Beazley Group PLC
13 February 2009
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN
This announcement shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale or purchase of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The availability of the Rights Issue and Placing to persons not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions. Such persons should inform themselves about and observe any applicable requirements.
Beazley Group plc ('Beazley')
Fully underwritten Rights Issue and Placing to raise approximately £150 million (net of expenses) to support acquisition of US-based underwriting manager and expand existing underwriting activities at Lloyd's
Rights Issue and Placing to raise £150 million (net of expenses)
9 for 19 fully underwritten Rights Issue of 165,589,635 new Ordinary Shares and Placing of 17,478,904 new Ordinary Shares at issue price of 86 pence per share
The Issue Price represents:
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an approximate 26% discount to the closing middle market price of 117 pence per Ordinary Share on 5 February 2009 (being the last Business Day before the Company's announcement noting media speculation regarding a potential capital raising); and |
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an approximate 21% discount to the closing middle market price of 108.5 pence per Ordinary Share on 12 February 2009 (being the last Business Day before the announcement of the terms of the Rights Issue and Placing) |
Reasons for the Rights Issue
Positive trading outlook driven by improving rating environment following significant industry-wide reduction in (re)insurance capital and the effects of recent foreign exchange movements
Rate improvements, already experienced in a number of core lines, expected to continue and extend across Beazley's specialist book presenting new business and wider strategic opportunities
Capital raising will enable the Group to take advantage of these conditions by providing:
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Funds to support the expansion of the Group's existing underwriting activities at Lloyd's; and |
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Funds to acquire and support First State Management Group, Inc., a US-based underwriting manager specialising in commercial excess and surplus lines property coverage |
Commenting, Andrew Horton, Chief Executive Officer of Beazley said:
'We called a turn in the market last October and foresaw 'significant opportunities' for Beazley. Opportunities to grow our Lloyd's business and our locally underwritten US business have increased since then, with January renewals confirming our expectations of premium rate rises in many classes.
'The acquisition of First State marks a significant step forward in the development of our US strategy, which focuses on gaining access to profitable business that would not normally come to London. We have reinsured the business underwritten by First State for many years and the expertise of their team and quality of their broker relationships is well known to us.
'In London, the rights issue will also support the growth of our specialist teams in markets that are now seeing diminished competition and a clear flight to quality from brokers and clients. In both the near and medium term, we see a range of attractive opportunities for profitable capital deployment across our core lines.'
This summary should be read in conjunction with the detailed announcement which follows. Certain terms used in this summary are defined in the detailed announcement.
Enquiries: |
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Beazley Group PLC |
020 7667 0623 |
Andrew Horton, Chief Executive Officer |
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Neil Maidment, Chairman of Underwriting Committee |
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Numis Securities Limited |
020 7260 1000 |
Oliver Hemsley |
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Tom Booth |
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Lexicon Partners Limited |
020 7653 6000 |
Angus Winther |
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Nick Chapman |
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Numis Securities Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively as sponsor, stockbroker, lead manager, lead underwriter and joint financial advisor to the Company in connection with the Rights Issue and Placing and for no one else and will not be responsible to anyone other than the Company for providing the protections afforded to customers of Numis Securities Limited, or for providing advice in relation to the Rights Issue and Placing or any other matters referred to in this announcement.
Lexicon Partners Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively as joint financial adviser to the Company in connection with the Rights Issue and Placing and for no one else and will not be responsible to anyone other than the Company for providing the protections afforded to customers of Lexicon Partners Limited, or for providing advice in relation to the Rights Issue and Placing or any other matters referred to in this announcement.
This announcement does not constitute or form part of any offer or invitation to purchase, otherwise acquire, subscribe for, sell, otherwise dispose of or issue, or any solicitation of any offer to sell, otherwise dispose of, issue, purchase, otherwise acquire or subscribe for, any security.
This announcement is an advertisement and does not constitute a prospectus. Nothing in this announcement should be interpreted as a term or condition of the Rights Issue and Placing. Any decision to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any Provisional Allotment Letter, Nil Paid Rights, Fully Paid Rights, New Shares and/or Placing Shares must be made only on the basis of the information contained in and incorporated by reference into the Prospectus. Copies of the Prospectus will be available on publication from Beazley's registered office. The Prospectus will also be available for inspection during usual business hours on any weekday (Saturdays, Sundays and Bank Holidays are excepted) from the date of its publication until Admission at the offices of Allen & Overy LLP, One Bishops' Square, London E1 6AD.
