgamation to be adopted, the Amalgamation Agreement requires the approval of Omega Shareholders by the passing of a resolution at the Special General Meeting. The resolution must be approved by a majority of at least 75 per cent. of the Omega Shareholders voting (in person or by proxy) at the Special General Meeting. The quorum for the Special General Meeting is not less than two persons at least holding or representing by proxy more than one-third of the Common Shares in issue. Those Omega shareholders described in paragraph 6 above who have given irrevocable undertakings can be counted towards satisfying this quorum requirement and will be entitled to vote at the Special General Meeting. The approval of Canopius as the shareholder of Canopius SPV is also required.
The Amalgamation will only become effective upon submission to the Registrar of Companies in Bermuda of an application for registration of the Amalgamated Company and the issue by the Registrar of Companies in Bermuda of a certificate of amalgamation.
Under the terms of the Amalgamation Agreement, at the Effective Time, each Common Share (other than any Common Shares held by Canopius, Omega or Canopius SPV or any of their respective subsidiaries) will be converted into the right to receive the cash consideration referred to in paragraph 2 above and each issued share in the capital of Canopius SPV will be converted into one validly issued and fully paid share in the Amalgamated Company.
Any Omega Shareholder who is not satisfied that he has been offered fair value for his Common Shares and who does not vote in favour of the Amalgamation may, within one month of the giving of the notice convening the Special General Meeting, apply to the Court to appraise the value of his Common Shares. If the value per Common Share appraised by the Court is greater than the Acquisition Price for each Common Share, then the Amalgamated Company will pay that Omega Shareholder the difference between the appraised value and the Acquisition Price within one month of the Court's appraisal. Any Omega Shareholder who exercises such appraisal rights will, if the Amalgamation is effected, be bound by the Amalgamation and their Common Shares will be cancelled.
On the date shown in the certificate of amalgamation, the amalgamation of Omega and Canopius SPV and their continuance as one company will become effective, the property, rights and assets of each of Omega and Canopius SPV, in accordance with the Bermuda Companies Act, will become the property, rights and assets of the Amalgamated Company and the Amalgamated Company will become liable for the obligations and liabilities of each of Omega and Canopius SPV. In addition, any existing cause of action, claim or liability to prosecution will be unaffected by the Amalgamation; a civil, criminal or administrative action or proceeding pending by or against Omega or Canopius SPV may be continued to be prosecuted by or against the Amalgamated Company; a conviction against, or ruling, order or judgment in favour of or against, Omega or Canopius SPV may be enforced by or against the Amalgamated Company; and the certificate of amalgamation will be deemed to be the certificate of incorporation of the Amalgamated Company.
The Circular containing a Notice convening the Special General Meeting will be despatched to Omega Shareholders as soon as practicable and in any event within 28 days of the date of this announcement. It is currently anticipated that the Special General Meeting will be held in early June 2012 and the Acquisition is expected to become Effective by the end of July 2012 subject to obtaining the required regulatory consents without delay and the satisfaction of Conditions set out in Appendix 1 to this announcement. Further details on the implementation of the Amalgamation will be set out in the Circular.
Each of Canopius and Omega has agreed not, except with the prior written consent of the other (such consent not to be unreasonably withheld or delayed), to exercise any termination rights under Section 106(6) of the Bermuda Companies Act in connection with the Acquisition.
16. Delisting
Prior to the Amalgamation becoming Effective, a request will be made by Omega to the UKLA to cancel the listing of the Common Shares on the Official List and to the London Stock Exchange to cancel the admission to trading of the Common Shares on the London Stock Exchange's market for listed securities so that Common Shares will cease to be listed on the Official List with effect from the Effective Time. The last day of dealing in Common Shares on the London Stock Exchange will be the last dealing day before the Effective Time. In addition, with effect from the Effective Time, entitlements to Common Shares held within the CREST system will be cancelled.
17. Disclosure of interests in Omega
Save for the irrevocable undertakings referred to in paragraph 6 above, as at the close of business on 24 April 2012 (the latest practicable date prior to the date of this announcement), neither Canopius, nor any of the Canopius Directors or any member of Canopius Group, nor, so far as Canopius Directors are aware, any person acting in concert with Canopius for the purposes of the Acquisition, has any interest in, right to subscribe for, or has borrowed or lent any Common Shares or securities convertible or exchangeable into Common Shares (including pursuant to any long exposure, whether conditional or absolute, to changes in the prices of securities) or right to subscribe for or purchase the same or holds any options (including traded options) in respect of or has any right to acquire any Common Shares or derivatives referenced to Common Shares ("Omega Securities"), nor does any such person have any short position (whether conditional or absolute and whether in the money or otherwise) including any short position under a derivative or arrangement in relation to Omega Securities. For these purposes, "arrangement" includes any indemnity or option arrangement or understanding, formal or informal, of whatever nature, relating to Omega Securities which may be an inducement to deal or refrain from dealing in such securities.
As at close of business on 24 April 2012, being the latest practicable date prior to the date of this announcement, Keefe, Bruyette & Woods had no disclosable interests in Omega Securities or any short position (whether conditional or absolute and whether in the money or otherwise) including any short position under a derivative or arrangement in relation to Omega Securities.
As at close of business on 24 April 2012, being the latest practicable date prior to the date of this announcement, Aon Benfield Securities had no disclosable interests in Omega Securities or any short position (whether conditional or absolute and whether in the money or otherwise) including any short position under a derivative or arrangement in relation to Omega Securities.
As at close of business on 24 April 2012, being the latest practicable date prior to the date of this announcement, West Hill Corporate Finance had no disclosable interests in Omega Securities or any short position (whether conditional or absolute and whether in the money or otherwise) including any short position under a derivative or arrangement in relation to Omega Securities.
18. Conditions
The Acquisition will be subject to the Conditions, including the approval of the Amalgamation Agreement by Omega Shareholders at the Special General Meeting, and approval by relevant regulatory authorities of the change of control contemplated by the Acquisition, and also any regulatory clearances required for Tower Group or Bregal Fund as a result of their new investments in Canopius.
19. General
Canopius and Omega have agreed that, if Canopius so elects in accordance with the Implementation Agreement, the Acquisition may be implemented by way of a Takeover Offer for the entire issued and to be issued share capital of Omega as an alternative to the Amalgamation. In this event, that offer will be implemented on the same terms, so far as applicable (subject to appropriate amendments), as those which would apply to the Amalgamation.
If the Acquisition is effected by way of a Takeover Offer and such offer becomes or is declared unconditional in all respects and sufficient acceptances are received, Canopius intends to (i) request that the London Stock Exchange and the UKLA cancel trading in Common Shares on the London Stock Exchange's main market for listed securities and the listing of Common Shares on the Official List; and (ii) exercise its rights under the Bermuda Companies Act to acquire compulsorily any outstanding Common Shares to which such offer relates.
The Acquisition will be made on the terms and subject to the Conditions set out in Appendix 1 and to be set out in the Circular. Certain definitions and terms used in this announcement are set out in Appendix 4, and the bases and values used in this announcement are set out in Appendix 2.
The Circular will be despatched to Omega Shareholders shortly and will include full details of the Acquisition, together with Notice of the Special General Meeting and the expected timetable for the implementation of the Acquisition. In deciding whether or not to vote to approve the Acquisition, Omega Shareholders should rely on the information contained in, and follow the procedures described in, the Circular and the forms of proxy and direction accompanying the Circular.
Your attention is drawn to the further information contained in the Appendices which form part of, and should be read in conjunction with, this announcement.
Appendix 1 to this announcement contains the terms of and conditions to the Acquisition.
Appendix 2 to this announcement sets out the bases and sources of certain of the information contained in this announcement.
