COMMERCIAL South British Bid For Australian Company

Press, Volume CVII, Issue 31564, 29 December 1967, Page 10

COMMERCIAL South British Bid For Australian Company

(N.Z. Press Association— Copyright) SYDNEY, December 28. South British Insurance Company, Ltd, is making an entry into the Australian life assurance field with a $1,499,884 cash take-over offer for Australasian Capital Assurances, Ltd.

To date South British has confined its activities to fire, accident and marine insurance underwriting, while Australasian Capital Assurances specialises in life business.

South British is offering 4285 c a share for each of the 5960 SI ordinary shares, 4265 c a share for the 14,185 80c paid ordinary shares, 4245 c for each of the 270 $1 preferance shares, and 4225 c for each of the 14,865 80c paid preference shares. The directors of Australasian Capital Assurances—known as Australasian Catholic Assurance Company, Ltd, from its formation in 1921 until its name was changed to the present form in Septeihher, 1964—are unanimously recommending acceeptance of the offer. Recent Sales The take-over schedule shows two big parcels of A.C.A. shares were recently sold at levels sharply below the offer price. In the six months to December 7, some 5590 ordinary 80c paid shares were sold for 400 c each.

This represented 39.4 per cent of the partly-paid ordinary capital, and yielded $22,360. In the terms of the South British offer, these shares are now worth $238,414.

A parcel of 3793 80c paid preference shares, representing 25.5 per cent of lhe partly-paid preference capital, was also sold at 350 c a share. The shares realised $13,272 against their value of $160,212 in terms of the offer.

A.C.A.’s managing director (Mr W. J. Dowd) said last night the shares represented a holding in A.C.A. by one of its subsidiaries and had Io be sold in compliance with the Companies Act. He described the sale as a “very special transaction” and revealed that the shares had been sold to existing shareholders in proportion to the number of shares they already held. The sale price of 400 c for the 80c paid ordinary shares and 350 c for the 80c paid preference shares had been considered realistic in the light of circumstances before receipt of the take-over offer. But, he said, the price was difficult to assess because A.C.A. shares were not listed on the national sharemarkets and did not possess a readymade market. Recommendation The directors said in a letter accompanying the takeover offer that they had given the South British offer “very earnest consideration, and have come to the conclusion that what is proposed will be to the advantage of shareholders, policyholders and staff.

“South British is incorporated in New Zealand, but has had very extensive operations in Australia for many years. The proposal envisages the A.C.A. organisation will be the instrument through which South British will provide its

clients with a life insurance service in addition to its present ones. . . .” Directors also state It will provide A.C.A. with the opportunity to continue and better its life business, and will be mutually advantageous to both companies. Conditions The offer is subject to 9(1 per cent acceptance (not less than 18,131 ordinary shares and 13,622 preference shares) and will remain open until March 22, 1968. South British does not at present hold any shares in A.C.A. However, the offer is already well on the way to success, since the directors have agreed to accept in respect of their own holdings, which amount to 88 per cent of the $1 ordinary shares, 18.5 per cent of the 80c paid ordinary shares, and 16.6 per cent of the 80c paid preference shares. Year’s Results A.C.A.’s chairman (Mr D. .1. Mooney) is the biggest shareholder, with 5000 ordinary $1 shares worth $214,250 in the terms of the offer, 1819 ordinary 80c paid shares, worth $77,580 and, 1969 preference 80c paid shares, worth $83,190. This places a value of $375,000 on the chairmans shares if the offer succeeds. Results of A.C.A. for 196667 have not yet been released, but in the year to June 30, 1966, the company increased its new life assurance business by 17 per cent to $7,561,258. Total assets rose from $14.85m to $15.12m.