Numis Securities Limited, as underwriter of the Rights Issue and Placing may, in accordance with applicable legal and regulatory provisions and subject to the Placing and Underwriting Agreement, engage in transactions in relation to the Nil Paid Rights, the Fully Paid Rights, the New Shares, the Placing Shares, and/or related instruments for their own account for the purpose of hedging their underwriting exposure or otherwise. Except as required by applicable law or regulation, Numis Securities Limited does not propose to make any public disclosure in relation to such transactions.
No person has been authorised to give any information or to make any representations other than those contained in this announcement and, if given or made, such information or representations must not be relied on as having been authorised by Beazley, Numis Securities Limited or Lexicon Partners Limited. Subject to the Listing Rules, the Prospectus Rules and the Disclosure and Transparency Rules, the issue of this announcement shall not, in any circumstances, create any implication that there has been no change in the affairs of the business of the Beazley Group since the date of this announcement or that the information in it is correct as at any subsequent date.
The information contained herein is restricted and is not for release, publication or distribution, directly or indirectly, in whole or in part in, into or from the United States, Canada, Australia, or Japan or any other jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction. The Nil Paid Rights, the Fully Paid Rights, any Provisional Allotment Letters, the New Shares and the Placing Shares have not been and will not be registered under the securities laws of such jurisdictions and may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, within such jurisdictions except pursuant to an exemption from and in compliance with any applicable securities laws.
The distribution of this announcement, the Prospectus and/or the Provisional Allotment Letters and/or the transfer or offering of Nil Paid Rights, Fully Paid Rights, New Shares or Placing Shares into jurisdictions other than the United Kingdom is or may be restricted by law. Persons into whose possession this announcement or any such document comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.
This announcement and the information contained herein is not an offer of securities for sale or solicitation to buy any securities in the United States. This announcement and the information contained herein is not for distribution in or into the United States. The Nil Paid Rights, the Fully Paid Rights, the New Shares and the Placing Shares have not been and will not be registered under the US Securities Act or with any securities regulatory authority of any state or other jurisdiction. The Nil Paid Rights, the Fully Paid Rights, the New Shares and the Placing Shares may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered within the United States except in certain transactions exempt from, or not subject to, the registration requirements of the US Securities Act. There will be no public offer of the Nil Paid Rights, the Fully Paid Rights, the New Shares or the Placing Shares in the United States.
No statement in this announcement is intended as a profit forecast or a profit estimate and no statement in this announcement should be interpreted to mean that earnings per Ordinary Share for the current or future financial years would necessarily match or exceed the historical published earnings per Ordinary Share.
Prices and values of, and income from, securities may go down as well as up and an investor may not get back the amount invested. It should be noted that past performance is no guide to future performance. Persons needing advice should consult an independent financial adviser.
Unless otherwise indicated in this announcement, the financial information contained in this announcement has been presented in Pounds Sterling.
Neither the content of the Company's website (or any other website) nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.
This announcement has been prepared for the purposes of complying with applicable law and regulation in the United Kingdom 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 the United Kingdom.
The address of Numis Securities Limited is The London Stock Exchange Building, 10 Paternoster Square, London EC4M 7LT, United Kingdom. The address of Lexicon Partners Limited is 1 Paternoster Square, London EC4M 7DX.
Cautionary note regarding forward-looking statements
This announcement includes statements that are, or may be deemed to be, 'forward-looking statements'. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms 'believes', 'estimates', 'anticipates', 'expects', 'intends', 'plans', 'goal', 'target', 'aim', 'may', 'will', 'would', 'could' or 'should' or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this announcement and include statements regarding the intentions, beliefs or current expectations of the Directors, Beazley or the Beazley Group concerning, amongst other things, the results of operations, financial condition, liquidity, prospects, growth, strategies and dividend policy of the Beazley Group and the industries in which they operate.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future and may be beyond Beazley's ability to control or predict. Forward-looking statements are not guarantees of future performance. The Beazley Group's actual results of operations, financial condition, liquidity, dividend policy and the development of the industries in which they operate may differ materially from the impression created by the forward-looking statements contained in this announcement. Further, actual developments in relation to the Rights Issue and Placing, may differ materially from those contemplated by forward-looking statements depending on certain factors which include, but are not limited to: the risk that Shareholders may not vote in favour of the Resolutions; the risk that the Beazley Group will not be able to obtain the required approvals or clearances from regulatory and other agencies and bodies on a timely basis or at all; the risk that the other conditions of the Rights Issue and Placing may not be satisfied on a timely basis or at all; the risk that the Beazley Group may not realise the anticipated benefits from the Rights Issue and Placing. In addition, even if the results of operations, financial condition, liquidity and dividend policy of the Beazley Group, and the development of the industry in which it operates, are consistent with the forward-looking statements contained in this announcement, those results or developments may not be indicative of results or developments in subsequent periods. Important factors that could cause these differences include, but are not limited to: general economic and business conditions; (re)insurance pricing volatility; industry trends; competition; the availability of debt and other financing on acceptable terms; changes in government and other regulation, including in relation to the (re)insurance industry; changes in political and economic stability; currency fluctuations (including the £/US$ exchange rates); the Beazley Group's ability to integrate new businesses (including the acquisition of First State Management Group, Inc.) and changes in business strategy or development plans and other risks.
