Fairfax Financial and Allied World Provide Update on Merger Transaction
TORONTO, Ontario and ZUG, Switzerland–(BUSINESS WIRE)–
(Unless otherwise provided herein, all dollar amounts in this
announcement are expressed in U.S. dollars)
Fairfax Financial Holdings Limited (“Fairfax”) (TSX:FFH)(TSX:FFH.U) and
Allied World Assurance Company Holdings, AG (“Allied World”) (NYSE:AWH)
today announced that they have agreed to extend to March 10, 2017 the
deadline by which Fairfax has the option to increase the cash
consideration, and correspondingly reduce the “Fixed Value Stock
Consideration” under the terms of the previously announced definitive
merger agreement entered into by Fairfax and Allied World on December
18, 2016, pursuant to which Fairfax agreed to make an exchange offer to
acquire all of Allied World’s outstanding ordinary shares.
In connection with the transaction, Allied World will hold a Special
Shareholder Meeting on Wednesday, March 22, 2017 where holders of
ordinary shares will be asked to consider and vote on: (i) a proposal to
amend Articles 8 and 14 of Allied World’s Articles of Association to
remove the limitation on the voting rights of a holder of 10% or more of
its ordinary shares; and (ii) a proposal for Allied World to pay, as
soon as possible after the closing of the exchange offer, a special
dividend of $5.00 per ordinary share to holders of outstanding ordinary
shares as of immediately prior to the closing of the exchange offer and
to forgo the $0.26 March 2017 quarterly dividend.
Fairfax is a holding company which, through its subsidiaries, is engaged
in property and casualty insurance and reinsurance and investment
About Allied World
Allied World, through its subsidiaries and brand known as Allied World,
is a global provider of innovative property, casualty and specialty
insurance and reinsurance solutions. Allied World offers superior client
service through a global network of offices and branches. All of Allied
World’s rated insurance and reinsurance subsidiaries are rated A by A.M.
Best Company, A by Standard & Poor’s, and A2 by Moody’s, and our Lloyd’s
Syndicate 2232 is rated A+ by Standard & Poor’s and AA- by Fitch.
IMPORTANT INFORMATION AND WHERE TO FIND IT
This communication is for informational purposes only and does not
constitute or form part of an offer to sell or exchange or the
solicitation of an offer to buy, exchange or subscribe to any
securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation, sale or exchange would
be unlawful prior to registration or qualification under the securities
laws of any such jurisdiction. This communication is not an offer of
securities for sale into the United States. No offering of securities
shall be made in the United States except pursuant to registration under
the U.S. Securities Act of 1933, or an exemption therefrom.
In connection with the exchange offer for all of the outstanding
registered ordinary shares of Allied World, Fairfax has filed a
registration statement on Form F-4, which includes a preliminary
prospectus, and expects to file a Tender Offer statement on Schedule TO
(the “Schedule TO”), and may file amendments thereto, and soon
thereafter Allied World will file a Solicitation / Recommendation
Statement on Schedule 14D-9 with respect to the exchange offer and may
file amendments thereto. The exchange offer has not yet commenced. The
exchange offer will be made exclusively by means of, and subject to, the
terms and conditions set out in, an offer document containing and
setting out the terms and conditions of the offer and a letter of
transmittal to be delivered to Allied World, filed with the United
States Securities and Exchange Commission (the “SEC”) and mailed to
Allied World shareholders. The exchange offer will be made by Fairfax or
an affiliate of Fairfax and not by any other person.
The release, publication or distribution of this communication in
certain jurisdictions may be restricted by law and therefore persons in
such jurisdictions into which this communication is released, published
or distributed should inform themselves about and observe such
SHAREHOLDERS OF ALLIED WORLD ARE URGED TO READ ANY DOCUMENTS REGARDING
THE EXCHANGE OFFER CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME
AVAILABLE (INCLUDING THE EXHIBITS THERETO) AS THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE EXCHANGE OFFER.