Appendix 3 to this announcement contains certain details relating to the irrevocable undertakings received by Canopius.
Appendix 4 to this announcement contains definitions of certain terms used in this announcement.
This summary should be read in conjunction with, and is subject to, the full text of the following announcement and the Appendices.
Enquiries:
Canopius Tel: +44 (0) 20 7337 3700Michael Watson, Executive Chairman
Keefe, Bruyette & Woods Tel: +44 (0) 20 7663 5400(Joint financial adviser to Canopius)Stephen HowardMax Cornu-Thenard
Aon Benfield Securities Tel: +44 (0) 20 7578 7000(Joint financial adviser to Canopius)Andrew BeecroftRoss Milburn
West Hill Corporate Finance Tel: +44 (0) 20 7464 8427(Joint financial adviser to Canopius)Andrew Galloway
Citigate Dewe Rogerson Tel: +44 (0) 20 7638 9571 / Mobile: +44 (0) 7973 611 888(PR adviser to Canopius)Anthony Carlisle
Omega Tel: +44 (0) 20 7767 3000John Coldman, ChairmanRichard Pexton, Chief Executive
Kinmont Tel: +44 (0) 20 7087 9100(Joint financial adviser to Omega)John O'Malley
Cenkos Tel: +44 (0) 20 7382 7800(Joint financial adviser to Omega)Ian Soanes
Haggie Financial Tel: +44 (0) 20 7417 8989(PR adviser to Omega)David HaggieJuliet Tilley
This announcement is not intended to and does not constitute, or form part of, any offer to sell, purchase, exchange or subscribe for, or an invitation to purchase or subscribe for, any securities or the solicitation of an offer to sell, purchase or exchange any securities or of any vote or approval in any jurisdiction pursuant to the Acquisition or otherwise, nor shall there be any sale, issuance or transfer of securities of Omega in any jurisdiction in contravention of applicable law. This announcement does not constitute a prospectus or a prospectus equivalent document. The Acquisition will be made solely pursuant to the terms of the Circular which will contain the full terms and conditions of the Acquisition, including details of how to vote in respect of the Amalgamation. Any decision in respect of, or other response to, the Acquisition should be made only on the basis of the information in the Circular. Omega Shareholders are advised to read the formal documentation in relation to the Acquisition carefully, once it has been dispatched.
Whether or not Omega Shares are voted at the Special General Meeting, if the Amalgamation becomes effective, those shares will be cancelled pursuant to the Amalgamation in return for the payment to each Omega Shareholder of the Acquisition Price.
Copies of this announcement and any formal documentation relating to the Acquisition are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from any Restricted Jurisdiction. If the Acquisition is implemented by way of a Takeover Offer (unless otherwise determined by Canopius and permitted by applicable law and regulation), such offer may not be made directly or indirectly, in or into, or by the use of mails or any means or instrumentality (including, but not limited to, facsimile, e-mail or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of any Restricted Jurisdiction and the offer may not be capable of acceptable by any such use, means, instrumentality or facilities.
Keefe, Bruyette & Woods, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Canopius and for no-one else in connection with the Acquisition and will not be responsible to any person other than Canopius for providing the protections afforded to clients of Keefe, Bruyette & Woods, nor for providing advice in relation to the Acquisition or any other matters referred to herein.
Aon Benfield Securities, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Canopius and for no-one else in connection with the Acquisition and will not be responsible to any person other than Canopius for providing the protections afforded to clients of Aon Benfield Securities, nor for providing advice in relation to the Acquisition or any other matters referred to herein.
West Hill Corporate Finance, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Canopius and for no-one else in connection with the Acquisition and will not be responsible to any person other than Canopius for providing the protections afforded to clients of West Hill Corporate Finance, nor for providing advice in relation to the Acquisition or any other matters referred to herein.
Kinmont, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Omega and for no-one else in connection with the Acquisition and will not be responsible to any person other than Omega for providing the protections afforded to clients of Kinmont, nor for providing advice in relation to the Acquisition or any other matters referred to herein.
Cenkos, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Omega and for no-one else in connection with the Acquisition and will not be responsible to any person other than Omega for providing the protections afforded to clients of Cenkos, nor for providing advice in relation to the Acquisition or any other matters referred to herein.
Notice to US holders of Common Shares
The Acquisition relates to the shares of a Bermudian company and is being made by means of an amalgamation provided for under Bermudian company law. A transaction effected by means of an amalgamation is not subject to the tender offer rules or the proxy solicitation rules under the US Securities Exchange Act of 1934. Accordingly, the Acquisition is subject to the disclosure requirements and practices applicable in Bermuda to amalgamations, which differ from the disclosure requirements of United States tender offer and proxy solicitation rules. If, in the future, Canopius exercises its right to implement the Acquisition by way of a Takeover Offer and determines to extend the offer into the United States, the Acquisition will be made in compliance with applicable United States laws and regulations. The financial information included in this announcement has been prepared in accordance with International Financial Reporting Standards (as adopted by the European Union) and thus may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States.
Omega and Canopius are incorporated under the laws of Bermuda and Guernsey, respectively. Most of the directors of these companies are residents of countries other than the United States. A majority of the assets of these companies are located outside the United States. As a result, it may not be possible for Omega Shareholders in the United States to effect service of process within the United States upon Omega or Canopius or their respective officers or directors or to enforce against any of them judgements of the United States courts predicated upon the civil liability provisions of the federal securities laws of the United States. It may not be possible to sue Omega or Canopius or their respective officers or directors in a non-US court for violations of the US securities laws. There is also substantial doubt as to enforceability in Bermuda, in original actions or in actions for enforcement, of the judgments of US courts, based on the civil liability provisions of US federal securities laws.
Overseas Shareholders
The release, publication or distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by law and, therefore, any persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about, and observe, any applicable requirements. In particular the ability of Omega Shareholders who are not resident in the United Kingdom to vote their Common Shares with respect to the Amalgamation at the Special General Meeting may be affected by the laws of the relevant jurisdiction in which they are located. This announcement has been prepared for the purposes of complying with Bermudian and English law and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws and regulations of any jurisdiction outside of Bermuda or England.
The Acquisition will not be made directly or indirectly, in or into, or by the use of mails or any means or instrumentality (including, but not limited to, facsimile, e-mail or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of any Restricted Jurisdiction. If the Acquisition is implemented by way of an offer (unless otherwise determined by Canopius and permitted by applicable law and regulation), the offer may not be capable of acceptance by any such use, means, instrumentality or facilities. Copies of this announcement and any formal documentation relating to the Acquisition are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from any Restricted Jurisdiction and persons receiving this announcement and all documents (including custodians, nominees and trustees) relating to the Acquisition should observe these restrictions and should not mail or otherwise forward, distribute or send this announcement or documents relating to the Acquisition in or into or from any Restricted Jurisdiction.
Forward-looking statements
This announcement, oral statements made by or on behalf of Canopius and/or Omega regarding the Acquisition and other information published by or on behalf of Canopius and/or Omega or their respective affiliates may contain certain statements that are or may be forward-looking. These statements are based on the assumptions and assessments made by Omega and Canopius in light of their experience and their perceptions of historical trends, current conditions, future developments and other factors they believe appropriate and are naturally subject to uncertainty and changes in circumstances. The forward-looking statements contained herein may include statements about the expected effects of the Acquisition, the expected timing and scope of the Acquisition, anticipated earnings enhancements, estimated cost savings and other synergies, costs to be incurred in achieving synergies, potential disposals and other strategic options and all other statements in this announcement other than historical facts. Forward-looking statements include, without limitation, statements that typically contain words such as: "will", "may", "should", "could", "continue", "believes", "expects", "intends", "estimates", "anticipates", "aims", "targets", "plans" and "forecasts" or words of similar import. By their nature, the forward-looking statements involve risks, changes in circumstances and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond the ability of the person making the statement to control or estimate precisely, such as future market conditions and the behaviour of other market participants. Other unknown or unpredictable factors could also cause actual results to differ materially from those in the forward looking statements. Therefore investors should not place undue reliance on such statements because, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and management's plans and objectives, to differ materially from those expressed or implied in the forward-looking statements.