You are advised to read this announcement and the Prospectus, which is expected to be published today and the information incorporated by reference therein, in their entirety for a further discussion of the factors that could affect the Beazley Group's future performance and the industry in which it operates. In the light of these risks, uncertainties and assumptions, the events described in the forward-looking statements in this announcement may not occur.
Other than in accordance with their legal or regulatory obligations (including under the Listing Rules, the Prospectus Rules and the Disclosure and Transparency Rules), neither Beazley nor Numis Securities Limited nor Lexicon Partners Limited nor any of their officers, directors, employees or agents undertakes any obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future events or otherwise.
Rights Issue and Placing to raise £150 million (net of expenses)
1. Introduction
The Company proposes to raise approximately £150 million (net of expenses) by way of a 9 for 19 Rights Issue at 86 pence per New Share to Qualifying Shareholders and a Placing of 17,478,904 new Ordinary Shares at 86 pence per Placing Share.
The Issue Price of the Rights Issue and the Placing represents:
an approximate 26% discount to the closing middle-market price of 117 pence per Ordinary Share on 5 February 2009 (being the last Business Day before the Company's announcement noting media speculation regarding a potential capital raising); and
an approximate 21% discount to the closing middle-market price of 108.5 pence per Ordinary Share on 12 February 2009 (being the last Business Day before the announcement of the terms of the Rights Issue and Placing).
The Rights Issue and Placing is fully underwritten by Numis Securities Limited.
The Rights Issue and Placing is conditional, amongst other things, upon Shareholders' approval which will be sought at an Extraordinary General Meeting of the Company expected to be held on 18 March 2009 at 10:00 a.m.
2. Information on the Beazley Group PLC
Beazley is a global specialist insurance and reinsurance group, headquartered in London and listed on the London Stock Exchange's main market for listed securities, with underwriting operations in Lloyd's and the US and an international network of offices in France, Germany, Singapore, Hong Kong and Australia.
The Group's principal business is conducted through its managed syndicates at Lloyd's in the UK and the Beazley Insurance Company, Inc., an admitted carrier in all 50 states, in the US. In the UK, the Company's FSA regulated subsidiary, Beazley Furlonge Limited, acts as managing agent on behalf of the Group's Lloyd's syndicates which are fully-backed by Beazley capital, except Syndicate 623 which is backed by Lloyd's names. In the US, the Group writes business through its managing general agent, Beazley USA Services, Inc.
The Group's international activities are integrated onto a single operating platform and managed on a product line basis across six divisions, comprising Specialty Lines, Property, Marine, Reinsurance, Political Risks & Contingency, and Accident & Life.
3. Background to and reasons for the Rights Issue and Placing
3.1 Summary
The Board believes that the scale of recent underwriting and investment losses and corporate distress incurred by major (re)insurers has led to a significant fall in global underwriting capacity. This capacity reduction has been compounded by the withdrawal of alternative sources of underwriting capital owing to liquidity constraints within the wider financial services industry. As the supply of (re)insurance contracts and the industry reassesses the cost of its capital and the adequacy of its pricing, a consequent improvement in underwriting terms and conditions is occurring.
The Board believes that Beazley is strongly positioned to benefit from these improved trading conditions. Accordingly, the Board intends to use the proceeds of the Rights Issue and Placing to scale-up its operations and accelerate its strategic growth plans.
