23 February 2010
Market Announcement (LOM)
Proposal to restructure
The Directors of both Lombard Group Limited (LOM) and Australian Consolidated
Insurance Limited (ACIL) are pleased to announce that, subject to shareholder
consent, we are proceeding with the acquisition by LOM of all the shares in
ACIL.
If this "reverse takeover" is approved, then:
- Existing shareholders in LOM will receive an interest in an unlisted
vehicle, equal to their current interest in LOM, that contains LOM''s residual
assets; and
- ACIL''s businesses will become part of a listed group and ACIL''s
shareholders will own majority of the shares in LOM.
ACIL is an Australasian company that provides differentiated insurance
products and services to purchasers of insurance. The ACIL group has 18
subsidiary companies in the following specialised insurance segments:
- Insurance broking
- Underwriting agency
- Risk Management
- Insurance Premium Funding
ACIL currently manages in excess of $80million of insurance premiums from
offices in Perth, Sydney, Melbourne, Brisbane, Auckland and Hamilton.
Further details about ACIL are set out below.
Outline of proposed transaction (Note: All steps are subject to shareholder
approval).
- LOM proposes to make a takeover offer to ACIL shareholders for all
ACIL''s existing shares (being 42,834,287 ordinary shares in ACIL).
- LOM will offer 1,480,246,656 new shares in LOM as consideration for the
ACIL shares (being 34.5572 new LOM shares for each ACIL share).
- If the takeover offer is accepted by all ACIL shareholders, those
shareholders will hold 98.5% of LOM.
- Prior to the takeover being completed, LOM will reorganise its
subsidiaries so that assets and selected liabilities unrelated to the ongoing
business are consolidated under a special purpose subsidiary and existing LOM
shareholders will (for no consideration) receive shares in that company in
the same proportion as they currently hold shares in LOM.
- If the takeover offer is successful, LOM will make a buy back offer
in cash to all existing LOM shareholders at a price per share which is equal
to the exchange price for the new LOM shares issued under the takeover offer
(being NZ$0.01196 per existing LOM share). LOM shareholders can choose to
accept all or part of the buy back offer.
Next steps
Having now obtained the necessary approval from NZX, the following documents
will be sent to LOM shareholders this week:
- Notice of special meeting of shareholders
- Profile document
- Independent valuation report
An announcement of the details of the shareholder meeting, including the
resolutions which make up the transaction, is expected to be made this
Thursday.
LOM''s Chief Executive Michael Reeves commented that: "The proposed reverse
takeover by ACIL will be positive for all LOM stakeholders and we wish the
new entity a prosperous future. The insurance industry has been one of the
least affected industry sectors and appears to have a positive outlook".
ACIL''s Managing Director Wayne Miller commented that: "We are delighted with
the outcome and thank all concerned who assisted in completing the first
major milestone to our listing on a credible stock exchange. Our group is
confident of the opportunities which exist in New Zealand, which make for
ideal synergies with Australia delivering a strong opportunity for Lombard
Group Ltd and Australian Consolidated Insurance Limited shareholders whilst
providing good investment potential for new investors".
Australian Consolidated Insurance Limited
ACIL''s core business is insurance broking and underwriting agency that is
characterised by the consistency of its revenue and reliability of its
renewals. ACIL''s business model involves aggregation and consolidation with a
focus on specialising in general insurance distribution functions of the
insurance industry that still commonly comprises smaller scale operators.
ACIL''s acquisition of Hamilton based underwriting agency, Classic Cover
Insurance Limited, on the 30 June 2009 complements the dynamic growth of its
New Zealand operations by adding close to a further 15,000 clients to the
group''s distribution.
ACIL has identified substantial opportunities for expansion in Australia and
New Zealand.
Further details will be contained within the Profile document. Information
about ACIL is also available at www.australianconsolidated.com.au
Contact:
Michael Reeves
Chief Executive Officer
Lombard Group Limited
Wayne Miller
Executive Chairman
Managing Director
Australian Consolidated Insurance Limited
+61 892870400
End CA:00191552 For:LOM Type:GENERAL Time:2010-02-23:17:38:41