There are several factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements. Among such factors are changes in the global, political, economic, business, competitive, market and regulatory forces, future exchange and interest rates, changes in tax rates and future business combinations or dispositions, the outcome of litigation, government actions and natural phenomena such as floods, earthquakes and hurricanes. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements. The inclusion of a forward-looking statement in this announcement should not be regarded as a representation by the Canopius Group or the Omega Group that the Canopius Group's or the Omega Group's objectives will be achieved.
Canopius and Omega and their respective affiliates assume no obligation and do not intend to revise or update these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law, the Listing Rules, the Disclosure Rules and Transparency Rules and the rules of the London Stock Exchange.
Responsibility
The Canopius Directors (all of whose names will be set out in the Circular) accept responsibility for the information contained in this announcement relating to Canopius, the Canopius Group and themselves and their immediate families, related trusts and Connected Persons. To the best of the knowledge and belief of Canopius Directors (who have taken all reasonable care to ensure that such is the case), such information for which they are responsible is in accordance with the facts and does not omit anything likely to affect the import of such information.
The Omega Directors (all of whose names will be set out in the Circular) accept responsibility for the information contained in this announcement relating to the Omega Group and themselves and their immediate families, related trusts and Connected Persons. To the best of the knowledge and belief of the Omega Directors (who have taken all reasonable care to ensure that such is the case), such information for which they are responsible is in accordance with the facts and does not omit anything likely to affect the import of such information.
Dealing disclosure requirements
Although Rule 8 of the Takeover Code does not apply to Omega, Omega Shareholders and persons considering the acquisition or disposal of any interest in Omega Shares are reminded that they are subject to the Disclosure Rules and Transparency Rules made by the UKLA and other applicable regulatory rules regarding transactions in Omega securities.
Publication on website
A copy of this announcement will be available free of charge on Omega's website at http://www.omegauw.com and on Canopius' website at http://www.canopius.com by no later than 12.00 p.m. (London time) on 26 April 2012.
APPENDIX 1
CONDITIONS AND CERTAIN FURTHER TERMS OF THE ACQUISITION
1. Conditions of the Acquisition
1.1 The Acquisition will be conditional upon the Amalgamation becoming effective by no later than the Long Stop Effective Date.
1.2 The Amalgamation will be subject to the following conditions:
(a) approval of the Amalgamation Agreement by a majority vote of at least three-fourths of the Omega Shareholders present and voting, either in person or by proxy, at the Special General Meeting (or at any adjournment of such meeting) at which a quorum is present of not less than two persons at least holding or representing by proxy more than one-third of the Omega Common Shares in issue at that time;
(b) the Amalgamation Resolutions set out in the notice of the Special General Meeting being duly passed by the requisite majority at the Special General Meeting (or at any adjournment of such meeting);
(c) the issue by the Registrar of Companies in Bermuda of a certificate of amalgamation pursuant to the Bermuda Companies Act confirming the Amalgamation; and
(d) the Implementation Agreement otherwise having become unconditional and not having been terminated in accordance with its terms.
1.3 In addition, Canopius and Omega have agreed that the Acquisition will be conditional upon the following Conditions and, accordingly, the necessary actions to make the Acquisition effective will not be taken unless the following Conditions (as amended if appropriate) have been satisfied or, where relevant, waived in accordance with paragraph 1.4:
(a) the FSA having given notice in writing under section 189(4) of FSMA, (in terms which do not impose any material conditions, obligations or restrictions on Canopius which are additional to Omega's existing controller consent and are material in the context of the Wider Omega Group taken as a whole or in the context of the Acquisition),of its approval (or being treated as having given its approval by virtue of section 189(6) of FSMA) in respect of any acquisition of or increase in control (as defined in sections 181 and 182 of FSMA) over any member of the Wider Omega Group which is a UK authorised person (as defined in section 191G(1) of FSMA), which in either case would take place as a result of the Acquisition or its implementation;
(b) Lloyd's having given its consent in writing under section 12 of the Lloyd's Membership Byelaw or section 43 of the Lloyd's Underwriting Byelaw (as the case may be), (in terms which do not impose any material conditions, obligations or restrictions on Canopius which are additional to Omega's existing controller consent and are material in the context of the Wider Omega Group taken as a whole or in the context of the Acquisition), in respect of any change in the controller of any member of the Wider Omega Group which is a corporate member or a managing agent of Lloyd's which would take place as a result of the Acquisition or its implementation;
(c) the Bermuda Monetary Authority confirming in writing that it has no objection to any change in the shareholder controller of any member of the Omega Group which is a registered person under the Insurance Act 1978 of Bermuda which would result from the Acquisition;
(d) the Delaware Insurance Commissioner having approved, pursuant to the 18 Del. Code § 5003, any acquisition of control arising from the Acquisition or the waiting periods applicable thereto having terminated or expired, provided that if such approval is subject to conditions, such conditions do not impose any material limitations or conditions which are additional to either of Canopius' or the Bregal Funds' (being all of those funds managed by Bregal Capital LLP) existing limitations or conditions and which are material in the context of either of the Wider Canopius Group or the Bregal Funds;
(e)
(i) either (a) the FSA having given notice in writing to Canopius pursuant to section 189(4) of FSMA, and in accordance with section 185(1) FSMA, that it has determined to approve Bregal Fund and Tower Group becoming controllers (within the meaning of section 422 of FSMA) or acquiring control (within the meaning of section 181 of FSMA) of Canopius Managing Agents Limited and KGM Underwriting Agencies Limited and K Drewe Insurance Brokers Ltd provided that if the FSA's approval is subject to conditions, such conditions do not impose any material conditions, obligations or restrictions which are additional to Canopius' existing controller consents and which are material in the context of the Wider Canopius Group or (b) in the absence of such notice, the FSA being treated as having given and notified Canopius and Canopius Managing Agents Limited and KGM Underwriting Agencies Limited and K Drewe Insurance Brokers Ltd of such approval by reason of section 189(6) of FSMA; and
(ii) the Council of Lloyd's and the Lloyd's Franchise Board having notified Canopius in writing (in accordance with paragraph 12 of the Membership Byelaw (No. 5 of 2005) and paragraph 43 of the Underwriting Byelaw (No. 2 of 2003), respectively) that it consents to Bregal Fund and Tower Group becoming controllers (as defined in the Lloyd's Definitions Byelaw (No. 7 of 2005)) of Canopius Managing Agents Limited and KGM Underwriting Agencies Limited and the Canopius Corporate Members provided that if such consents are subject to conditions, such conditions do not impose any material conditions, obligations or restrictions which are additional to Canopius' existing controller consents and which are material in the context of the Wider Canopius Group;
(f) the Bermuda Monetary Authority confirming in writing that it has no objections to any change in shareholder control of Canopius Bermuda Limited, a registered person under the Bermuda Insurance Act 1978, which would result from the implementation of the Acquisition;
(g) it being established, in terms reasonably satisfactory to Canopius, that neither the proposed Acquisition nor any matter arising from or relating to the proposed Acquisition will be referred to the UK Competition Commission for investigation and the relevant four week period within which an application for review of any decision not to refer the proposed Acquisition to the UK Competition Commission may be made to the Competition Appeal Tribunal (the "CAT") having expired without such an application having been made or, where any such application or applications has or have been made, that application or all those applications having been dismissed by the CAT and it being established in terms reasonably satisfactory to Canopius that no further appeal has been or will be made against any relevant ruling of the CAT;
(h) any appropriate notifications and filings having been made and all or any applicable waiting periods (including any extensions thereof) under the Hart Scott Rodino Antitrust Improvements Act 1976, as amended, and the regulations thereunder having expired, lapsed or been terminated as appropriate in respect of the Acquisition or the proposed acquisition by Canopius of the Common Shares;
(i) no injunction, final judgment or ruling, or statute or regulation enacted, promulgated, issued, amended or enforced by any Third Party being in effect and no legal or regulatory proceeding with respect thereto having been commenced by any Third Party which enjoins or otherwise prohibits consummation of the investments by Tower Group or Bregal Fund in Canopius;
(j) no Third Party having decided to take, institute, implement or threaten any action proceeding, suit, investigation, enquiry or reference, or having required any action to be taken or otherwise having done anything or having enacted, made or proposed any statute, regulation, decision, order or change to published practice (and in the case of a proposed statute, regulation, decision or order, such proposal continuing to be outstanding) which would or might reasonably be expected to:
(i) make the Acquisition, its implementation or the acquisition or proposed acquisition, by any member of the Wider Canopius Group of any shares or other securities in, or control or management of any member of the Wider Omega Group void, illegal and/or unenforceable under the laws of any relevant jurisdiction, or otherwise directly or indirectly prevent, prohibit, or restrain, restrict, delay or otherwise interfere with the implementation of, or impose additional conditions or obligations with respect to, or otherwise impede, challenge, interfere or require amendment of the Acquisition by any member of the Wider Canopius Group or the acquisition of any shares or other securities in, or control or management of any member of the Wider Omega Group to an extent which in any case is material in the context of the Wider Omega Group taken as a whole or in the context of the Acquisition;
(ii) require a disposal by any member of the Wider Omega Group of any of the shares or other securities in any member of the Wider Omega Group which is material in the context of the Wider Omega Group taken as a whole or in the context of the Acquisition;
(iii) require, prevent or delay the disposal or divestiture or alter the terms envisaged for such disposal or divestiture by any member of the Wider Canopius Group or by any member of the Wider Omega Group of all or any part of their respective businesses, assets or property or impose any limitation on the ability of all or any of them to conduct their respective businesses (or any part thereof) or to own, use, operate, control or manage any of their respective assets or properties (or any part thereof), to an extent which is material in the context of the Wider Omega Group or the Wider Canopius Group, (as the case may be), in each case, taken as a whole or in the context of the Acquisition;
(iv) impose any limitation on, or result in a delay in, the ability of any member of the Wider Canopius Group directly or indirectly to acquire or hold or to exercise effectively all or any rights of ownership in respect of shares or other securities in Omega (or any member of the Wider Canopius Group) or on the ability of any member of the Wider Canopius Group directly or indirectly to hold or exercise effectively any rights of ownership in respect of shares or other securities in, or to exercise management control or voting over, any member of the Wider Omega Group, in each case to an extent which is material in the context of Omega Group taken as a whole or in the context of the Acquisition;
(v) other than pursuant to the implementation of the Acquisition, require any member of the Wider Canopius Group or the Wider Omega Group to acquire or offer to acquire any shares, other securities (or the equivalent) or interest in any member of the Wider Omega Group or any asset owned by any third party, which in any case is material in the context of the Wider Omega Group or the Wider Canopius Group, in each case, taken as a whole;
(vi) require, prevent or delay a disposal or divestiture by any member of the Wider Canopius Group of any shares or other securities (or the equivalent) in any member of the Wider Omega Group to an extent which is material in the context of the Wider Omega Group or the Wider Canopius Group, in each case, taken as a whole or in the context of the Acquisition;
(vii) result in any member of the Wider Omega Group ceasing to be able to carry on business under any name under which it presently carries on business, to an extent which is material in context of the Omega Group taken as a whole or in the context of the Acquisition;
(viii) impose any limitation on the ability of any member of the Wider Canopius Group or any member of the Wider Omega Group to conduct, integrate or co-ordinate all or any part of their respective businesses with all or any part of the business of any other member of the Wider Canopius Group and/or the Wider Omega Group in a manner which is adverse to and material in the context of the Wider Canopius Group and/or the Wider Omega Group, in each case, taken as a whole, or in the context of the Acquisition;
(ix) otherwise adversely affect the business, assets, value, profits, prospects or operational performance or financial or trading position of any member of the Wider Canopius Group or any member of the Wider Omega Group in a manner which is adverse to and material in the context of the Wider Canopius Group and/or the Wider Omega Group, in each case taken as a whole, or in the context of the Acquisition; and
all applicable waiting and other time periods (including any extensions thereof) during which any such Third Party could decide to take, institute, implement or threaten any such action, proceedings, suit, investigation, enquiry or reference or take any other step under the laws or any jurisdiction in respect of the Acquisition or the acquisition or proposed acquisition of any Common Shares or otherwise intervene having expired, lapsed, or been terminated;
(k) all notifications, filings or applications which are necessary in connection with the Acquisition having been made and all necessary waiting and other time periods (including any extensions thereof) under any applicable legislation or regulation of any jurisdiction having expired, lapsed or been terminated (as appropriate) and all statutory and regulatory obligations in any jurisdiction having been complied with and all Authorisations necessary in any jurisdiction for or in respect of the Acquisition or the acquisition or proposed acquisition of any shares or other securities in, or control of, any member of the Omega Group by any member of the Wider Canopius Group having been obtained in terms and in a form reasonably satisfactory to Canopius from all applicable Third Parties and all such Authorisations necessary to carry on the business of any member of the Omega Group in any jurisdiction having been obtained, in each case where the direct consequence of a failure to make such a notification, filing or application or to wait for the expiry, lapse or termination of any such waiting or other time period or to comply with such obligation or obtain such authorisation would be unlawful in any relevant jurisdiction or have a materially adverse effect on the Omega Group, any member of the Wider Canopius Group or the ability of Canopius to implement the Acquisition and all such Authorisations remaining in full force and effect at the time at which the Acquisition becomes effective and there being no notice or intimation of an intention to revoke, withdraw, suspend, restrict, modify, amend or not to renew such Authorisations;
(l) save as fairly disclosed in Omega's annual report and accounts for the year ended 31 December 2011 or as otherwise publicly announced by Omega in accordance with the Listing Rules or the Disclosure Rules and Transparency Rules prior to the close of business on 24 April 2012 or as otherwise fairly disclosed in writing by Omega to Canopius prior to the close of business on 24 April 2012, there being no provision of any authorisation agreement, arrangement, licence, permit, lease, franchise or other instrument to which any member of the Wider Omega Group is a party or by or to which any such member or any of its assets may be bound, entitled or subject, which in consequence of the Acquisition or the proposed acquisition of any shares or other securities in Omega or because of a change in the control or management of Omega in any case as a result of the Acquisition might reasonably be expected to result in, to an extent which is material in the context of the Wider Omega Group as a whole:
(i) any monies borrowed by or any other indebtedness (actual or contingent) of, or grant available to any such member, being or becoming repayable or capable of being declared repayable immediately or earlier than their or its stated maturity date or repayment date or the ability of any such member to borrow moneys or incur any indebtedness being withdrawn or inhibited or being capable of becoming or being withdrawn or inhibited;
(ii) any such agreement, arrangement, licence, permit or instrument or the rights, liabilities, obligations or interests of any member of the Wider Omega Group thereunder being terminated or modified or affected or any onerous obligation or liability arising or any action being taken or arising thereunder;
(iii) any assets, property or interests of any member of the Wider Omega Group being or falling to be disposed of or charged or any right arising under which any such asset or interest could be required to be disposed of or charged otherwise than, in any such case, in the ordinary course of business;
(iv) the creation or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property or assets of any member of the Wider Omega Group;
(v) the rights, liabilities, obligations or interests of any member of the Wider Omega Group in, or the business of any such member with, any person, firm or body (or any arrangement or arrangements relating to any such interest or business) being terminated, adversely modified or affected;
(vi) the value of any member of the Wider Omega Group or its financial or trading position or prospects being prejudiced or adversely affected;
(vii) any member of the Wider Omega Group ceasing to be able to carry on business under any name under which it presently does so; or
(viii) the creation or assumption of any liability, actual or contingent, by any member of the Wider Omega Group other than in the ordinary course of business;
and no event having occurred which, under any provision of any agreement, arrangement, licence, permit or other instrument to which any member of the Wider Omega Group is a party or by or to which any such member or any of its assets may be bound, entitled or subject, would be reasonably likely to result in any of the events or circumstances as are referred to in subparagraphs (i) to (viii) of this Condition;
(m) all Authorisations from any person with whom any member of the Wider Omega Group has entered into contractual arrangements that are required in connection with, or as a consequence of, the Acquisition or its implementation, the absence of which would have a material adverse effect on the business of the Wider Omega Group taken as a whole (except for any change of control provisions contained in any insurance or reinsurance contracts entered into by any member of the Wider Omega Group in the ordinary course of business prior to close of business on 24 April 2012 and which are not individually or in the aggregate material in the context of the Wider Omega Group taken as a whole or have been disclosed to Canopius prior to 24 April 2012) having been granted or obtained;