In summary, the reasons for the Rights Issue and Placing are for the Group to be able to provide, together with existing capital resources:
approximately £51m to fund the acquisition of and capital support for First State, a US-based underwriting manager specialising in commercial excess and surplus lines property coverage; and
approximately £103m of additional capital to support the expansion of the Group's existing underwriting activities driven by current and anticipated rating improvements and the effects of recent foreign exchange rate movements.
3.2 Underwriting market events: introduction
The availability of capital to underwrite (re)insurance risks dictates to a large extent the pricing environment in the industry. If the supply of such risk capital declines whilst the demand for (re)insurance remains comparatively undiminished, the rating conditions will improve for risk carriers. A lack of supply is typically caused by significant losses or a withdrawal of capital support.
In 2008, the Board believes that three events led to a sharp reduction in underwriting capital and consequently capacity. First of all, dramatic declines were witnessed in the value of equity and credit investments worldwide, with the (re)insurance industry reporting significant realised and unrealised losses on its investment portfolios, impacting adversely on its solvency, economic and rating agency capital. Secondly, the economic conditions associated with the sharp falls in asset values led to unprecedented levels of corporate distress creating considerable uncertainty over the future of certain - particularly US market - risk carriers. Thirdly, the (re)insurance industry experienced the second costliest year of insured catastrophe losses (estimated at US$50bn) on record, in part as a result of hurricanes Gustav and Ike.
3.3 Underwriting market events: industry effects
3.4 Underwriting market events: opportunities for Beazley
3.6 Use of proceeds: capital support for expansion of existing underwriting activities
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Additional premiums and capital arising from
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Original proposal to Lloyd's for 2009(1)
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Revision of exchange rate to £1:US$1.5(3)
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Expansion of the Group’s existing underwriting activities(2),(3)
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Acquisition of First State(2),(3)
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Revised proposal to Lloyd’s for 2009(2),(3)
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Gross premiums written (£m)
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876
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219
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110
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100
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1,305
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Capital required (funds at Lloyd’s) (£m)
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360
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70
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33
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27
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490
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Notes:
(1) £1: US$1.99
(2) £1: US$1.50
(3) The revised premium and capital figures stated are subject to Lloyd’s approval
The increased capital requirements shown above reflect the Group's focus on growth in short-tail catastrophe exposed lines currently experiencing the most attractive rating conditions. For 2009, the Group will increase its catastrophe risk appetite for a probabilistic 1 in 250 year US event to US$510m (net of reinsurance) (2008: US$340m). The Directors believe that this increase in the estimated probable maximum loss represents an appropriate increase to the Group's risk appetite during times of attractive pricing conditions. Furthermore, once the pro forma adjustments for the proceeds from the Rights Issue and the Placing have been taken into account, the increased estimated probable maximum loss as a percentage of net tangible assets as at 31 December 2008 represents an appropriate increase, in the opinion of the Directors, given the improving market conditions.
In summary, the Directors believe Beazley will require £154m of additional capital under its revised business plan for the 2009 year of account (£150m of which will be from the proceeds of the Rights Issue and Placing and the balance of which will come from existing capital resources), comprising £24m of consideration relating to the First State acquisition (at an estimated foreign exchange rate of £1:US$1.50) and £130m of funds at Lloyd's. This funds at Lloyd's requirement comprises: (i) £70m to support an increase in the Sterling value of US dollar denominated premiums arising from recent foreign exchange movements affecting the original 2009 business plan; (ii) £33m to support the Group's proposed premium increase for 2009; and (iii) £27m to support the new premiums to be written into Lloyd's from First State.
4. Dividend policy
5. Capital management
5.1 Share buybacks
5.2 Special dividend
6. Current trading and prospects
The Group today also announced its preliminary results for the year ended 31 December 2008, which contains a full commentary on current trading and prospects.
Beazley continues to trade in line with the Board's expectations and the Board believes that, in the absence of abnormal losses, the Rights Issue and Placing is expected to enhance the Group's net assets and earnings per share in the medium term.
In addition, the Board believes that the Company's prospects for at least the current financial year are encouraging.
7. Principal terms of the Rights Issue
8. Principal terms of the Placing
9. Extraordinary general meeting
The Extraordinary General Meeting is expected to be held at the offices of the Company, Plantation Place South, 60 Great Tower Street, London EC3R 5AD at 10.00 a.m. on 18 March 2009. The Extraordinary General Meeting is being held for the purpose of considering and, if thought fit, passing resolutions to approve the Placing and to grant the requisite authorities under the Companies Act to increase the Company's share capital and to allot and issue the New Shares and the Placing Shares.
