Aviva plc – Tender Offer & Vote on Preference Shares

Aviva plc

(incorporated in England with limited liability, registered number 02468686)

NOTICE OF INVITATIONS TO HOLDERS TO TENDER FOR PURCHASE FOR CASH AND TO VOTE ON RESOLUTIONS IN RELATION TO THE REDUCTION OF CAPITAL IN RESPECT OF THE OUTSTANDING £100,000,000 8.375 PER CENT. CUMULATIVE IRREDEEMABLE PREFERENCE SHARES AND THE £100,000,000 8.750 PER CENT. CUMULATIVE IRREDEEMABLE PREFERENCE SHARES ISSUED BY AVIVA PLC AND, IN THE EVENT THE RESOLUTIONS ARE PASSED AND THE REDUCTION OF CAPITAL IS IMPLEMENTED, NOTICE OF INTENTION TO CANCEL LISTING

Aviva plc (the “Issuer“) has today announced that it is seeking the approval of shareholders for the cancellation of both: (i) the £100,000,000 8.375 per cent. cumulative irredeemable preference shares (ISIN: GB0002114154) (the “8.375% Preference Shares“); and (ii) the £100,000,000 8.750 per cent. cumulative irredeemable preference shares (ISIN: GB0002124963) (the “8.750% Preference Shares“, and together with the 8.375% Preference Shares, the “Preference Shares“) (the “Cancellation“). If successful, the Cancellation would have the effect of retiring 100% of the Preference Shares.

In parallel, the Issuer has invited eligible holders of Preference Shares to tender any or all of their Preference Shares for purchase by Jefferies International Limited (the “Offeror“) for cash subject to certain offer restrictions as contained in the section entitled “Offer and Distribution Restrictions” of the tender offer memorandum dated 11 March 2025 (the “Tender Offer Memorandum“) (the “Tender Offer“, together with the Cancellation, the “Transactions“).

The Tender Offer is made on the terms of, and subject to the conditions contained in, the Tender Offer Memorandum, copies of which may be obtained by Preference Shareholders, subject to certain distribution restrictions set out below and as more fully described in the Tender Offer Memorandum, from Computershare Investor Services PLC Limited as receiving agent (the “Receiving Agent“) and at https://clients.dfkingltd.com/Aviva.

This announcement is to be read together with: (i) the circular to the shareholders of the Issuer dated 11 March 2025 (the “Shareholder Circular“) in respect of a general meeting of the Issuer to consider and, if thought fit, pass special resolutions proposing (a) the Cancellation (the “Cancellation Resolution“); (b) the payment of a special dividend of £0.44 for each 8.375% Preference Share (the “8.375% Special Dividend“), a special dividend of £0.50 for each 8.750% Preference Share (the “8.750% Special Dividend“) and a voting fee of £0.02 per Preference Share paid to eligible holders of Preference Shares (the “Special Dividend Resolution“); and (c) the Tender Offer (the “Tender Offer Resolution“); (ii) the circular dated 11 March 2025 in respect of an advisory meeting of the Preference Shareholders (the “Advisory Vote Circular“) to consider and vote on the proposed Cancellation on an advisory basis (the “Advisory Vote Resolution“); and (iii) the Tender Offer Memorandum.

Alongside the Transactions, the board of General Accident plc (“GA“), a subsidiary of the Issuer wholly owned by the Issuer’s Group, is also seeking to undertake a similar transaction (the “GA Transaction“) for the cancellation and tender offer of GA’s 7.875% cumulative irredeemable preference shares of £1 each (the “7.875% GA Preference Shares“) and 8.875% cumulative irredeemable preference shares of £1 each (the “8.875% GA Preference Shares” and, together with the 7.875% GA Preference Shares, the “GA Preference Shares“).

A copy of the Shareholder Circular will also be submitted to the National Storage Mechanism, along with the Advisory Vote Circular and the accompanying proxy forms, and will shortly be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

Capitalised terms used but not defined herein have the meanings given to them in the Tender Offer Memorandum, the Advisory Vote Circular and/or the Shareholder Circular.

