Deal Spotlights
The Ardonagh Group’s successful acquisition of PSC Insurance Group by scheme of arrangement
Alcoa’s $3.3 billion acquisition of Alumina – the ultimate scrip deal
ANZ’s acquisition of Suncorp Bank
The Australian Competition Tribunal (Tribunal) authorised Australia and New Zealand Banking Group's (ANZ) proposed acquisition of 100% of the issued share capital in SBGH Limited from Suncorp Group Limited. SBGH owns 100% of the shares of Suncorp-Metway Limited. ANZ had initially sought merger authorisation from the ACCC for the proposed acquisition. The ACCC decided not to grant authorisation and ANZ appealed to the Tribunal.
The Tribunal set aside the ACCC's decision and found the proposed acquisition would not be likely to have the effect of substantially lessening competition in the national home loans market, or local or regional Queensland markets for agribusiness customers and SME customers. Further, the Tribunal was satisfied that the proposed acquisition would be likely to result in a net public benefit.
Ashurst acted for ANZ in this matter.
The acquisition of Alumina by Alcoa was one of the largest deals in 2024 and ultimately fulfilled the long expected outcome of its demerger from Western Mining Corporation, by unifying ownership of the global Alcoa World of Aluminium joint venture which Alcoa controlled. Alcoa announced entry into a conditional share sale agreement with Allan Gray for 19.9% of Alumina shares, alongside entry into an agreement with Alumina.
It was a complex deal, requiring the listing of Alcoa on ASX, and shareholder approval by Alumina shareholders as well as by Alcoa shareholders given the number of Alcoa shares being issued. CITIC Resources' significant shareholding in Alumina and other businesses in the United States created additional regulatory hurdles, and it also obtained shareholder approval to vote in favour of the deal.
Ashurst advised Alcoa in relation to this transaction.
ANZ’s acquisition of Suncorp Bank
Alcoa’s $3.3 billion acquisition of Alumina – the ultimate scrip deal
The Ardonagh Group’s successful acquisition of PSC Insurance Group by scheme of arrangement
The Ardonagh Group's successful $2.3 billion acquisition of PSC Insurance Group (PSC) via a scheme of arrangement exemplified some of the advantages of a scheme versus an off-market takeover bid. This deal demonstrates the attractiveness of a scheme where the bidder intends to make different offers to select shareholders (including key management) and/or plans to implement a concurrent restructure of the target or its assets.
Ashurst advised Envest Group as part of the Ardonagh Group on the $2.3 billion acquisition of PSC Insurance Group Limited by scheme of arrangement and the separation of PSC UK and the ANZ business between Envest and the UK part of the Ardonagh Group.
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Deal summary
On 11 October 2024, The Ardonagh Group (a large independent insurance distribution platform based in the UK), via its bidding vehicle Rosedale BidCo (Ardonagh) acquired PSC (an ASX-listed diversified insurance services company with significant businesses in Australia and the UK) by way of a scheme. The offer price under the scheme was $6.19 per PSC share, which represented a ~27.6% premium to PSC’s undisturbed closing price on the last trading day before market speculation about a potential deal surfaced. PSC shareholders were offered all cash consideration, with the exception of certain directors and senior management personnel, that were offered, in part, shares in an unlisted entity within the Ardonagh corporate group. Amongst other customary terms, the scheme implementation deed (SID) included the following key terms:
In addition to shareholder, court and Australian and UK regulatory approvals, a requirement that 5 PSC directors elected to receive (as a minimum) a specified percentage of the scheme consideration in scrip.
A reverse break fee (of 1%, equal value to the break fee) payable to PSC if the SID was terminated due to a material and unremedied breach by Ardonagh or if the scheme became effective, but Ardonagh did not pay the scheme consideration.
Ardonagh effectively secured a pre-bid stake via a call option over a total of 19.99% of PSC shares in favour of Ardonagh. Those options were exercisable (at a price equivalent to the offer price under the scheme) if a competing bid emerged, and Ardonagh determined that the competing bid was bona fide and could result in the scheme not being implemented.
Immediately following implementation of the scheme, PSC was restructured such that:
PSC’s Australian and New Zealand operations were transferred to its majority owned Australian subsidiary, The Envest Group; and
PSC’s operations in other jurisdictions (including the UK) were transferred to other entities within the UK part of the Ardonagh corporate group.
In addition to shareholder, court and Australian and UK regulatory approvals, a requirement that 5 PSC directors elected to receive (as a minimum) a specified percentage of the scheme consideration in scrip.
A reverse break fee (of 1%, equal value to the break fee) payable to PSC if the SID was terminated due to a material and unremedied breach by Ardonagh or if the scheme became effective, but Ardonagh did not pay the scheme consideration.
Ardonagh effectively secured a pre-bid stake via a call option over a total of 19.99% of PSC shares in favour of Ardonagh. Those options were exercisable (at a price equivalent to the offer price under the scheme) if a competing bid emerged, and Ardonagh determined that the competing bid was bona fide and could result in the scheme not being implemented.
Immediately following implementation of the scheme, PSC was restructured such that:
PSC’s Australian and New Zealand operations were transferred to its majority owned Australian subsidiary, The Envest Group; and
PSC’s operations in other jurisdictions (including the UK) were transferred to other entities within the UK part of the Ardonagh corporate group.
The Ardonagh Group’s successful acquisition of PSC Insurance Group by scheme of arrangement