PrefSure supportive of parental sale
Australian risk insurer PrefSure Life believes it will be business as usual despite the imminent sale of its South African parent Capital Alliance Holdings to insurance giant Liberty Group.
The board of Capital, which is a major shareholder in PrefSure, accepted an offer from Capital on Wednesday to acquire all the shares in it for an approximate Australian dollar value of $691 million.
Liberty Group is a major player in South Africa and in 2004 had a total embedded value of $3.5 billion with total premium income revenue of $4 billion.
The proposed transaction will be funded from available cash resources and is expected to be classified as a category three transaction for Liberty Life in terms of the Listing Requirements of the Johannesburg Stock Exchange (JSE) and, as such, does not require shareholder approval.
PrefSure Life managing director in Australia, Geoff Black said the deal is positive for the local operations as it will allow the business to draw from a deeper resources base.
“Upon the implementation of the scheme, Capital Alliance will be an integral part of an even larger financial institution. In Australia, PrefSure Life looks forward to being part of that stronger group,” Black said.
The deal is subject to a number of conditions including various regulatory and court approvals and the approval of Capital Alliance shareholders.
The board of Capital Alliance is supportive of the offer and is taking the necessary steps to appoint an independent consultant to advise them on the fairness and reasonableness of the offer.
Subject to obtaining approval it is envisaged that the scheme will be implemented by March 31 2005.
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