The notice convening the Extraordinary General Meeting and setting out the full text of the Resolutions will be contained in the Prospectus relating to the Rights Issue and Placing which is expected to be published today.
10. Other Information
The full terms and conditions of the Rights Issue and Placing, including the procedure for acceptance and payment and the procedure in respect of rights not taken up, will be set out in the Prospectus, which is expected to be published today. The Prospectus will also contain the notice of the Extraordinary General Meeting which is expected to be held on 18 March 2009.
11. EXPECTED Timetable
The key principal events are as follows:
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2009
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Record Date for entitlement under the Rights Issue for Qualifying CREST Shareholders and Qualifying Non-CREST Shareholders
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close of business on 13 March
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Last time and date for receipt of Forms of Proxy for Extraordinary General Meeting
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10.00 a.m. on 16 March
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Record Date for entitlement under the Rights Issue
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5:00 p.m. on 16 March
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Extraordinary General Meeting
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10.00 a.m. on 18 March
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Despatch of Provisional Allotment Letters (to Qualifying Non-CREST Shareholders only)(1).
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18 March
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Start of subscription period
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19 March
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Ordinary Shares marked “ex-rights” by the London Stock Exchange
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8:00 a.m. on 19 March
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Dealings in New Shares, nil paid, commence on the London Stock Exchange
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8.00 a.m. on 19 March
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Nil Paid Rights credited to stock accounts in CREST of Qualifying CREST Shareholders only(1)
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8.00 a.m. on 19 March
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Nil Paid Rights and Fully Paid Rights enabled in CREST
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8.00 a.m. on 19 March
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Admission and commencement of dealings in Placing Shares
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8.00 a.m. on 19 March
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CREST accounts credited in respect of Placing Shares
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8.00 a.m. on 19 March
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Despatch of share certificates to certificated holders in respect of the Placing Shares
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by no later than 27 March
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Recommended latest time and date for requesting withdrawal of Nil Paid Rights or Fully Paid Rights from CREST (i.e. if Nil Paid Rights or Fully Paid Rights are in CREST and the Shareholder wishes to convert them to certificated form)
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4.30 p.m. on 30 March
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Recommended latest time for depositing renounced Provisional Allotment Letters, nil or fully paid, into CREST or for dematerialising Nil Paid Rights or Fully Paid Rights into a CREST stock account (i.e. if your Nil Paid Rights and Fully Paid Rights are represented by a Provisional Allotment Letter and you wish to convert them to uncertificated form)
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3.00 p.m. on 31 March
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Latest time and date for splitting Provisional Allotment Letters, nil or fully paid
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3.00 p.m. on 1 April
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Latest time and date for acceptance, payment in full and registration of renunciation of Provisional Allotment Letters(3)
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11.00 a.m. on 3 April
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Dealings in New Shares, fully paid, commence on the London Stock Exchange
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8.00 a.m. on 6 April
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New Shares, fully paid, credited to CREST stock accounts
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6 April
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Expected date of despatch of definitive share certificates for the New Shares in certificated form
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by no later than 15 April
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________
This announcement does not constitute or form part of any offer or invitation to purchase, otherwise acquire, subscribe for, sell, otherwise dispose of or issue, or any solicitation of any offer to sell, otherwise dispose of, issue, purchase, otherwise acquire or subscribe for, any security.
This announcement is an advertisement and does not constitute a prospectus. Nothing in this announcement should be interpreted as a term or condition of the Rights Issue and Placing. Any decision to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any Provisional Allotment Letter, Nil Paid Rights, Fully Paid Rights, New Shares and/or Placing Shares must be made only on the basis of the information contained in and incorporated by reference into the Prospectus. Copies of the Prospectus will be available on publication from Beazley's registered office. The Prospectus will also be available for inspection during usual business hours on any weekday (Saturdays, Sundays and Bank Holidays are excepted) from the date of its publication until Admission at the offices of Allen & Overy LLP, One Bishops' Square, London E1 6AD.
Numis Securities Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively as sponsor, stockbroker, lead manager, lead underwriter and joint financial advisor to the Company in connection with the Rights Issue and Placing and for no one else and will not be responsible to anyone other than the Company for providing the protections afforded to customers of Numis Securities Limited, or for providing advice in relation to the Rights Issue and Placing or any other matters referred to in this announcement.
Lexicon Partners Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively as joint financial adviser to the Company in connection with the Rights Issue and Placing and for no one else and will not be responsible to anyone other than the Company for providing the protections afforded to customers of Lexicon Partners Limited, or for providing advice in relation to the Rights Issue and Placing or any other matters referred to in this announcement.
