This filing relates to the proposed merger of OneBeacon Insurance Group, Ltd. and Intact Financial Corporation. The following is an update provided by OneBeacon to its employees on its internal website in connection with the proposed merger.
Town halls continue; Recent transition highlights; Get to know Intact more.
Town halls continue.
Following a visit to New York City last week, Charles Brindamour and Mike Miller headed west to visit the Denver office on June 13, and Charles visited our San Francisco office on June 14. In the employee town hall meetings, Charles talked about our objective of creating a leading North American specialty lines insurer by complementing each business’ respective strengths. He also spoke more about our companies’ shared values, including our mutual emphasis on: integrity, respect for each other, being customer-driven, striving for excellence and social responsibility. The Denver office is home to 72 employees representing seven business units while San Francisco is home to 17 OneBeacon team members and three business units.
Recent transition highlights.
| ● | The U.S. Federal Trade Commission granted early termination of the waiting period under the Hart–Scott–Rodino Antitrust Improvements Act (HSR Act). The HSR Act provides that parties must not complete certain mergers or acquisitions until they have made a detailed filing to determine that the transaction will not adversely affect U.S. market competition. Early termination of the HSR Act waiting period means that the transaction has been approved from a U.S. antitrust perspective. As a result, the task forces have greater flexibility to share information to facilitate transition planning. |
| ● | Project managers submitted their first weekly status reports to the Steering committee this week. Activities are well underway in creating a leading North American specialty lines insurer. |
| ● | The first steering committee meeting after the initial kickoff was held on Thursday. This was an opportunity for task force chairs and co-chairs to meet via videoconference from the Plymouth, Montreal and Toronto offices to plan transition activities in a coordinated fashion. |
A Little Bit More About…
Over the coming weeks we will be communicating updates regarding transition activities. As part of that process, we also intend to share information geared at helping our communities come together and learn a bit more about our various companies and operations, our people, our shared values and our different cultures and countries.
Today, let’s learn a little bit more about Intact!
Intact Financial Corporation is the largest provider of property and casualty insurance in Canada with over $8.0 billion (CAD) in annual premiums. Supported by over 12,000 employees, the Company insures more than five million individuals and businesses through its insurance subsidiaries and is the largest private sector provider of P&C insurance in British Columbia, Alberta, Ontario, Quebec, Nova Scotia and Newfoundland & Labrador. The Company distributes insurance under the Intact Insurance brand through a wide network of brokers, including its wholly owned subsidiary, BrokerLink, and directly to consumers through belairdirect. Click here to view a copy of the Intact 2016 Intact Annual Report (http://reports.intactfc.com/2016/en/).
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
The information contained in this communication may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included or referenced in this communication that address activities, events or developments which we expect will or may occur in the future are forward-looking statements. The words “will,” “believe,” “intend,” “expect,” “anticipate,” “project,” “estimate,” “predict” and similar expressions are also intended to identify forward-looking statements. These forward-looking statements include, among others, statements with respect to our:
| ● | change in book value per share or return on equity; |
| ● | financial and operating targets or plans; |
| ● | incurred loss and loss adjustment expenses and the adequacy of our loss and loss adjustment expense reserves and related reinsurance; |
| ● | projections of revenues, income (or loss), earnings (or loss) per share, dividends, market share or other financial forecasts; |
| ● | expansion and growth of our business and operations; |
| ● | future capital expenditures; and |
| ● | pending legal proceedings. |
These statements are based on certain assumptions and analyses made by us in light of our experience and judgments about historical trends, current conditions and expected future developments, as well as other factors believed to be appropriate in the circumstances. However, whether actual results and developments will conform to our expectations is subject to a number of risks, uncertainties or other factors which are described in more detail beginning on page 16 of the Company’s 2016 Annual Report on Form 10-K, that could cause actual results to differ materially from expectations, including:
| ● | recorded loss and loss adjustment expense reserves subsequently proving to have been inadequate; |
| ● | changes in interest rates, debt or equity markets or other market volatility that negatively impact our investment portfolio; |
| ● | competitive forces and the cyclicality of the property and casualty insurance industry; |
| ● | claims arising from catastrophic events, such as hurricanes, windstorms, earthquakes, floods or terrorist attacks; |
| ● | the continued availability of capital and financing; |
| ● | the continued availability and cost of reinsurance coverage and our ability to collect reinsurance recoverables; |
| ● | the ability to maintain data and system security; |
| ● | the outcome of litigation and other legal or regulatory proceedings; |
| ● | our ability to continue meeting our debt and related service obligations or to pay dividends; |
