RSA Insurance Group- Tender Offer and Vote on Preference Shares

12 June 202

RSA Insurance Group Limited

(a private limited company incorporated in England and Wales with registered number 02339826)

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 £125,000,000 7.375 PER CENT. CUMULATIVE IRREDEEMABLE PREFERENCE SHARES ISSUED BY RSA INSURANCE GROUP LIMITED AND, IN THE EVENT THE RESOLUTIONS ARE PASSED AND THE REDUCTION OF CAPITAL IS IMPLEMENTED, NOTICE OF INTENTION TO CANCEL LISTING

2283485 Alberta Ltd. (the “Offeror“) has today invited eligible holders of the £125,000,000 7.375 per cent. cumulative irredeemable preference shares of RSA Insurance Group Limited (the “Issuer“) (the “Preference Shares“) to tender any and all of their Preference Shares for purchase by the Offeror for cash subject to certain offer restrictions as contained in the section “Offer and Distribution Restrictions” of the tender offer memorandum dated 12 June 2024 (the “Tender Offer Memorandum“) (the “Tender Offer“).

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 Equiniti Limited (the “Receiving Agent“) and at https://www.dfkingltd.com/RSA.

This announcement is to be read together with the Tender Offer Memorandum and the circular to the shareholders of the Issuer dated 12 June 2024 (the “Shareholder Circular“) in respect of a general meeting of the Issuer to consider and, if thought fit, pass special resolutions (the “Resolutions“) proposing (i) the cancellation of all the Preference Shares (the “Preference Share Cancellation“) and (ii) the cancellation of the Issuer’s share premium account (the “Share Premium Cancellation“, and together with the Preference Share Cancellation, the “Reduction of Capital“).

A copy of the Shareholder Circular will also be submitted to the National Storage Mechanism 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.

TENDER OFFER

Pursuant to the Tender Offer, the Offeror invites, subject to the offer and distribution restrictions referred to below and in the section of the Tender Offer Memorandum entitled “Offer and Distribution Restrictions“, all Preference Shareholders to tender their Preference Shares for purchase by the Offeror for cash. The following table sets out certain details of the Tender Offer:

Securities	ISIN	Outstanding nominal amount	Tender Offer Consideration	Amount subject to the Tender Offer
Preference Shares	GB0008631391	£125,000,000	The Tender Offer Price(122% or £1.22 per Preference Share)plus the Accrued Dividend Amount	Any and all

The Tender Offer Consideration comprises a cash amount equal to 122 per cent. or £1.22 for each Preference Share purchased pursuant to the Tender Offer (the “Tender Offer Price“) and the Accrued Dividend Amount (as defined below). The Tender Offer Price has been calculated to include a premium above the prevailing quoted mid-market price for the Preference Shares on the London Stock Exchange (on a ‘clean price’ basis) (as set out in more detail in Question (8) of the section of the Tender Offer Memorandum entitled “Questions and Answers about the Tender Offer and the Resolutions“). The Accrued Dividend Amount is an amount equal to arrears (if any) and accruals of the dividends payable in accordance with the Terms calculated up to and including the Settlement Date in respect of the relevant Preference Shares (the “Accrued Dividend Amount“, and together with the Tender Offer Price, the “Tender Offer Consideration“) as further described in the Tender Offer Memorandum.

The Offeror is not under any obligation to accept, and shall have no 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.

REDUCTION OF CAPITAL

In parallel with the Tender Offer, the Issuer is convening a general meeting (the “General Meeting“) to vote on the Resolutions which, if passed, will allow the Issuer to cancel all of the Preference Shares and implement the return of capital to Preference Shareholders in a cash amount equal to 122 per cent., or £1.22 for each Preference Share (the “Cancellation Price“), plus the Accrued Dividend Amount (together with the Cancellation Price, the “Cancellation Amount“). The Cancellation Price will be equal to the Tender Offer Price.

Implementation of the Reduction of Capital is also subject to final approval by the Prudential Regulation Authority (the “PRA“). The Issuer expects to receive such final approval from the PRA upon the passing of the Resolutions.

