Insurer’s shareholders raise millions to fund acquisition

Insurer’s shareholders raise millions to fund acquisition

Insurer’s shareholders raise millions to fund acquisition IAG has accepted all applications from eligible shareholders for approximately $236m of new shares, which will be used to partially fund the acquisition of Wesfarmers’ underwriting business in Australia and New Zealand.

Valid applications have been accepted in full, with no scaleback applied. IAG will issue approximately 43 million new shares at $5.47 per share and these shares will commence trading on Tuesday, 4 February 2014. Holding statements will be mailed to participating shareholders from Thursday, 6 February 2014.

Under IAG’s SPP, which closed on 24 January 2014, eligible IAG shareholders could invest up to $15,000 in new shares at $5.47 per share. This is the same price paid by institutional investors in IAG’s $1.2bn equity placement in December 2013, and is the lesser of:
  • A 4% discount to the closing price of existing IAG shares on 13 December 2013 ($5.47); or
  • A 2% discount to the five day volume-weighted average price of IAG ordinary shares traded on the Australian Securities Exchange (ASX) up to and including the 24 January 2014 closing date of the SPP ($5.51).
The money raised in the SPP, along with that raised in the December institutional placement, will be used to partially fund the acquisition of Wesfarmers’ insurance underwriting businesses.

The balance of the acquisition will be funded through internal resources and subordinated debt. The acquisition supports IAG’s strategic priorities of accelerating profitable growth in Australia and sustaining its market-leading position in New Zealand.

IAG’s MD and CEO Mike Wilkins, said he was pleased that so many Australian and New Zealand resident shareholders participated in the SPP. “Although applications for the SPP exceeded our initial target of $200m, we accepted the oversubscriptions we received to ensure that we met all the demand from eligible retail shareholders,” he said.