Kiwi-owned Fidelity Life has inked a major – albeit conditional – deal with the New Zealand Superannuation Fund that could see the latter take a 41.1% stake in the insurer for a minimum $100 million.
The deal is still subject to a number of conditions, some of which require action from shareholders, a joint statement by both parties said. Fidelity Life chair Brian Blake believes the deal will help his company accelerate its growth strategy.
“Fidelity Life has experienced strong growth in recent years and this has outpaced our ability to fund the future rate of growth we’re aiming for without additional capital,” he explained.
For his part, NZ Super Fund chief investment officer Matt Whineray described the transaction as a “rare opportunity” for the Fund to take a significant direct stake in a New Zealand life insurance company.
Fidelity Life is privately held by more than 150 shareholders. According to the statement, the proposed investment is to be made up of $75 million of new shares issued to the NZ Super Fund at $115 per share; and the acquisition of a minimum of $25 million of existing shares.
Eligible minority shareholders (including all New Zealand resident shareholders) will have the opportunity to sell some or all of their shares to the NZ Super Fund for $130 per share.
The insurer’s board has come out in support of the deal, and has also encouraged shareholders to favour it as well. However, the insurer’s constitution will have to be changed and a vote on the changes will take place during the company’s annual meeting on December 12. If the constitution is altered and other conditions are met, the settlement will occur after that.
“This new capital will enable us to build digital capability to support innovation, productivity and improved support for customers, advisers and our partners,” said Nadine Tereora, chief executive of Fidelity Life.
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