If the Resolutions are passed at the General Meeting and the Reduction of Capital is implemented, the Offeror will not purchase any Preference Shares pursuant to the Tender Offer. Instead, all tendered Preference Shares (together with all other Preference Shares) will be cancelled by the Issuer pursuant to the Reduction of Capital, the Preference Shareholders will receive the Cancellation Amount and the Voting Fee (if applicable) on the Settlement Date, and the Issuer will arrange for the listing of the Preference Shares on the Official List of the United Kingdom Financial Conduct Authority and the admission of the Preference Shares to trading on the Main Market of the London Stock Exchange plc to be cancelled. The Cancellation Price will be equal to the Tender Offer Price. 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 General Meeting, the Resolutions and the proposed Reduction of Capital, see the Tender Offer Memorandum and the Shareholder Circular.

RATIONALE FOR THE TENDER OFFER AND THE GENERAL MEETING

The Offeror is conducting the Tender Offer, and the Issuer is convening the General Meeting, as part of the process to manage the Issuer’s capital structure, to achieve, among other things, a removal of perpetual instruments that will lose their regulatory capital eligibility in 2026, while also providing liquidity to Preference Shareholders. See Question (7) in the section of the Tender Offer Memorandum entitled “Questions and Answers about the Tender Offer and the Resolutions” for further information.

VOTING BY WAY OF TENDER INSTRUCTION

The submission by or on behalf of a Preference Shareholder of a Tender Instruction (as defined in the Tender Offer Memorandum) pursuant to the Tender Offer will automatically include such Preference Shareholder’s instructions to appoint the Chair as its proxy to attend the General Meeting and vote in respect of such tendered Preference Shares in favour of the Resolutions. 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”.

VOTING FEE

In addition to the Cancellation Amount, if the Resolutions are passed and the Reduction of Capital is implemented, Preference Shareholders will be eligible to receive a Voting Fee in the following circumstances: any Preference Shareholder who either (a) validly tenders its Preference Shares for purchase pursuant to the Tender Offer by the Retail Expiration Deadline in respect of Retail Investors or the Institutional Expiration Deadline in respect of Institutional Investors or (b) submits a Voting Only Instruction (Option 2) 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 the voting fee (the “Voting Fee“) of 2.00 per cent., or £0.02 for each Preference Share validly tendered or in respect of which such Voting Only Instruction (Option 2) are submitted. A Preference Shareholder participating in the General Meeting by any other means shall NOT be entitled to the Voting Fee.

If the Resolutions are not passed at the General Meeting, the Offeror may still accept valid tenders of Preference Shares pursuant to the Tender Offer, as further described herein. For the avoidance of doubt, no Voting Fee will be paid to any Preference Shareholders in this event.

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 RESOLUTIONS) OR (B) ATTEND AND/OR VOTE ON THE PROPOSED RESOLUTIONS WITHOUT TENDERING YOUR PREFERENCE SHARES FOR PURCHASE OR (C) TAKE NO ACTION.

TO ASSIST WITH YOUR DECISION, A SUMMARY OF THE POTENTIAL OUTCOMES IS SET OUT BELOW.

IF THE RESOLUTIONS ARE PASSED AND THE REDUCTION OF CAPITAL IS IMPLEMENTED THEN YOU WILL RECEIVE:

DID YOU VOTE?(either by tendering your Preference Shares in the Tender Offer1, or by otherwise appointing the Chair as your proxy to vote on your behalf under the Voting Only Instruction (Option 2)2)	CANCELLATION AMOUNT3		VOTING FEE4
	(expressed as a percentage)	(expressed as an amount)	(expressed as a percentage)	(expressed as an amount)
YES	The Cancellation Price (122%) plus the Accrued Dividend Amount	The Cancellation Price (£1.22 per Preference Share)plus the Accrued Dividend Amount	2.00%	£0.02 per Preference Share
NO	The Cancellation Price (122%)plus the Accrued Dividend Amount	The Cancellation Price( £1.22 per Preference Share)plus the Accrued Dividend Amount	0.00%	£0 per Preference Share

¹               If you tender your Preference Shares in the Tender Offer you will automatically appoint the Chair as your proxy to vote in favour of the Resolutions.

²               To appoint the Chair as your proxy to vote in respect of the Resolutions without tendering your Preference Shares, you should submit a Voting Only Instruction (Option 2) (as defined below) in accordance with the procedures set out in the Shareholder Circular.

³               The Cancellation Amount comprises the Cancellation Price and the Accrued Dividend Amount. The Cancellation Amount will be paid in respect of all Preference Shares, including such Preference Shares validly tendered in the Tender Offer. The Cancellation Price is the same price as the Tender Offer Price, as further described herein. For the avoidance of doubt, in no circumstances will a Preference Shareholder receive both the Tender Offer Consideration and the Cancellation Amount.

⁴               Preference Shareholders who attend the General Meeting in person  or via the Virtual Meeting Platform or appoint someone other than the Chair as their proxy or appoint the Chair as their proxy to attend the General Meeting but withhold its vote will not receive the Voting Fee.

IF THE RESOLUTIONS ARE NOT PASSED AND THE REDUCTION OF CAPITAL IS NOT IMPLEMENTED, THEN, PROVIDED THE OFFEROR ACCEPTS THE TENDERED PREFERENCE SHARES, YOU WILL RECEIVE:

DID YOU TENDER?	TENDER OFFER CONSIDERATION1		VOTING FEE
	(expressed as a percentage)	(expressed as an amount)
YES	The Tender Offer Price (122%)  plus the Accrued Dividend Amount	The Tender Offer Price (£1.22 per Preference Share) plus the Accrued Dividend Amount	No Voting Fee will be paid.
NO	Not Applicable. Preference Shareholders who do not participate in the Tender Offer, or whose Preference Shares are not accepted for purchase by the Offeror, will not have their Preference Shares purchased by the Offeror pursuant to the Tender Offer.

¹               The Tender Offer Consideration comprises the Tender Offer Price and the Accrued Dividend Amount. The Tender Offer Consideration will be paid in respect of Preference Shares validly tendered in the Tender Offer and accepted for purchase. The Tender Offer Price is the same as the Cancellation Price, as further discussed herein. For the avoidance of doubt, in no circumstances will a Preference Shareholder receive both the Tender Offer Consideration and the Cancellation Amount.

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 Shareholders 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 General Meeting“.

A Preference Shareholder who does not wish to participate in the Tender Offer or the General Meeting does not need to take any action. However, if the Resolutions are passed at the General Meeting and the Reduction of Capital is implemented, all Preference Shares will be cancelled. Therefore, Preference Shareholders are urged to read the Tender Offer Memorandum along with the Shareholder Circular carefully before deciding whether or not to participate in the Tender Offer or vote in the General Meeting.

Preference Shareholders may not submit both a Tender Instruction 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 offers” 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“.

THE TENDER OFFER WILL COMMENCE ON 12 JUNE 2024 AND WILL EXPIRE AT (1)  4.00 P.M. (UK TIME) ON 19 JUNE 2024 IN RELATION TO INSTITUTIONAL INVESTORS AND (2) 1.00 P.M. (UK TIME) ON 10 JULY 2024 IN RELATION TO RETAIL INVESTORS, IN EACH CASE, UNLESS AMENDED, EXTENDED, RE-OPENED, WITHDRAWN OR TERMINATED AT THE SOLE AND ABSOLUTE DISCRETION OF THE OFFEROR.

TENDER INSTRUCTIONS, ONCE SUBMITTED, MAY NOT BE WITHDRAWN EXCEPT IN THE LIMITED CIRCUMSTANCES OUTLINED IN THE TENDER OFFER MEMORANDUM UNDER THE HEADING “AMENDMENT AND TERMINATION” IN THE TENDER OFFER MEMORANDUM.

ANY PREFERENCE SHAREHOLDER WHO DOES NOT WISH TO PARTICIPATE IN THE TENDER OFFER BUT WHO WISHES TO BE ELIGIBLE TO RECEIVE THE VOTING FEE MUST VALIDLY SUBMIT A VOTING ONLY INSTRUCTION (OPTION 2) BY 9.00 A.M. (UK TIME) ON 16 JULY 2024.

EXPECTED TIMETABLE

The Offeror and the Issuer currently expect the Tender Offer, the General Meeting and, if the Resolutions are passed, the Reduction of Capital to proceed on the timetable below. However, the times and dates below are indicative only, and subject to change. The Offeror and the Issuer will announce any changes to the timetable.