(n) save as fairly disclosed in Omega's annual report and accounts for the year ended 31 December 2011 or as otherwise publicly announced by Omega in accordance with the Listing Rules or the Disclosure Rules and Transparency Rules prior to the close of business on 24 April 2012 or as fairly disclosed in writing by Omega to Canopius prior to the close of business on 24 April 2012, no member of the Wider Omega Group having, since 31 December 2011:
(i) save as between Omega and wholly-owned subsidiaries of Omega or for Common Shares issued pursuant to the exercise of options granted prior to 31 December 2011 under the Omega Share Schemes, issued, agreed to issue, authorised or proposed the issue or authorisation of additional shares of any class;
(ii) save as between Omega and wholly-owned subsidiaries of Omega, issued or agreed to issue, authorised or proposed the issue of securities convertible into or exchangeable for shares of any class or rights, warrants or options to subscribe for, or acquire, any such shares or convertible securities;
(iii) other than to another member of the Omega Group, recommended, declared, paid or made or proposed to recommend, declare, pay or make any bonus, dividend or other distribution whether payable in cash or otherwise;
(iv) save for intra-Omega Group transactions, merged or demerged with any body corporate or acquired or disposed of or transferred, mortgaged or charged or created any security interest over any assets or any right, title or interest in any asset (including shares and trade investments) or authorised or proposed or announced any intention to propose any merger, demerger, acquisition or disposal, transfer, mortgage, charge or security interest, in each case, other than in the ordinary course of business;
(v) save for intra-Omega Group transactions, made or authorised or proposed or announced an intention to propose any change in its loan capital;
(vi) issued, authorised or proposed the issue of any debentures or made any change in or to any debentures (save for intra-Omega Group transactions) or save in the ordinary course of business, incurred or increased any indebtedness or become subject to any (actual or contingent) liability that is material in the context of the Wider Omega Group taken as a whole;
(vii) save for intra-Omega Group transactions, purchased, redeemed or repaid or announced any proposal to purchase, redeem or repay any of its own shares or other securities or reduced or, save in respect to the matters mentioned in sub-paragraph (n)(i) above, made any other change to any part of its share capital;
(viii) entered into, effected, implemented, or authorised, proposed or announced its intention to implement, any reconstruction, amalgamation, scheme, commitment (whether in respect of capital expenditure or otherwise) or other transaction or arrangement otherwise than in the ordinary course of business or entered into or offered to enter into or changed the terms of service of or any contract with any director or senior executive, (being an employee of any member of the Wider Omega Group with an annual basic salary of £125,000 or more);
(ix) entered into or varied or authorised, proposed or announced its intention to enter into or vary any contract, transaction or commitment (whether in respect of capital expenditure or otherwise) which is of a long term, onerous or unusual nature or magnitude or which is or could be materially restrictive on the businesses of any member of the Wider Omega Group or the Wider Canopius Group or which involves or could involve an obligation of such a nature or magnitude or which is other than in the ordinary course of business and which, in any of the foregoing cases, is material in the context of the Wider Omega Group taken as a whole;
(x) (other than in respect of a member which is dormant and was solvent at the relevant time) taken any corporate action or had any legal proceedings started or threatened against it for its winding-up, dissolution or reorganisation or for the appointment of a receiver, administrative receiver, administrator, trustee or similar officer of all or any of its assets or revenues or any analogous proceedings in any jurisdiction or had any such person appointed;
(xi) been unable, or admitted in writing that is it unable, to pay its debts or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or substantial part of its business, which in any case is material in the context of the Wider Omega Group taken as a whole;
(xii) entered into any contract, transaction or arrangement which would be restrictive on the business of any member of the Wider Omega Group or the Wider Canopius Group other than to a nature and extent which is normal in the context of the business concerned and which is not material in the context of the Wider Omega Group or the Wider Canopius Group taken as a whole;
(xiii) other than in respect of intra Omega Group capital contributions or capitalisations, waived or compromised any claim otherwise than in the ordinary course of business and which is material in the context of the Wider Omega Group taken as a whole;
(xiv) entered into any contract, commitment, arrangement or agreement otherwise than in the ordinary course of business or passed any resolution or made any offer (which remains open for acceptance) with respect to or announced any intention to, or to propose to, effect any of the transactions, matters or events referred to in paragraphs (i) to (xiii) of this Condition;
(xv) made or agreed or consented to any change to:
(A) the terms of the trust deeds constituting the pension scheme(s) established by any member of the Wider Omega Group for its directors, employees or their dependents;
(B) the contributions payable to any such scheme(s) or to the benefits which accrue or to the pensions which are payable thereunder;
(C) the basis on which qualification for, or accrual or entitlement to, such benefits or pensions are calculated or determined; or
(D) the basis upon which the liabilities (including pensions) of such pension schemes are funded, valued or made; or
(xvi) except as provided for in the Implementation Agreement proposed, agreed to provide or modified the terms of any share option scheme, incentive scheme or other benefit relating to the employment or termination of employment of any person employed by the Wider Omega Group;
(o) except as fairly disclosed in Omega's annual report and accounts for the year ended 31 December 2011 or as otherwise publicly announced by Omega in accordance with the Listing Rules or the Disclosure Rules and Transparency Rules prior to the close of business on 24 April 2012 or as fairly disclosed in writing by Omega to Canopius prior to 24 April 2012, no member of the Wider Omega Group having taken since 1 January 2012 (or agreed or proposed to take) any action which requires, or would require, the consent of the Panel (if the Code had applied to Omega) or the approval of Omega Shareholders in general meeting in accordance with, or as contemplated by, Rule 21.1 of the Code;
(p) except as fairly disclosed in Omega's annual report and accounts for the year ended 31 December 2011, or publicly announced by Omega in accordance with the Listing Rules or the Disclosure Rules and Transparency Rules prior to the close of business on 24 April 2012 or as fairly disclosed in writing by Omega to Canopius prior to 24 April 2012, during the period commencing on 31 December 2011 and ending at close of business on 24 April 2012:
(i) no adverse change or deterioration having occurred in the business, assets, financial or trading position or profits or prospects of any member of the Wider Omega Group which is, in any such case, material in the context of the Wider Omega Group taken as a whole;
(ii) no litigation, arbitration proceedings, prosecution or other legal proceedings to which any member of the Wider Omega Group is or is likely to become a party (whether as a plaintiff, defendant or otherwise) and no investigation by any Third Party against or in respect of any member of the Wider Omega Group having been instituted, announced or threatened by or against or remaining outstanding in respect of any member of the Wider Omega Group which in any such case might reasonably be expected to have a material adverse effect on the Wider Omega Group taken as a whole;
(iii) no contingent or other liability having arisen which would be reasonably likely to adversely affect any member of the Wider Omega Group to an extent which is material in the context of the Wider Omega Group taken as a whole; and
(iv) no steps having been taken which are likely to result in the withdrawal, cancellation, termination or modification of any licence held by any member of the Wider Omega Group which is necessary for the proper carrying on of its business;
(q) save as fairly disclosed in Omega's annual report and accounts for the year ended 31 December 2011 or as otherwise publicly announced by Omega in accordance with the Listing Rules or the Disclosure Rules and Transparency Rules prior to the close of business on 24 April 2012 or as otherwise fairly disclosed in writing by Omega to Canopius prior to 24 April 2012, Canopius not having discovered:
(i) that any financial, business or other information concerning the Wider Omega Group as contained in the information publicly disclosed at any time in the preceding 60 months by or on behalf of any member of the Wider Omega Group is misleading, contains a misrepresentation of fact or omits to state a fact necessary to make that information not misleading, which in any case is material in the context of the Wider Omega Group taken as a whole;
(ii) that any member of the Wider Omega Group, or any partnership, company or other entity in which any member of the Wider Omega Group has a significant economic interest and which is not a Subsidiary Undertaking of Omega (but which partnership, company or other entity is in any event material in the context of the Wider Omega Group taken as a whole) is subject to any liability (contingent or otherwise) which is not disclosed in the annual report and accounts of Omega, for the year ended 31 December 2011 and which in any case is material in the context of the Wider Omega Group taken as a whole.