RATIONALE FOR THE TRANSACTIONS AND THE GENERAL MEETING

As further detailed in the Shareholder Circular, the Board of the Issuer considers that the Cancellation and the Tender Offer are the best structure to deliver a successful outcome for all shareholders. The Letter from the Chair in the Shareholder Circular provides a summary of the key considerations behind these proposals, including that:

• The Issuer’s Preference Shares were issued in support of the requirement for financial firms to maintain a minimum level of capital reserves that were designed to absorb losses in times of financial stress while protecting policyholders and enabling the financial institution to continue as a viable business. Since the Preference Shares were issued in 1992, the rules which stipulate the requirements for eligible capital issuance have changed and, as a result, the Preference Shares will cease to provide any capital benefit for the Group with effect from 1 January 2026.

• As a result, the Board has determined that the Preference Shares represent an inefficient form of funding which no longer serves the purpose for which they were intended. Accordingly, the Issuer is proposing steps to remove as many of the Preference Shares as possible.

• The Issuer will not implement the proposed Cancellation if it does not receive sufficient support for the Cancellation from its Preference Shareholders on a standalone basis at an Advisory Vote Meeting (see “Advisory Vote Meeting” section below).

• The Board believes the Transactions represent a fair and compelling proposition for Preference Shareholders by offering liquidity at a premium to market prices in return for the Preference Shares. In determining the pricing offered to Preference Shareholders, the Issuer has taken into account: (i) the current secondary market pricing levels for the Preference Shares, in line with the commitments made in March 2018 only to take action on the Preference Shares after taking into account the fair market value of the Preference Shares at the relevant time; (ii) recent precedent transactions which have sought to cancel and/or repurchase preference shares issued by other companies; and (iii) the limited future utility of the Preference Shares to support the Group’s capital structure, in order to ensure that the consideration offered under the Transactions seeks to compensate Preference Shareholders for the surrender of their shares.

CANCELLATION AND TENDER OFFER

The Issuer is convening a general meeting (the “General Meeting“) to vote on the Cancellation Resolution which, if passed, will allow the Issuer to cancel all of the Preference Shares and implement the return of capital to Preference Shareholders. The Issuer will also invite holders of its ordinary shares to vote on special resolutions to approve: (i) the Special Dividend Resolution; and (ii) the Tender Offer Resolution. The Special Dividend Resolution and the Cancellation Resolution (together the “Capital Reduction Resolutions“) are inter-conditional.

If the Capital Reduction Resolutions are passed at the General Meeting and the other conditions to the implementation of the Cancellation are met, no Preference Shares will be accepted for purchase pursuant to the Tender Offer. The following tables summarise the consideration which is being offered to Preference Shareholders of the Issuer on a series-by-series basis.

8.375% Preference Shares

Cancellation		Tender Offer
8.375% Cancellation Amount of £1.452 per 8.375% Preference Share (being the 8.375% Cancellation Price together with the 8.375% Accrued Dividend Amount)		8.375% Tender Offer Consideration of £1.448 per 8.375% Preference Share (being the 8.375% Tender Offer Price together with the 8.375% Accrued Dividend Amount)
8.375% Cancellation Price1	8.375% Accrued Dividend Amount2	8.375% Tender Offer Price3	8.375% Accrued Dividend Amount4
£1 per 8.375% Preference Share plus a Special Dividend of £0.44 per 8.375% Preference Share(The 8.375% Cancellation Price is the same amount as the 8.375% Tender Offer Price, as further described herein.)	1.2p per 8.375% Preference Share(As the Cancellation and Tender Offer have different settlement dates, the 8.375% Accrued Dividend Amount will differ depending on whether the Cancellation or Tender Offer is implemented.)	£1.44 per 8.375% Preference Share	0.8p per 8.375% Preference Share(As the Cancellation and Tender Offer have different settlement dates, the 8.375% Accrued Dividend Amount will differ depending on whether the Cancellation or Tender Offer is implemented.)