The registration statement, the Schedule TO and other related documents
in relation to the exchange offer, as well as Fairfax’s other public
filings with the SEC, may be obtained without charge at the SEC’s
after they have been filed. Any materials filed with the SEC may also be
obtained without charge at Fairfax’s website, www.fairfax.ca.
This material is not a substitute for the registration statement, the
Schedule TO and other related documents in relation to the exchange
offer that will be filed with the SEC or sent to shareholders in
connection with the proposed transactions.
Any proxy statement and any other relevant documents filed by Allied
World with the SEC, as well as any amendments or supplements to those
documents and Allied World’s other public filings with the SEC, may be
obtained without charge at the SEC’s website, www.sec.gov,
after they have been filed. Any materials filed with the SEC may also be
obtained without charge at Allied World’s website, www.awac.com.
This communication does not constitute an offer or a solicitation in any
jurisdiction in which such offer or solicitation is unlawful. An offer
will not be made in, nor will deposits be accepted in, any jurisdiction
in which the making or acceptance thereof would not be in compliance
with the laws of such jurisdiction. However, Fairfax may, in its sole
discretion, take such action as it may deem necessary to extend an offer
in any such jurisdiction.
Participants in the Solicitation
Fairfax and Allied World and their respective directors and executive
officers may be deemed to be participants in any solicitation of proxies
from Allied World’s and, if necessary, Fairfax’s shareholders in favour
of the proposed acquisition. Information about Allied World’s directors
and executive officers is available in Allied World’s proxy statement
dated March 10, 2016 for its 2016 Annual General Meeting of
Shareholders. Information about Fairfax’s directors and executive
officers is available in Fairfax’s management proxy circular dated March
11, 2016 for its 2016 Annual General Meeting of Shareholders. Other
information regarding the participants in the proxy solicitation and a
description of their direct and indirect interests, by security holdings
or otherwise, are contained in the definitive proxy statement, the
prospectus and other relevant materials filed with the SEC regarding the
acquisition. Investors should read the definitive proxy statement and
the prospectus carefully before making any voting or investment
Certain statements contained herein may constitute forward-looking
statements within the meaning of applicable Canadian and United States
securities laws and are made pursuant to the “safe harbour” provisions
of the United States Private Securities Litigation Reform Act of 1995.
Such forward-looking statements are subject to known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of Fairfax, Allied World or the combined
company to be materially different from any future results, performance
or achievements expressed or implied by such forward-looking statements.
Such statements reflect the current views of management of Fairfax and
Allied World and are subject to a number of risks and uncertainties.
These statements are based on many assumptions and factors, including
general economic and market conditions, industry conditions, corporate
approvals, regulatory approvals, operational factors and other factors.
Any changes in such assumptions or factors could cause actual results to
differ materially from current expectations. All forward-looking
statements attributable to Fairfax and Allied World, or persons acting
on their behalf, are expressly qualified in their entirety by the
cautionary statements set forth in this paragraph. Undue reliance should
not be placed on such statements, which speak only as of the date they
are made. Such factors include, but are not limited to the risks and
uncertainties described in: (i) Fairfax’s most recently issued Annual
Report which is available at www.fairfax.ca
and in its Supplemental and Base Shelf Prospectus (under “Risk Factors”)
filed with the securities regulatory authorities in Canada, which is
available on SEDAR at www.sedar.com;
and (ii) Allied World’s most recently issued Annual Report filed on Form
10-K, which is available on EDGAR at www.sec.gov.
Each of Fairfax and Allied World disclaims any intention or obligation
to update or revise any forward-looking statements and undertakes no
obligation to release publicly the results of any future revisions to
the forward-looking statements to reflect events or circumstances after
the date hereof or to reflect the occurrence of unanticipated events.
There can be no assurance that the offer and/or the merger will occur or
that the anticipated benefits of the offer and merger will be realized.
The completion of the offer and the merger is subject to various
approvals, including competition, antitrust and insurance regulatory