1.4 Canopius reserves the right (but shall be under no obligation) to waive, in whole or in part, all or any of the Conditions (except the Conditions set out in paragraphs 1.2 and 1.3(a) to (f) above). Canopius shall be under no obligation to waive or treat as fulfilled any of the Conditions by a date earlier than the date specified in the Condition set out in paragraph 1.1 for the fulfilment thereof, notwithstanding that other Conditions may at such earlier date have been waived or fulfilled and that there are at such earlier date no circumstances indicating that any of such Conditions may not be capable of fulfilment.
1.5 Canopius may (in accordance with the terms of the Implementation Agreement) implement the acquisition of the entire issued and to be issued common share capital of Omega by making, directly or indirectly, a Takeover Offer (as defined in Section 974 of the Companies Act 2006 or an equivalent offer under the provisions of the Bermuda Companies Act 1981) as an alternative to the Amalgamation. In such event, the Takeover Offer, will be implemented on the same terms (subject to appropriate amendments), so far as applicable, as those which would apply to the Amalgamation. In particular, Conditions 1.1 and 1.2 would not apply, however, the takeover offer would be subject to the following further condition:
(a) "valid acceptances being received (and not, where permitted, withdrawn) by not later than 3.00 p.m. (London time) on the first closing date of the Takeover Offer (or such later time(s) and/or date(s) as Canopius, may, decide in respect of not less than "X" per cent. (or such lower percentage as Canopius may decide) of the voting rights carried by the Omega Shares to which the Takeover Offer relates, provided that this condition will not be satisfied unless Canopius (together with its wholly owned subsidiaries, if any) shall have acquired or agreed to acquire (whether pursuant to the takeover offer or otherwise), directly or indirectly, Omega Shares carrying in aggregate more than 50 per cent. of the voting rights then normally exercisable at a general meeting of Omega."
Where "X" in the above condition will be 75% if and for so long as the Acquisition or Takeover Offer is recommended by the Omega Board but shall otherwise be 90%.
For the purposes of this Condition 1.5:
- Omega Shares which have been unconditionally allotted shall be deemed to carry the voting rights they will carry upon issue;
- Omega Shares that cease to be held in treasury are Omega Shares to which the Takeover Offer relates; and
- the expression "Omega Shares to which the Takeover Offer relates" shall be construed in accordance with the Bermuda Companies Act.
1.6 The availability of the Acquisition to persons not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions. Persons who are not resident in the United Kingdom should inform themselves about and observe any applicable requirements.
1.7 The Acquisition will be governed by Bermudian law and be subject to the jurisdiction of the Courts of Bermuda and to the Conditions set out in this announcement and in the formal Circular. The Acquisition will comply with the applicable rules and regulations of the Financial Services Authority, the London Stock Exchange and the UKLA.
2. Certain further terms of the Acquisition
2.1 Omega Shares, which will be acquired under the Acquisition, will be acquired fully paid and free from all liens, equities, charges, encumbrances, options, rights of pre‑emption and any other third party rights and interests of any nature and together with all rights now or hereafter attaching or accruing to them, including voting rights and the right to receive and retain in full all dividends and other distributions (if any) declared, made or paid on or after the date of this announcement.
APPENDIX 2
SOURCES OF INFORMATION AND BASES OF CALCULATION
In this announcement:
a) As at the close of business on 24 April 2012, being the last Business Day prior to the date of this announcement, Omega had in issue 244,229,862 Omega Shares. The International Securities Identification Number for Omega Shares is BMG6765P1095.
b) The value of approximately £163.9 million attributed to the fully-diluted share capital of Omega is based upon the 244,229,862 Omega Shares in issue on 24 April 2012, being the last Business Day prior to the date of this announcement, and the 350,000 Omega Shares which may be issued based on the expected vesting of awards under all Omega Share Schemes if the Acquisition becomes Effective.
c) Unless otherwise stated, financial information relating to the Omega Group has been extracted or derived (without any adjustment) from Omega's audited annual report and accounts for the financial year ended 31 December 2011.
d) Unless otherwise stated, financial information relating to Canopius has been extracted or derived (without any adjustment) from Canopius' unaudited accounts for the financial year ended 31 December 2011.
e) Unless otherwise stated, all prices and closing prices for Omega Shares are closing middle market quotations derived from the Daily Official List.
APPENDIX 3
DETAILS OF IRREVOCABLE UNDERTAKINGS
Omega Directors
The following Omega Directors who are Omega Shareholders have given irrevocable undertakings to vote in favour of the Acquisition at the Special General Meeting (or to accept an offer (if the Acquisition is implemented by way of a Takeover Offer)) in relation to the following Common Shares:
Name | Number ofCommon Shares | Percentage of issued share capital of Omega |
John Coldman | 1,125,000 | 0.46% |
Richard Pexton | 232,997 | 0.10% |
Total | 1,357,997 | 0.56% |
These irrevocable undertakings will lapse in the event that the Circular is not dispatched to Omega Shareholders within 28 days of the date of this announcement or in the event that the Acquisition lapses or is otherwise withdrawn in accordance with its terms and further will cease to be binding if a competing offer is made which values the Common Shares at a price per share at least 10 per cent. higher than the Acquisition Price.