Numis Securities Limited, as underwriter of the Rights Issue and Placing may, in accordance with applicable legal and regulatory provisions and subject to the Placing and Underwriting Agreement, engage in transactions in relation to the Nil Paid Rights, the Fully Paid Rights, the New Shares, the Placing Shares, and/or related instruments for their own account for the purpose of hedging their underwriting exposure or otherwise. Except as required by applicable law or regulation, Numis Securities Limited does not propose to make any public disclosure in relation to such transactions.
No person has been authorised to give any information or to make any representations other than those contained in this announcement and, if given or made, such information or representations must not be relied on as having been authorised by Beazley, Numis Securities Limited or Lexicon Partners Limited. Subject to the Listing Rules, the Prospectus Rules and the Disclosure and Transparency Rules, the issue of this announcement shall not, in any circumstances, create any implication that there has been no change in the affairs of the business of the Beazley Group since the date of this announcement or that the information in it is correct as at any subsequent date.
The information contained herein is restricted and is not for release, publication or distribution, directly or indirectly, in whole or in part in, into or from the United States, Canada, Australia, or Japan or any other jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction. The Nil Paid Rights, the Fully Paid Rights, any Provisional Allotment Letters, the New Shares and the Placing Shares have not been and will not be registered under the securities laws of such jurisdictions and may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, within such jurisdictions except pursuant to an exemption from and in compliance with any applicable securities laws.
The distribution of this announcement, the Prospectus and/or the Provisional Allotment Letters and/or the transfer or offering of Nil Paid Rights, Fully Paid Rights, New Shares or Placing Shares into jurisdictions other than the United Kingdom is or may be restricted by law. Persons into whose possession this announcement or any such document comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.
This announcement and the information contained herein is not an offer of securities for sale or solicitation to buy any securities in the United States. This announcement and the information contained herein is not for distribution in or into the United States. The Nil Paid Rights, the Fully Paid Rights, the New Shares and the Placing Shares have not been and will not be registered under the US Securities Act or with any securities regulatory authority of any state or other jurisdiction. The Nil Paid Rights, the Fully Paid Rights, the New Shares and the Placing Shares may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered within the United States except in certain transactions exempt from, or not subject to, the registration requirements of the US Securities Act. There will be no public offer of the Nil Paid Rights, the Fully Paid Rights, the New Shares or the Placing Shares in the United States.
No statement in this announcement is intended as a profit forecast or a profit estimate and no statement in this announcement should be interpreted to mean that earnings per Ordinary Share for the current or future financial years would necessarily match or exceed the historical published earnings per Ordinary Share.
Prices and values of, and income from, securities may go down as well as up and an investor may not get back the amount invested. It should be noted that past performance is no guide to future performance. Persons needing advice should consult an independent financial adviser.
Unless otherwise indicated in this announcement, the financial information contained in this announcement has been presented in Pounds Sterling.
Neither the content of the Company's website (or any other website) nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.
This announcement has been prepared for the purposes of complying with applicable law and regulation in the United Kingdom 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 the United Kingdom.
The address of Numis Securities Limited is The London Stock Exchange Building, 10 Paternoster Square, London EC4M 7LT, United Kingdom. The address of Lexicon Partners Limited is 1 Paternoster Square, London EC4M 7DX.
Cautionary note regarding forward-looking statements
This announcement includes statements that are, or may be deemed to be, 'forward-looking statements'. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms 'believes', 'estimates', 'anticipates', 'expects', 'intends', 'plans', 'goal', 'target', 'aim', 'may', 'will', 'would', 'could' or 'should' or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this announcement and include statements regarding the intentions, beliefs or current expectations of the Directors, Beazley or the Beazley Group concerning, amongst other things, the results of operations, financial condition, liquidity, prospects, growth, strategies and dividend policy of the Beazley Group and the industries in which they operate.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future and may be beyond Beazley's ability to control or predict. Forward-looking statements are not guarantees of future performance. The Beazley Group's actual results of operations, financial condition, liquidity, dividend policy and the development of the industries in which they operate may differ materially from the impression created by the forward-looking statements contained in this announcement. Further, actual developments in relation to the Rights Issue and Placing, may differ materially from those contemplated by forward-looking statements depending on certain factors which include, but are not limited to: the risk that Shareholders may not vote in favour of the Resolutions; the risk that the Beazley Group will not be able to obtain the required approvals or clearances from regulatory and other agencies and bodies on a timely basis or at all; the risk that the other conditions of the Rights Issue and Placing may not be satisfied on a timely basis or at all; the risk that the Beazley Group may not realise the anticipated benefits from the Rights Issue and Placing. In addition, even if the results of operations, financial condition, liquidity and dividend policy of the Beazley Group, and the development of the industry in which it operates, are consistent with the forward-looking statements contained in this announcement, those results or developments may not be indicative of results or developments in subsequent periods. Important factors that could cause these differences include, but are not limited to: general economic and business conditions; (re)insurance pricing volatility; industry trends; competition; the availability of debt and other financing on acceptable terms; changes in government and other regulation, including in relation to the (re)insurance industry; changes in political and economic stability; currency fluctuations (including the £/US$ exchange rates); the Beazley Group's ability to integrate new businesses (including the acquisition of First State Management Group, Inc.) and changes in business strategy or development plans and other risks.