8.750% Preference Shares

Cancellation		Tender Offer
8.750% Cancellation Amount of £1.534 per 8.750% Preference Share (being the 8.750% Cancellation Price together with the 8.750% Accrued Dividend Amount)		8.750% Tender Offer Consideration of £1.529 per 8.750% Preference Share (being the 8.750% Tender Offer Price together with the 8.750% Accrued Dividend Amount)
8.750% Cancellation Price5	8.750% Accrued Dividend Amount6	8.750% Tender Offer Price7	8.750% Accrued Dividend Amount8
£1 per 8.750% Preference Share plus a Special Dividend of £0.50 per 8.750% Preference Share(The 8.750% Cancellation Price is the same amount as the 8.750% Tender Offer Price, as further described herein.)	3.4p per 8.750% Preference Share (As the Cancellation and Tender Offer have different settlement dates, the 8.750% Accrued Dividend Amount will differ depending on whether the Cancellation or Tender Offer is implemented.)	£1.50 per 8.750% Preference Share	2.9p per 8.750% Preference Share(As the Cancellation and Tender Offer have different settlement dates, the 8.750% Accrued Dividend Amount will differ depending on whether the Cancellation or Tender Offer is implemented.)

ADVISORY VOTE MEETING

In addition to the General Meeting, the Issuer will also convene a separate meeting of the Preference Shareholders (the “Advisory Vote Meeting“) on an advisory basis to consider and vote on the proposed Cancellation (the “Advisory Vote Resolution“). The Advisory Vote Meeting will take place before the General Meeting and the Cancellation Resolution is conditional on the passing of the Advisory Vote Resolution. If the Advisory Vote Resolution is not passed, the Cancellation Resolution will not be capable of passing at the General Meeting and will be withdrawn (and likewise the Special Dividend Resolution will be withdrawn), and the Cancellation will not be implemented. The Shareholder Circular and the Advisory Vote Circular contain further information regarding the General Meeting, the Advisory Vote Meeting (together with the General Meeting, the “Meetings“), the Capital Reduction Resolutions, the Advisory Vote Resolution and the proposed Cancellation.

In addition to the Cancellation Amount, if both the Advisory Vote Resolution and the Capital Reduction Resolutions are passed and the Cancellation is implemented, any Preference Shareholder who either (a) validly tenders its Preference Shares for purchase pursuant to the Tender Offer by the Relevant Expiration Deadline by way of the relevant Tender Instructions (Option 1) (as defined in the Tender Offer Memorandum)  or (b)  appoints the Chair as its proxy under a Voting Only Instruction (Option 2) (as defined in the Tender Offer Memorandum) by the Proxy Deadline in accordance with the procedures set out in the Shareholder Circular (regardless of whether the votes are in favour or against), will be eligible to receive a voting fee of £0.02 for each Preference Share (being 2.0 per cent. of the nominal value of each Preference Share) (the “Voting Fee“) validly tendered or in respect of which such Voting Only Instructions (Option 2) are submitted. The Voting Fee will be voted on by holders of the Ordinary Shares as part of the Special Dividend Resolution.

A Preference Shareholder participating in the Meetings by any other means shall not be entitled to the Voting Fee irrespective of whether they vote in favour of the relevant resolutions. For example, any Preference Shareholder who attends the Meetings in person or via the Virtual Meeting Platform or makes other arrangements to be represented and vote at the Meetings, other than by way of the relevant Tender Instructions (Option 1) or by appointing the Chair as its proxy under a Voting Only Instruction (Option 2), will not be eligible to receive the Voting Fee, irrespective of whether such Preference Shareholder had already delivered a Tender Instruction (Option 1) or a Voting Only Instruction (Option 2) or made such other arrangements by the Relevant Expiration Deadline or the Proxy Deadline.