Other Omega Shareholders
Certain of the Omega Shareholders have given irrevocable undertakings to vote or, in the case of Invesco Asset Management Ltd, to instruct its clients' custodians to vote in favour of the Acquisition at the Special General Meeting (or to accept an offer (if the Acquisition is implemented by way of a Takeover Offer)) in relation to the following Common Shares:
Name | Number ofCommon Shares | Percentage of issued share capital of Omega |
(a) Invesco Asset Management Ltd | 69,483,215 | 28.45 % |
(b) Threadneedle Asset Management Limited | 17,299,786 | 7.08 % |
(c) Aviva Investors Global Services Limited | 17,177,223 | 7.03 % |
(d) Artemis Investment Management LLP | 13,536,375 | 5.54 % |
Total | 117,496,599 | 48.11 % |
Each of these irrevocable undertakings will lapse in the event that the Circular is not dispatched to Omega Shareholders within 28 days of the date of this announcement or in the event that the Acquisition lapses or is otherwise withdrawn in accordance with its terms.
The irrevocable undertaking referred to in paragraph (a) above will cease to be binding if (i) a third party announces an offer, scheme of arrangement, merger or amalgamation to acquire the whole of the issued and to be issued share capital of Omega which values the Common Shares at a price per share at least 10 per cent. higher than the Acquisition Price or (ii) Canopius issues a revised offer for Omega which in the reasonable opinion of Invesco Asset Management Ltd represents a diminution in the value of the Acquisition Price.
The irrevocable undertakings referred to in paragraphs (b) and (c) above will cease to be binding if a third party announces a firm intention to make an offer for the whole of the issued share capital of Omega (other than shares already held by the third party offeror) which, in the reasonable opinion of the persons giving these undertakings values the Common Shares at least 10 per cent. higher than the Acquisition Price. Further (i) the irrevocable undertaking referred to in paragraph (b) above will cease to be binding if there is a material change in the underlying information relating to the Acquisition upon which Threadneedle Asset Management Limited has based its decision to give the undertaking and (ii) the irrevocable undertaking referred to in paragraph (c) above will cease to be binding if Canopius issues a revised offer for Omega which values the Common Shares at less than the Acquisition Price or which contains a cash element of less than 67 pence per Common Share.
The irrevocable undertaking referred to in paragraph (d) above will cease to be binding if (i) a third party announces an offer, scheme of arrangement, merger or amalgamation to acquire the whole of the issued and to be issued share capital of Omega which values the Common Shares at a price per share at least 10 per cent. higher than the Acquisition Price or (ii) Canopius issues a revised offer for Omega which in the reasonable opinion of Keefe, Bruyette & Woods and Aon Benfield Securities represents a diminution in the value of the Acquisition Price, including a revised offer which contains a cash element of less than 67 pence per Common Share.
APPENDIX 4
DEFINITIONS
The following definitions apply throughout this announcement unless otherwise stated or the context otherwise requires:
"Acquisition" | means the recommended acquisition by Canopius of the entire issued and to be issued share capital of Omega at the Acquisition Price to be effected in accordance with the Implementation Agreement by means of the Amalgamation or a Takeover Offer, (if Canopius in accordance with the terms of the Implementation Agreement elects to proceed by way of a Takeover Offer) and shall, in either case, where the context so requires include any subsequent revision, variation, extension or renewal thereof (howsoever such acquisition is implemented in accordance with the terms of the Implementation Agreement); |
"Acquisition Effective Date" | means that date upon which: (i) the Amalgamation becomes effective in accordance with its terms; or (ii) if Canopius elects in accordance with the terms of the Implementation Agreement to proceed to implement the Acquisition by way of a Takeover Offer, the date that such an offer becomes or is declared unconditional in all respects; |
"Acquisition Price" | means 67 pence for each Common Share; |
"Amalgamated Company" | means the company which will continue as a Bermuda exempted company with the name of Canopius Holdings Limited following the Amalgamation; |
"Amalgamation" | means the amalgamation of Omega and Canopius SPV on the terms and conditions of the Implementation Agreement and the Amalgamation Agreement and in accordance with the Bermuda Companies Act; |
"Amalgamation Agreement" | means the conditional agreement effecting the amalgamation of Canopius SPV and Omega under the Bermuda Companies Act to be entered into between Omega (1); and Canopius (2); and Canopius SPV (3) in the form set out in the Implementation Agreement; |
"Amalgamation Conditions" | means the conditions set out in Appendix 1 to this announcement; |
"Amalgamation Resolutions" | means the shareholder resolutions required to implement the Amalgamation in the form as set out in the Implementation Agreement; |
"Aon Benfield Securities" | means Aon Benfield Securities Limited; |
"Authorisations" | means authorisations, orders, grants, recognitions, determinations, certifications, confirmations, consents, licences, clearances, exemptions, valuations, reports, permissions and approvals; |
"Bermuda Companies Act" | means the Companies Act 1981 of Bermuda (as amended from time to time); |
"Bermuda Insurance Act" | means the Insurance Act 1978 of Bermuda (as amended from time to time); |
"Bregal Fund" | means The Bregal Fund III L.P., a private equity fund managed by Bregal Capital LLP; |
"Business Day" | means a day (other than a Saturday or Sunday) on which banks in the City of London and Bermuda are generally open for business; |
"Bye-laws" | means the bye-laws of Omega from time to time; |
"Canopius" | means Canopius Group Limited; |
"Canopius SPV" | means Canopius Holdings Limited, a wholly-owned subsidiary of Canopius, which is incorporated as a Bermuda exempted company limited by shares; |
"Canopius Board" or "Canopius Directors" | means the directors of Canopius from time to time; |
"Canopius Corporate Members" | means Canopius Capital Limited; Canopius Capital Two Limited; Canopius Capital Three Limited; Canopius Capital Four Limited; Canopius Capital Five Limited; Canopius Capital Six Limited; Canopius Capital Seven Limited; Canopius Capital Eight Limited; Canopius Capital Nine Limited; Canopius Capital Ten Limited; Canopius Capital Eleven Limited; Canopius Capital Twelve Limited; Canopius Capital Fourteen Limited; Flectat Limited; Acorn Corporate Capital Limited; Creechurch Dedicated Limited; Creechurch Dedicated (2) Limited; Creechurch Dedicated (3) Limited; Packchance Limited; Oak Dedicated Limited; Oak Dedicated Two Limited; Oak Dedicated Three Limited, Oak Dedicated Four Limited; Camperdown UK Ltd; |
"Canopius Group" | means Canopius and its Group including Canopius SPV; |
"Cenkos" | means Cenkos Securities plc; |
"Circular" | means the document to be addressed to Omega Shareholders and containing a notice convening the Special General Meeting to consider and, if thought fit, pass the Amalgamation Resolutions; |
"Closing Price" | means the closing middle market quotation of a Common Share, as derived from the Daily Official List; |
"Common Shares" | means the common shares of par value $0.10 each in the capital of Omega and, where the context so permits, shall include any Depositary Interests representing such Common Shares; |
"Companies Act 2006" | means the UK Companies Act 2006 (as amended from time to time); |
"Competing Proposal" | means any bona fide offer or proposal (including a partial or tender offer), scheme, merger, amalgamation and whether or not subject to pre-conditions or possible offer, business combination or similar transaction which is proposed by a third party (which is not acting in concert with Canopius or Canopius SPV), the purpose of which is to enable (a) that third party, directly or indirectly, to acquire (in one transaction or a series of transactions) and when aggregated with any Common Shares already held by such third party (and any person acting in concert with that third party) more than 50 per cent. of the issued and to be issued share capital of Omega or the whole or more than 50 per cent. of the business and assets of Omega or any of its subsidiaries or (b) that third party and Omega to effect a Reverse Takeover or (c) that third party, directly or indirectly, to acquire (in one transaction or a series of transactions), including by way of an issue of shares (or securities granting rights to subscribe for or convert or exchange any securities into shares), shares which carry or would when issued, carry 10 per cent. or more of the votes exercisable at a general meeting of Omega (when aggregated with any Common Shares already held by such third party and any person acting in concert with that person) or (d) the entering into by any member of the Omega Group of a transaction or series of transactions howsoever implemented that, in any case, would be reasonably likely to preclude, impede, delay or prejudice the implementation of the Acquisition; |