You are advised to read this announcement and the Prospectus, which is expected to be published today and the information incorporated by reference therein, in their entirety for a further discussion of the factors that could affect the Beazley Group's future performance and the industry in which it operates. In the light of these risks, uncertainties and assumptions, the events described in the forward-looking statements in this announcement may not occur.
Other than in accordance with their legal or regulatory obligations (including under the Listing Rules, the Prospectus Rules and the Disclosure and Transparency Rules), neither Beazley nor Numis Securities Limited nor Lexicon Partners Limited nor any of their officers, directors, employees or agents undertakes any obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future events or otherwise.
- appendix
Definitions
In this announcement, the following expressions have the meaning ascribed to them unless the context otherwise requires:
Act or Companies Act |
the Companies Act 1985, as amended, or, as the context requires, the Companies Act 2006, as amended. |
Admission |
the admission of the New Shares (nil paid and fully paid) to the Official List becoming effective in accordance with the Listing Rules and the admission of such shares (nil paid and fully paid) to trading on the London Stock Exchange's market for listed securities becoming effective in accordance with the Admission and Disclosure Standards. |
Admission and Disclosure Standards |
the 'Admission and Disclosure Standards' of the London Stock Exchange, containing, among other things, the admission requirements to be observed by companies seeking admission to trading on the London Stock Exchange's main market for listed securities. |
Admission of the New Shares |
the admission of the New Shares (nil paid and/or fully paid as the context requires) to the Official List becoming effect in accordance with the Listing Rules and the admission of such shares (nil paid and fully paid) to trading on the London Stock Exchange's main market for listed securities becoming effective in accordance with the Admission and Disclosure Standards. |
Admitted Carrier |
an insurance company authorised to do business in the US. An agreement is entered into which stipulates the terms and conditions under which a business must conduct within a state in the US. |
Beazley or the Company |
Beazley Group plc, a public limited company incorporated in England and Wales with registered number 4082477. |
Beazley Group or Group |
the Company and each of its subsidiaries and subsidiary undertakings from time to time, including, where the context requires, First State Management Group, Inc. |
Board |
the Directors of Beazley. |
Business Day |
a day (other than a Saturday, Sunday or public holiday) on which banks are generally open for business in the City of London for the transaction of normal banking business. |
Capacity |
the maximum amount of premiums that can be accepted by a syndicate. Capacity also refers to the amount of insurance coverage allocated to a particular policyholder or in the marketplace in general. |
Capital Raising |
the Rights Issue and Placing. |
Certificated or in Certificated Form |
in relation to a share or other security, a share or other security which is not in uncertificated form. |
CREST |
the relevant system, as defined in the CREST Regulations (in respect of which Euroclear UK is the operator as defined in the CREST Regulations). |
Directors |
the executive Directors and non-executive Directors of the Company as at today's date. |
Disclosure and Transparency Rules |
the rules relating to the disclosure of information made in accordance with Section 73A(3) of the FSMA. |
Excluded Territories and each an Excluded Territory |
Australia, Canada, and Japan. |
Extraordinary General Meeting |
the extraordinary general meeting of Beazley which is expected to be held at 10:00 a.m. on 18 March 2009, notice of which will be set out in the Prospectus. |
Financial Services Authority or FSA |
the Financial Services Authority of the United Kingdom. |
First State |
First State Management Group, Inc. |
Form of Proxy |
the form of proxy for use at the Extraordinary General Meeting. |
FSMA |
the Financial Services and Markets Act 2000, as amended. |
Fully Paid Rights |
rights to acquire the New Shares, fully paid. |
Funds at Lloyd's or FAL |
funds held in trust at Lloyd's to support a member's underwriting activities. |
Gross Premiums Written |