If the Advisory Vote Resolution and the Capital Reduction Resolutions are not passed at the Meetings, the Offeror may still accept valid tenders of Preference Shares pursuant to the Tender Offer provided that the Tender Offer Resolution has passed at the General Meeting. For the avoidance of doubt, no Voting Fee will be paid to any Preference Shareholders in this event.

If: (i) the Advisory Vote Resolution is passed at the Advisory Vote Meeting; and (ii) the Capital Reduction Resolutions are passed at the General Meeting and the Cancellation is implemented, the Issuer will not proceed with the Tender Offer and the Offeror will not purchase any of the Preference Shares which have been validly tendered. Instead, all tendered Preference Shares (together with all other Preference Shares) will be cancelled by the Issuer pursuant to the Cancellation and the Preference Shareholders will receive the Cancellation Amount on the Cancellation Settlement Date. For the avoidance of doubt, in no circumstances will a Preference Shareholder receive both the Tender Offer Consideration and the Cancellation Amount.

For further information on the Meetings, the Advisory Vote Resolution and the Capital Reduction Resolutions, see the Shareholder Circular, the Advisory Vote Circular and the Tender Offer Memorandum.

Neither the Issuer nor the Offeror is under any obligation to accept, nor will they have any liability to any person for non-acceptance of, any tender of Preference Shares for purchase pursuant to the Tender Offer. Please see the section of the Tender Offer Memorandum entitled “Terms and Conditions of the Tender Offer” for more information regarding the Tender Offer.

VOTING BY WAY OF TENDER INSTRUCTION

The submission by or on behalf of a Preference Shareholder of a Tender Instruction (Option 1) pursuant to the Tender Offer will also constitute such Preference Shareholder’s instructions to appoint the Chair as such Preference Shareholder’s proxy to attend the Meetings and vote in respect of such tendered Preference Shares in favour of the Advisory Vote Resolution and the Cancellation Resolution. For further information, see the section of the Tender Offer Memorandum entitled “Terms and Conditions of the Tender Offer – Voting by way of Tender Instruction (Option 1)“.

SUMMARY OF OPTIONS AND POTENTIAL OUTCOMES FOR PREFERENCE SHAREHOLDERS

You have the option to:

(A)  tender your Preference Shares for purchase (and automatically appoint the Chair as your proxy to vote in favour of the proposed Advisory Vote Resolution and the Cancellation Resolution) (Tender Instruction (Option 1)); or

(B)  attend and/or vote on the proposed Advisory Vote Resolution and the Cancellation Resolution without tendering your Preference Shares for purchase (Voting Only Instruction (Option 2) or Voting Only Instruction (Option 3)); or

(C) take no action.

Preference Shareholders may not select more than one option in respect of the same Preference Share. See the section of the Tender Offer Memorandum headed “Terms and Conditions of the Tender Offer – Multiple or conflicting instructions” for more information.

To assist with your decision, a summary of the potential outcomes is set out in the following tables.

If the Advisory Vote Resolution and Capital Reduction Resolutions are passed and the Cancellation is implemented, then you will receive:

8.375% PREFERENCE SHARES

DID YOU VOTE? (either by tendering your 8.375% Preference Shares in the Tender Offer9, or by otherwise appointing the Chair as your proxy to vote on your behalf under the Voting Only Instruction (Option 2)10)	8.375% CANCELLATION PRICE11	8.375% ACCRUED DIVIDEND AMOUNT12	VOTING FEE13
			(expressed as a percentage of the nominal value of each Preference Share)	(expressed as an amount)
YES	£1 per 8.375% Preference Share plus a Special Dividend of £0.44 per 8.375% Preference Share	1.2p per 8.375% Preference Share	2% per 8.375% Preference Share	£0.02 per8.375% Preference Share
NO	£1 per 8.375% Preference Share plus a Special Dividend of £0.44 per 8.375% Preference Share	1.2p per 8.375% Preference Share	0.00%	£0