"Conditions" | means: (i) for so long as the Acquisition is being implemented by means of the Amalgamation, the terms and conditions comprising the Amalgamation Conditions; and (ii) for so long as the Acquisition is being implemented by means of the Takeover Offer, the terms and conditions comprising the Takeover Offer Conditions, and "Condition" shall be construed accordingly; |
"Connected Persons" | means those persons whose interests in shares the Canopius Directors and the Omega Directors are, individually and collectively, respectively taken to be interested in pursuant to Part 22 of the Companies Act 2006 and related regulations; |
"Court" | means the Supreme Court of Bermuda; |
"CREST" | means the relevant system (as defined in the CREST Regulations) in respect of which Euroclear UK and Ireland Limited is the Operator (as defined in the CREST Regulations); |
"CREST Regulations" | means the Uncertificated Securities Regulations 2001 (SI 2001/3755); |
"Depositary Interests" | means the depositary interests representing Common Shares held through CREST established pursuant to the deed poll dated 15 September 2006 executed by Capita IRG Trustees Limited; |
"Disclosure Rules and Transparency Rules" | means the disclosure rules and transparency rules made by the FSA and forming part of the FSA's handbook of rules and guidance, as from time to time amended. |
"Effective" | means, in the context of the Acquisition: (a) if the Acquisition is effected by means of the Amalgamation, the Amalgamation having become effective pursuant to its terms; or (b) if the Acquisition is effected by means of Takeover Offer, the Takeover Offer having been declared or become unconditional in all respects; |
"Effective Time" | means 6:00 p.m. on the Acquisition Effective Date; |
"FSA" | means the Financial Services Authority of the UK (or any successor authority or authorities carrying out insurance or insurance mediation regulatory functions in the United Kingdom and/or the function of the competent authority under Part VI of FSMA from time to time); |
"FSMA" | means the UK Financial Services and Markets Act 2000 (as amended from time to time); |
"Group" | means, in relation to any person, that person and any companies which are holding companies, subsidiaries or Subsidiary Undertakings of it or of any such Holding Company and "Group Company" shall mean any one of them; |
"Holding Company" | shall have the meaning ascribed to it in section 736 of the Companies Act 2006; |
"Implementation Agreement" | means the agreement between Canopius (1), Canopius SPV (2) and Omega (3), dated 25 April 2012, in relation to the implementation of the Acquisition; |
"Kinmont" | means Kinmont Limited; |
"Keefe, Bruyette & Woods" | means Keefe, Bruyette & Woods Limited; |
"Listing Rules" | means the rules and regulations made by the FSA in its capacity as the UKLA under FSMA, and contained in the UKLA's publication of the same name; |
"Lloyd's" | means the Society and Corporation of Lloyd's created and governed by the Lloyd's Acts 1871 to 1982, including the Council of Lloyd's (and its delegates and other persons through whom the Council may act), as the context may require; |
"Lloyd's Membership Byelaw" | means the Lloyd's Membership Byelaw made by the Council of Lloyd's on 7 December 2005 (as amended from time to time); |
"Lloyd's Underwriting Byelaw" | means the Lloyd's Underwriting Byelaw made by the Council of Lloyd's on 4 June 2003 (as amended from time to time); |
"London Stock Exchange" | means London Stock Exchange plc; |
"Long Stop Effective Date" | means 5:00 p.m. on 31 October 2012 or such later date as Canopius and Omega may agree in writing; |
"Official List" | means the Official List maintained by the UKLA; |
"Omega" | means Omega Insurance Holdings Limited; |
"Omega Board" or "Omega Directors" | means the directors of Omega from time to time; |
"Omega Group" | means Omega and its Group; |
"Omega Share Schemes" | means the Omega Long Term Incentive Plan and the Omega Executive Plan; |
"Omega Shareholders" | means holders of Common Shares from time to time (including such persons who hold an interest in Common Shares through Depositary Interests); |
"Panel" | means the UK Panel on Takeovers and Mergers; |
"Relevant Jurisdiction" | means Bermuda, the United States of America and any Member State of the EU; |
"Restricted Jurisdiction" | means any jurisdiction where local laws or regulations may result in a significant risk of civil, regulatory or criminal exposure if information concerning the Acquisition is sent or made available to Omega Shareholders in that jurisdiction; |
"Reverse Takeover" | means as defined in Rule 10.2.2(4) of the Listing Rules; |
"Solvency II" | means the implementation of the European Parliament and Council Directive (2009/138/EC) on the taking-up and pursuit of the business of insurance and reinsurance; |
"Special General Meeting" | means the special general meeting of the shareholders of Omega to be convened to consider and, if thought fit, to approve the Amalgamation Resolutions and any adjournment thereof; |
"Subsidiary Undertaking" | has the meaning ascribed to it in section 1162 of and Schedule 7 of the Companies Act 2006; |
"Takeover Code" | means the City Code on Takeovers and Mergers as amended and in force from time to time; |
"Takeover Offer Conditions" | means the condition that the Takeover Offer be conditional on valid acceptances being received in respect of not less than 90 per cent. in nominal value of the Common Shares (or such lower percentage as the Canopius may specify, in the Takeover Offer Announcement) to which the Takeover Offer relates and all of the Amalgamation Conditions other than Conditions 1.1 and 1.2; |
"Takeover Offer" | means a takeover offer to acquire the entire issued and to be issued share capital of Omega other than shares that at the date of the offer are already held by the offeror on terms that are the same in relation to all shares to which the offer relates; |
"Third Party"
| means any central bank, ministry, governmental, quasi-governmental (including the European Union, supra national, statutory, regulatory or investigative body or authority (including any national or supra national anti-trust or merger control authority), national, state, municipal or local government (including any subdivision, court, administrative agency or commission or other authority thereof), body exercising any regulatory, taxing, or other authority, in any Relevant Jurisdiction; |
"Tower Group" | means Tower Group, Inc; |
"United States" or "US" | means the United States of America, its territories and possessions, any state of the United States and the District of Columbia, and all other areas subject to its jurisdiction; |
"UKLA" | means the FSA acting in its capacity as the competent authority for listing in the United Kingdom for the purposes of Part VI of FSMA; |
"West Hill Corporate Finance" | means West Hill Corporate Finance Limited; |
"Wider Canopius Group" | means Canopius and its subsidiaries, Subsidiary Undertakings, associated undertakings and any other undertaking in which Canopius and/or any such subsidiary or associated undertakings (aggregating their interests) has or together have a direct or indirect interest in ten per cent. or more of the equity share capital (as defined in the Companies Act 2006), as at the date of this announcement and not including, for the avoidance of doubt, any member of the Omega Group; and |
"Wider Omega Group" | means Omega and the subsidiaries and Subsidiary Undertakings of Omega and its associated undertakings (including any joint venture, partnership, firm or company in which any member of the Omega Group is interested or any undertaking in which Omega and such undertakings (aggregating their interests) have a substantial interest). |
In this announcement, unless the context otherwise requires:
·; "associated undertaking" has the meaning given by paragraph 19 of Schedule 6 to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 other than paragraph 19(1)(b) of Schedule 6 to those Regulations;
·; references to a "person"include any individual, firm, body corporate (wherever incorporated), government, state or agency of a state or any joint venture, association, partnership, works council or employee representative body (whether or not having separate legal personality);
·; references to "acting in concert" shall be construed in accordance with the Takeover Code;
·; unless otherwise stated references to time are to London time; and
·; any phrase introduced by the terms "including", "include", "in particular" or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms.