Ayud board OKs deals with Allianz to enlarge market share

The board of SET-listed Sri Ayudhya Capital Plc (Ayud) has approved share-swap and cash deals worth as much as 7.75 billion baht with Allianz.

Ayud’s wholly owned subsidiary Sri Ayudhya General Insurance (SAGI) will acquire the entire stake in Allianz General Insurance, with the German insurer swapping Allianz Ayudhya Assurance’s shares and launching a voluntary partial tender offer for Ayud’s.

The share-swap and cash deals are aimed at creating synergy for the insurers and winning a larger slice of the Thai insurance market.

“The term ‘entire business’ includes all of [Allianz General Insurance’s] assets, liabilities, employees, representatives, agents, accounts receivable, accounts payable, non-life insurance reserves, contracts and insurance policies,” Ayud said in a filing with the Stock Exchange of Thailand.

The value of the entire business transfer is 748.8 million baht.

Ayud’s board of directors also approved the company’s purchase of an additional 34.8 million ordinary shares in Allianz Ayudhya Assurance from Allianz SE and CPRN Thailand Ltd (CPRNT), totalling 3.97 billion baht.

To facilitate the deal, Ayud will raise its registered capital from 375 million baht to 463.5 million by issuing 88.47 million newly issued ordinary shares with a par value of one baht each and allocate them to be offered to Allianz SE and CPRNT at a price of 53.32 baht a share.

CPRNT is an affiliate of Allianz, which directly and indirectly owns companies that in turn hold a 30% stake in CPRNT.

“CPRNT will pay for the [14 million] newly issued ordinary shares in cash and [Ayud] will use the proceeds derived from this portion of capital increase to subscribe to newly issued ordinary shares in SAGI in order to provide SAGI with funds for the acceptance of the entire business transfer,” Ayud said.

Ayud will allocate 74.43 million newly issued ordinary shares to be offered to Allianz SE and CPRNT for their consideration in purchasing shares of Allianz Ayudhya Assurance.

Ayud has also granted its consent for Allianz SE and its affiliate to make a voluntary partial tender offer for 56.93 million shares, representing 19.37% of total issued shares, at a price of 53.32 baht a share.

SAGI’s name will be changed to Allianz Ayudhya General Insurance Plc once the acquisition is completed.

Allianz SE and Ayud late last year announced that they had entered into agreements worth a combined 5.15 billion baht to swap Allianz Ayudhya Assurance shares for Ayud shares and let Ayud’s wholly owned subsidiary SAGI acquire the entirety of Allianz General Insurance.

At Ayud’s extraordinary shareholder meeting in January, 67.7% of attending shareholders approved the acquisition plan, below the 75% required minimum.

AYUD shares closed yesterday on the SET at 42.25 baht, up 3.50 baht, in trade worth 66.4 million baht.