8.750% PREFERENCE SHARES

DID YOU VOTE? (either by tendering your 8.750% Preference Shares in the Tender Offer14, or by otherwise appointing the Chair as your proxy to vote on your behalf under the Voting Only Instruction (Option 2)15)	8.750% CANCELLATION PRICE16	8.750% ACCRUED DIVIDEND AMOUNT17	VOTING FEE18
			(expressed as a percentage of the nominal value of each Preference Share)	(expressed as an amount)
YES	£1 per 8.750% Preference Share plus a Special Dividend of £0.50 per 8.750% Preference Share	3.4p per 8.750% Preference Share	2% per 8.750% Preference Share	£0.02 per8.750% Preference Share
NO	£1 per 8.750% Preference Share plus a Special Dividend of £0.50 per 8.750% Preference Share	3.4p per 8.750% Preference Share	0.00%	£0

If either the Advisory Vote Resolution or the Capital Reduction Resolutions are not passed and the Cancellation is not implemented, then provided the Tender Offer Resolution has passed and the Offeror accepts the tendered Preference Shares, you will receive:

8.375% PREFERENCE SHARES

DID YOU TENDER?	8.375% TENDER OFFER PRICE19	8.375% ACCRUED DIVIDEND AMOUNT20	VOTING FEE
YES	£1.44 per 8.375% Preference Share	0.8p per 8.375% Preference Share	NO VOTING FEE WILL BE PAID
NO	No purchase by the Offeror pursuant to the Tender Offer.

8.750% PREFERENCE SHARES

DID YOU TENDER?	8.750% TENDER OFFER PRICE21	8.750% ACCRUED DIVIDEND AMOUNT22	VOTING FEE
YES	£1.50 per 8.750% Preference Share	2.9p per 8.750% Preference Share	NO VOTING FEE WILL BE PAID
NO	No purchase by the Offeror pursuant to the Tender Offer.

HOW TO PARTICIPATE IN THE TENDER OFFER

The procedures for participating in the Tender Offer differ for Preference Shareholders who hold their Preference Shares in CREST and Preference Shareholders who hold their Preference Shares in certificated form outside CREST. For further information and instructions on participating in the Tender Offer, please see the section of the Tender Offer Memorandum entitled “Procedures for Participating in the Tender Offer and the Meetings“.

Any Preference Shareholder who does not wish to participate in the Tender Offer or the Meetings does not need to take any action. However, if: (i) the Advisory Vote Resolution is passed at the Advisory Vote Meeting and (ii) the Capital Reduction Resolutions are passed at the General Meeting and the Cancellation is implemented, all Preference Shares (regardless of whether a Preference Shareholder participated in the Tender Offer or voted in the Meetings) will be cancelled and only those Preference Shareholders who either validly tendered their Preference Shares (Option 1) or validly submitted Voting Only Instructions (Option 2) will be eligible to receive the Voting Fee.

Preference Shareholders are urged to read the Tender Offer Memorandum, the Shareholder Circular and Advisory Vote Circular (each available online at https://clients.dfkingltd.com/Aviva) before deciding whether or not to participate in the Tender Offer or vote in the Meetings.

Preference Shareholders may not submit both a Tender Instruction (Option 1) and a Voting Only Instruction (Option 2) or Voting Only Instruction (Option 3) in respect of the same Preference Shares. See the section of the Tender Offer Memorandum entitled “Terms and Conditions of the Tender Offer – Multiple or conflicting instructions” for more information.

Before making any decisions in respect of the Tender Offer, Preference Shareholders should carefully consider all of the information contained in the Tender Offer Memorandum, including the section entitled “Risk Factors and Other Considerations relating to the Tender Offer and the Cancellation“.

EXPECTED TIMETABLE

The Issuer currently expects the Tender Offer, the Advisory Vote Meeting, the General Meeting and, if the Advisory Vote Resolution and Capital Reduction Resolutions are passed, the Cancellation to proceed on the following timetable. However, the times and dates in the table are indicative only, and subject to change. The Issuer will announce any changes to the timetable as soon as is reasonably practicable