Update on Proposed Transaction

RNS Number : 4394P

Standard Life Aberdeen plc

29 May 2018

 

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THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

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Standard Life Aberdeen plc

Update on proposed transaction with Phoenix

 Capital return proposal

Standard Life Aberdeen plc ("SLA") is providing an update regarding the proposed sale of its UK and European insurance business ("Standard Life Assurance") to Phoenix Group (the "proposed transaction"), ahead of its annual general meeting taking place today.

Specifically, SLA announces today:

·     Proposed return of capital: of up to £1.75 billion to SLA shareholders, with £1.0 billion to be returned to shareholders by way of a B share scheme (a minimum of 33.4p per share based on current expectations) and the remaining up to £750 million to be returned by way of a share buyback programme (the "proposed return of capital")

·     Timetable: a shareholder circular in respect of the proposed transaction expected to be published tomorrow, 30 May 2018, with a general meeting for SLA shareholders to approve the proposed transaction and the proposed return of capital expected to be held on 25 June 2018

Proposed return of capital

The SLA Board expects that the company will be supervised at the group level on a CRD IV basis following completion of the proposed transaction ("completion"). This is subject to receiving regulatory approval. As announced on 3 May 2018, SLA continues to engage with its UK regulators in respect of their assessment of the proposed transaction and its impact on the group.

The SLA Board expects that there will be surplus capital within the group as a result of the receipt of proceeds from the proposed transaction and anticipated lower capital requirements. SLA has therefore considered the potential for a substantial return of capital to shareholders following completion. We are today announcing that SLA proposes to return up to £1.75 billion to shareholders following completion, subject to shareholder and regulatory approvals.

£1.0 billion is expected to be returned to SLA shareholders by way of a B share scheme, involving the issue of new B shares to shareholders which SLA will subsequently redeem for cash. To maintain comparability between the market price per SLA ordinary share before and after the implementation of the B share scheme, it is proposed that the B share scheme will be accompanied by a share consolidation. Subject to regulatory approval(s), SLA anticipates that the B share scheme and share consolidation will be conducted soon after completion.

Following completion of the proposed B share scheme and share consolidation, SLA proposes to return up to a further £750 million to shareholders by way of a share buyback programme. It is expected that the share buyback programme will involve the on-market purchase of SLA shares and will commence after completion of the B share scheme and share consolidation, subject to regulatory approval(s) and market conditions at the time.

The balance of proceeds from the proposed transaction, combined with existing liquidity within the SLA Group, will be used to retire a proportion of SLA's outstanding debt of £1.9 billion and support investment and other general corporate purposes. It is intended that SLA will undertake an exercise to retire its outstanding tier 1 bonds, while continuing to evaluate options in relation to the outstanding tier 2 instruments, with a focus on maximising the efficiency of its capital and liquidity.

Publication of shareholder circular

Full details of the proposed transaction and the proposed return of capital will be set out in the shareholder circular which is expected to be published tomorrow and sent to SLA shareholders shortly thereafter, with the general meeting of the company to approve the proposed transaction and proposed return of capital expected to take place on 25 June 2018.

The circular will include important information and details in relation to SLA's strategy and plans, including the implementation of a revised operating model which is expected to enhance the commercial and operational delivery of its strategy.

As previously announced, the proposed transaction is expected to complete in the third quarter of 2018.

Commenting ahead of the company's annual general meeting, Sir Gerry Grimstone, Chairman of SLA, said:

"The last year has been a period of significant change for Standard Life Aberdeen with the proposed sale of the UK and European insurance businesses completing our transformation to a capital light investment company.

"We are continuing to focus on harnessing the breadth and depth in our investment capabilities to deliver cost effective solutions to meet the needs of our clients and customers across multiple channels and geographies.

"The cash generated from the sale will enable us to continue to invest in the development of our business and also to return surplus capital to shareholders. Our proposal to return up to £1.75bn by way of a B share scheme and share buybacks represents over 15% of our market capitalisation at close of business on 25 May 2018, and would extend our long-running track record of returning surplus cash to shareholders."

29 May 2018

Enquiries:

Media Enquiries
James Thorneley, Head of Communications, Aberdeen Standard Investments	[phone] [phone]
Katy Hetherington, PR Manager, Standard Life Aberdeen	[phone]* [phone]
Investor Enquiries
Jakub Rosochowski, Investor Relations Director,      Standard Life Aberdeen	[phone]* [phone]
Neil Longair, Investor Relations Manager, Standard Life Aberdeen	[phone]* [phone]

* Calls may be monitored and/or recorded to protect both you and us and help with our training. Call charges will vary.

Standard Life Aberdeen plc LEI: OTMBS544NMO7GLCE7H90

Classification: 2.2. Inside Information

 

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