Events	Expected Times and Dates(All times are UK time)
Commencement of the Tender Offer and Notice of General Meeting	12 June 2024
Announcement of the Tender Offer and the General Meeting by way of announcements via RNS and on the relevant Notifying News Service and made available to Preference Shareholders on https://www.dfkingltd.com/RSA (subject to the offer and distribution restrictions set out in “Offer and Distribution Restrictions“).Tender Offer Memorandum made available to eligible Preference Shareholders on https://www.dfkingltd.com/RSA (subject to the offer and distribution restrictions set out in “Offer and Distribution Restrictions“).
Shareholder Circular (including the Notice of General Meeting) and Paper Instruction Form to be dispatched to Shareholders. The Shareholder Circular will also be made available to Shareholders on https://www.dfkingltd.com/RSA.
Institutional Expiration Deadline	4.00 p.m. on 19 June 2024
Final deadline for receipt by the Receiving Agent of Tender Instructions from Institutional Investors to be eligible to receive the Tender Offer Consideration, if such Preference Shares are accepted for purchase by the Offeror.
Interim Institutional Investors Tender Participation AnnouncementAnnouncement of the percentage of Preference Shares validly tendered by Institutional Investors prior to the Institutional Expiration Deadline.	20 June 2024
Retail Expiration DeadlineFinal deadline for receipt by the Receiving Agent of Tender Instructions from Retail Investors to be eligible to receive the Tender Offer Consideration, if such Preference Shares are accepted for purchase by the Offeror.	1.00 p.m. on 10 July 2024
Tender Offer Record TimeRecord time to determine holdings for valid participation in the Tender Offer.	6.00 p.m. on 10 July 2024
Tender Participation AnnouncementAnnouncement of the percentage of Preference Shares validly tendered pursuant to the Tender Offer.	11 July 2024
Voting Record TimeRecord time to determine holdings for valid participation at the General Meeting.	6.30 p.m. on 12 July 2024
Proxy DeadlineFinal deadline for receipt by the Receiving Agent of a Voting Only Instruction (Option 2) or Voting Only Instruction (Option 3) from Preference Shareholders.	9.00 a.m. on 16 July 2024
General MeetingDate on which the General Meeting will take place to consider and, if thought fit, pass the Resolutions.	9.00 a.m. on 16 July 2024
Results Announcement	16 July 2024
Announcement of:(A)  whether the Resolutions were passed at the General Meeting and:(i)            if passed, whether the Reduction of Capital will be implemented, and (if so) confirmation of the Cancellation Date and the Settlement Date;(ii)           if not passed, the results of the Tender Offer, including announcement of (a) the percentage of Preference Shares validly tendered prior to the Relevant Expiration Deadline; (b) whether the Offeror accepts for purchase any validly tendered Preference Shares and, if so, the number of Preference Shares so accepted for purchase pursuant to the Tender Offer, and confirmation of the Settlement Date; and (c) the aggregate percentage of Preference Shares that will be owned by the Offeror following the Settlement Date; and(B)  the total amount (being the Cancellation Amount plus (for the eligible Preference Shareholders) the Voting Fee, or the Tender Offer Consideration, as applicable) payable in respect of each Preference Share to be cancelled by the Issuer pursuant to the Preference Share Cancellation or purchased by the Offeror pursuant to the Tender Offer, as applicable, and paid to Preference Shareholders on the Settlement Date and a breakdown thereof.
Last day of dealings in, and registration of transfer of, and disablement in CREST of, the Preference Shares, if applicable	17 July 2024
If the Resolutions are passed and the Reduction of Capital implemented, this will be the last date on which the Preference Shares will be traded on the Main Market of London Stock Exchange.
Suspension of listing, if applicableThe expected time on which the Preference Shares will be suspended from trading on the Main Market of London Stock Exchange if the Resolutions are passed.	7.30 a.m. on 18 July 2024
Cancellation Date, if applicableThe date on which the cancellation of the Share Premium and the Preference Shares is expected to take effect by registration at the Registrar of Companies if the Resolutions are passed and the Reduction of Capital is implemented.	18 July 2024
De-listing of the Preference Shares, if applicableIf the Resolutions are passed and the Reduction of Capital implemented, the Issuer intends to apply to the FCA and London Stock Exchange respectively for the listing of the Preference Shares on the Official List to be cancelled and for the Preference Shares to cease to be admitted to trading on the Main Market of the London Stock Exchange.		19 July 2024
Settlement Date		30 July 2024
If the Resolutions are passed and the Reduction of Capital is implemented, this is the expected date of payment of the Cancellation Amount to all Registered Holders and of the Voting Fee to eligible Registered Holders in the manner set out in the Shareholder Circular.Alternatively, if the Resolutions are not passed or the Reduction of Capital is not implemented, this is the expected settlement date of the Tender Offer, including payment of the Tender Offer Consideration to the Registered Holders of such Preference Shares validly tendered and accepted pursuant to the Tender Offer by cheque or CREST credit.