RSA receives revised offer for company from Zurich, open to passing along offer to RSA shareholders

RSA Insurance Group plc’s Board of Directors has announced its willingness to recommend to shareholders an offer at the level of Zurich Insurance Group’s revised all-cash offer for RSA at 550 pence per ordinary RSA share.

The recommendation of the “Possible Offer to RSA shareholders [is] subject to the satisfactory resolution of the other terms of the offer,” notes a statement Tuesday from RSA. Under the terms of the proposal, the statement continues, “RSA ordinary shareholders retain the right to receive the 3.5 pence interim dividend announced by RSA on 6 August 2015. The Possible Offer is conditional on, amongst other things, due diligence and the recommendation of the Board.”

The Board is currently in discussions with Zurich-based Zurich in relation to these terms.

Zurich, for its part, is required to either announce by 5.00 pm on August 25, 2015 a firm intention to make an offer in accordance with Rule 2.7 of the City Code on Takeovers and Mergers or announce that it does not intend to make an offer, RSA reports. But RSA agreed to an extension of the relevant deadline under Rule 2.6(c) of the Code until 5 pm on September 22, 2015. At RSA’s request, the deadline may be extended further with the consent of the Takeover Panel.

The “announcement is not an announcement of a firm intention to make an offer under Rule 2.7 of the Code and there can be no certainty that an offer will be made,” the RSA statement adds.

Zurich initially reported in late July that the company is evaluating a potential offer for RSA.

As a multi-line insurer that serves customers in global and local markets, Zurich provides a wide range of general insurance and life insurance products and services to businesses and individuals in more than 170 countries. RSA is a multinational quoted insurance group with operations in the United Kingdom, Scandinavia, Canada, Ireland, Asia and the Middle East, Latin America and Central and Eastern Europe.

Some recent large mergers and acquisitions have included Chubb Corporation’s planned merger with ACE Limited for an estimated US$28.3 billion; XL Group Plc’s acquisition of Catlin Group Ltd. for an estimated US$.1 billion, and Toronto-based Fairfax Financial Holdings Ltd.’s completion of its cash tender offer to shareholders of Brit Plc.