| ● | our ability to successfully develop new specialty businesses; |
| ● | changes in laws or regulations, or their interpretations, which are applicable to us, our competitors, our agents or our customers; |
| ● | actions taken by rating agencies from time to time with respect to us, such as financial strength or credit rating downgrades or placing our ratings on negative watch; |
| ● | our ability to retain key personnel; |
| ● | participation in guaranty funds and mandatory market mechanisms; |
| ● | our ability to maintain effective operating procedures and manage operational risk; |
| ● | changes to current shareholder dividend practice and regulatory restrictions on dividends; |
| ● | credit risk exposure in certain of our business operations; |
| ● | Bermuda law may afford less protection to shareholders; |
| ● | our status as a subsidiary of White Mountains, including potential conflicts of interest, competition, and related-party transactions; |
| ● | changes in tax laws or tax treaties; |
| ● | the risk that the proposed merger with Intact may not be completed on the currently contemplated timeline or at all; |
| ● | the failure to receive, on a timely basis or otherwise, the required approval of the proposed merger with Intact Financial Corporation (“Intact”) by OneBeacon’s shareholders; |
| ● | the possibility that any or all of the various conditions to the consummation of the merger may not be satisfied or waived, including the failure to receive any required regulatory approvals from any applicable governmental entities (or any conditions, limitations or restrictions placed on such approvals); |
| ● | the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement with Intact, including in circumstances which would require OneBeacon to pay a termination fee or other expenses; |
| ● | risks related to diverting management’s attention from our ongoing business operations and other risks related to the announcement or pendency of the proposed merger with Intact, including on our ability to retain and hire key personnel, our ability to maintain relationships with our customers, policyholders, brokers, service providers and others with whom we do business and our operating results and business generally; |
| ● | the risk that shareholder litigation in connection with the transactions contemplated by the merger agreement with Intact may result in significant costs of defense, indemnification and liability; and |
| ● | other factors, most of which are beyond our control. |
Consequently, all of the forward-looking statements made in this communication are qualified by these cautionary statements, and there can be no assurance that the anticipated results or developments will be realized or, even if substantially realized, that they will have the expected consequences. Readers should carefully review these risk factors, and are cautioned not to place undue reliance on our forward-looking statements. The forward-looking statements in this communication speak only as of the date on which they are made. We assume no obligation to update publicly any such forward-looking statements, whether as a result of new information, future events or otherwise.
Additional information and where to find it
This communication may be deemed to be solicitation material in respect of the proposed takeover of OneBeacon by Intact. In connection with the proposed transaction, OneBeacon filed a definitive proxy statement with the Securities and Exchange Commission (the “SEC”) on June 8, 2017, and intends to file other relevant materials with the SEC. Investors and security holders are urged to read all relevant documents filed with the SEC (if and when they become available), including OneBeacon’s definitive proxy statement, because they will contain important information about the proposed transaction. Investors and security holders will be able to obtain copies of the proxy statement and other documents filed with the SEC (if and when available) free of charge at the SEC’s website, http://www.sec.gov, or for free from OneBeacon by contacting ir@onebeacon.com. The definitive proxy statement was mailed to OneBeacon’s shareholders of record who are entitled to vote at the special general meeting on or around June 14, 2017.
Participants in solicitation
This communication is neither a solicitation of a proxy nor a substitute for any proxy statement or other filings that may be made with the SEC in connection with the proposed transaction. OneBeacon, Intact and their respective directors, executive officers and other members of management and employees, under SEC rules, may be deemed to be “participants” in the solicitation of proxies from holders of OneBeacon’s common shares in favor of the proposed transaction. Information about OneBeacon’s directors and executive officers is set forth in OneBeacon’s Proxy Statement on Schedule 14A for its 2017 Annual General Meeting of Shareholders, which was filed with the SEC on April 11, 2017, its Annual Report on Form 10-K for the fiscal year ended December 31, 2016, which was filed with the SEC on February 27, 2017 and its Current Report on Form 8-K filed with the SEC on March 6, 2017. Information about Intact’s directors and executive officers is set forth in Intact’s Management Proxy Circular for its 2017 Annual and Special Meeting of Shareholders, its Annual Information Form for the fiscal year ended December 31, 2016 and its Management’s Discussion and Analysis for the fiscal year ended December 31, 2016, all of which are available on www.sedar.com. These documents may be obtained free of charge from the sources indicated above. Additional information regarding the interests of these participants which may, in some cases, be different than those of OneBeacon’s shareholders generally, is included in OneBeacon’s definitive proxy statement relating to the proposed transaction and other materials filed by OneBeacon with the SEC.