amounts payable by the insured, excluding any taxes or duties levied on the premium, including any brokerage and commission deducted by intermediaries. |
Individual Capital Assessment or ICA |
the individual capital assessment provided by the Company to set out the amount of capital required by the Group to reflect underwritten risk. |
Issue Price |
86 pence per New Share. |
Listing Rules |
the Listing Rules made by the FSA under Part VI of FSMA. |
Lloyd's |
The Society and Corporation of Lloyd's created and governed by the Lloyd's Acts 1871-1982, including the Council of Lloyd's and its delegates and other persons through whom the Council may act, as the context may require. |
London Stock Exchange |
London Stock Exchange plc. |
New Shares |
ordinary shares to be allotted and issued pursuant to the Rights Issue. |
Nil Paid Rights |
rights to acquire the New Shares, nil paid. |
Non-CREST Shareholder |
a Shareholder who does not hold their Ordinary Shares in CREST. |
Official List |
The Official List of the FSA pursuant to Part VI of FSMA. |
Ordinary Shares or Shares |
the ordinary shares of 5 pence each in the share capital of the Company (including, if the context requires, the New Shares). |
Overseas Shareholders |
shareholders with registered addresses outside the United Kingdom or who are citizens or residents of countries outside the United Kingdom. |
Placing |
the placement of the Placing Shares under the Placing and Underwriting Agreement. |
Placing and Underwriting Agreement |
the placing and underwriting agreement dated 13 February 2009 between the Company and the Underwriter relating to the Rights Issue and Placing. |
Placing Shares |
the 17,478,904 new Ordinary Shares which have been placed pursuant to the Placing and Underwriting Agreement. |
Pounds Sterling or £ |
the lawful currency of the United Kingdom. |
Preliminary Results Announcement |
the announcement by Beazley of its audited preliminary financial statements for the Group on 13 February 2009. |
Prospectus |
the prospectus document which is expected to be published on 13 February 2009 in relation to the Capital Raising. |
Prospectus Rules |
the Prospectus Rules published by the FSA under Section 73A of FSMA. |
Provisional Allotment Letter or PAL |
the renounceable provisional allotment letter expected to be sent to Qualifying Non-CREST Shareholders in respect of the New Shares to be provisionally allotted to them pursuant to the Rights Issue. |
Qualifying CREST Shareholders |
Qualifying Shareholders holding Ordinary Shares in uncertificated form in CREST. |
Qualifying Non-CREST Shareholders |
Qualifying Shareholders holding Ordinary Shares in Certificated Form. |
Qualifying Shareholders |
holders of Ordinary Shares on the register of members of the Company at the Record Date with the exclusion of Shareholders with a registered address in or resident in, one of the Excluded Territories or subject to certain exceptions, the United States. |
Record Date |
5.00 p.m. on 16 March 2009. |
Resolutions |
the resolutions to be proposed at the Extraordinary General Meeting in connection with the Rights Issue and Placing, notice of which will be set out in the Prospectus. |
Rights |
rights to the New Shares pursuant to the Rights Issue. |
Rights Issue |
the proposed issue by way of rights of New Shares to Qualifying Shareholders on the basis described in the Prospectus and, in the case of Qualifying Non-CREST Shareholders, in the Provisional Allotment Letter. |
Shareholder |
A holder of Ordinary Shares from time to time. |
Stock Account |
an account within a member account in CREST to which a holding of a particular share or other security in CREST is credited. |
Surplus Lines Insurer |
an insurer that underwrites surplus lines insurance in the USA. Lloyd's underwriters are surplus lines insurers in all jurisdictions of the USA except Kentucky and the US Virgin Islands. |
UK Listing Authority or UKLA |
the FSA in its capacity as the competent authority for the purposes of Part VI of FSMA and in the exercise of its functions in respect of the admission to the Official List otherwise than in accordance with Part VI of FSMA. |
Underwriter |
Numis Securities Limited. |
United Kingdom or UK |
the United Kingdom of Great Britain and Northern Ireland. |
United States or US |
the United States of America, its territories and possessions, any state of the United States and the District of Columbia. |
US Securities Act or Securities Act |
the United States Securities Act 1933, as amended. |