Intact Financial Corporation Announces $1.25 Billion Bought Deal Private Placement of Subscription Receipts to Finance a Portion of the Purchase Price of the Possible Offer for RSA Insurance Group PLC (“RSA”)

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TORONTO, Nov. 12, 2020 (GLOBE NEWSWIRE) -- Further to the announcement on November 5, 2020 relating to the possible offer for RSA by Intact Financial Corporation (TSX: IFC) (“Intact” or the “Company”) and Tryg A/S (together with Intact, the “Consortium”) (the “Transaction”), Intact announced today that it has entered into an agreement with a group of underwriters, led by CIBC Capital Markets and Barclays Capital Canada Inc., pursuant to which the underwriters have agreed to purchase, on a bought deal basis, 9,272,000 subscription receipts of the Company (the “Subscription Receipts”) at a price of $134.50 per Subscription Receipt for gross proceeds of $1.25 billion (the “Offering”). The underwriters intend to arrange for substituted purchasers for the Subscription Receipts. The Subscription Receipts will be offered by way of private placement to accredited investors and other exempt purchasers in all provinces and territories of Canada, The Subscription Receipts will be subject to a four month hold period under applicable securities laws in Canada.

Earlier today, Intact announced that it had entered into subscription agreements with institutional investors for the aggregate issuance of 23.8 million subscription receipts at a price of $134.50 per subscription receipt for gross proceeds of $3.2 billion (the “Cornerstone Equity Financing”). The Offering and Cornerstone Equity Financing together provide Intact with all of the equity financing it would require to fund its share of the purchase price for RSA.

The Transaction would generate significant value through loss ratio and expense ratio improvements across the operations of Intact. The acquisition of RSA’s Canadian operations is expected to drive approximately 75% of the value creation, with UK & International operations accounting for approximately 20% and specialty lines accounting for approximately 5%. Over $250 million of pre-tax annual run rate synergies are expected within 36 months, before any risk selection improvements. Intact intends to apply its expertise in digital, data and AI platforms, pricing and risk selection, claims management, and investment and capital management to RSA’s platform to drive profitability.