Industrial Alliance Increases its Offer for Clarington to $15.00 per Share
Industrial Alliance Insurance and Financial Services Inc. ("Industrial Alliance" or the "Company") announced today that it has increased to $15.00 per share its offer to acquire all of the outstanding common shares of Clarington Corporation ("Clarington").
"This is the best offer and the only firm and binding offer made to Clarington shareholders to this point," stated Yvon Charest, President and Chief Executive Officer of Industrial Alliance. "This new offer recognizes that the strengths of the Clarington brand, sales and marketing expertise, scale and goodwill established over the years, when combined with Industrial Alliance’s financial resources and distribution network, will create a strong competitor in the increasingly concentrated retail fund marketplace."
The increased offer from Industrial Alliance follows notice earlier this week from Clarington, as provided by the Support Agreement between Clarington and Industrial Alliance dated November 6, 2005, of a Competing Transaction. Industrial Alliance will amend the offer dated November 18, 2005 and will mail a notice of variation to Clarington shareholders by December 6, 2005. Other than the increase in price, all other conditions of the offer remain unchanged and the offer remains open for acceptance until December 28, 2005.
The board of directors of Clarington continues to unanimously recommend the Industrial Alliance offer to its shareholders.
"Not only does our offer provide full and fair value to Clarington shareholders, but it will also provide substantial benefits to Clarington mutual fund unitholders," stated Normand Pépin, Executive Vice-President of Industrial Alliance. "We will give investors the option to retain their original investment, reinforced with our commitment to improve both expense ratios and the quality of investment management. In addition, we will allow them a range of options that include exchange privileges within 12 to 24 months into many other high quality funds which offer lower fees.".
"We respect our clients’ choices," added Mr. Pépin. "Investors chose Clarington funds over all other industry funds because of certain unique features. We think that they should be allowed to keep their Clarington funds."
Cost savings, synergies and added scale generated from this transaction will allow Industrial Alliance to directly reduce management expense ratios (MERs) to Clarington mutual funds over time. Industrial Alliance is already well known as a low cost provider for segregated funds and is committed to exercising the same discipline and efficiency in the administration of its mutual funds. In addition, Industrial Alliance will provide Clarington unitholders access to funds managed by its talented in-house investment managers and best of breed third party investment firms.
At the close of business on December 1, 2005, Industrial Alliance owned 637,500 shares of Clarington, which represents 4.3% of the outstanding shares of Clarington, on a fully diluted basis. Industrial Alliance has also signed lock-up agreements with Clarington shareholders related to 3,770,512 Clarington shares, or 25.5% of the outstanding shares of Clarington, on a fully diluted basis.
This news release may contain forward-looking statements about the operations, objectives and strategies of Industrial Alliance Insurance and Financial Services Inc., as well as its financial situation and performance. These statements can generally be identified by the use of words such as "may," "expect," "anticipate," "intend," "believe," "estimate," "feel," "continue," or other similar expressions, in the affirmative or negative. These statements are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied by the forward-looking statements. Factors that could cause actual results to differ materially from the Company’s expectations include changes in government regulations or in tax laws, competition, technological changes, global capital market activity, interest rates, changes in demographic data, changes in consumer demand for the Company’s products and services, catastrophic events and general economic conditions in Canada or elsewhere in the world. This list is not exhaustive of the factors that may affect any of Industrial Alliance’s forward-looking statements. These and other factors must be examined carefully and readers should not place undue reliance on Industrial Alliance’s forward-looking statements.
About Industrial Alliance
Founded in 1892, Industrial Alliance Insurance and Financial Services Inc. is a life and health insurance company that offers a wide range of life and health insurance products, savings and retirement plans, RRSPs, mutual and segregated funds, securities, auto and home insurance, mortgage loans and other financial products and services. The fifth largest life and health insurance company in Canada, Industrial Alliance is at the head of a large financial group – the Industrial Alliance Group – which has operations across Canada as well as in the Northwestern United States. Industrial Alliance insures over 1.7 million Canadians, employs more than 2,600 people and manages and administers over $32 billion in assets. Industrial Alliance stock is listed on the Toronto Stock Exchange under the ticker symbol IAG. Industrial Alliance is among the 100 largest public companies in Canada.
This press release is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering of securities that may be made in the United States will be made by means of a prospectus that may be obtained from the issuer and that will contain detailed information about the company and management, as well as financial statements. The issuer intends to register the proposed offer in the United States under the Securities Act of 1933, as amended.
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Vice-President, Investor Relations
Office phone: (418) 684-5275
Cell phone: (418) 576-3624