- The boards of directors of Marsh & McLennan Companies Acquisition Limited (“Marsh”) and Jelf are pleased to announce that they have reached agreement on the terms and conditions of a recommended cash acquisition by which the entire issued and to be issued share capital of Jelf will be acquired by Marsh, a Marsh group company.
- Under the terms of the Acquisition, each Scheme Shareholder will receive 215 pence in cash for each Jelf Share.
- The price of 215 pence per Jelf Share represents a premium of approximately:
- 42 per cent. to the volume-weighted average Jelf share price of 152 pence for the twelve-month period ended 18 August 2015 (being the last business day before the announcement of the possible offer);
- 13 per cent. to the volume-weighted average Jelf share price of 190 pence for the six-month period ended 18 August 2015 (being the last business day before the announcement of the possible offer); and
- 4 per cent. to the closing Jelf share price of 207 pence on 18 August 2015 (being the last business day before the announcement of the possible offer).
- The Acquisition values Jelf’s existing issued and to be issued ordinary share capital at approximately £204 million and the existing issued Jelf Non-Voting Shares at approximately £54 million, giving an aggregate equity valuation of approximately £258 million.
- It is intended that the Acquisition will be implemented by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act.
- Founded in 1989, Jelf has 37 offices across the UK and provides expert advice to over 100,000 businesses and individuals on matters relating to insurance, healthcare, employee benefits and financial planning. With the Acquisition, Marsh would acquire one of the leading independent insurance brokers to the UK’s small and medium-sized enterprises (“SMEs”) and strengthen its presence in the large and mid-market companies segment. As such, it further develops the Marsh group’s ability to expand the services it provides UK SMEs, in line with the Marsh group’s global ambition in this segment. This interest is demonstrated by the Marsh group’s recent acquisitions in the UK of Leeds-based SMEi Insurance Services (an independent broker which provides specialist commercial insurance to small and medium-sized enterprises across the UK) and Aberdeen-based Central Insurance Services (the leading independent insurance broker in Scotland).
- Jelf and the Marsh group have a strong cultural fit and share the same values that put the client at the centre of both businesses. The companies believe that the combination of the two firms will offer individuals and companies of all sizes market-leading customer service, advice and products.
- The addition of Jelf’s businesses will significantly strengthen Marsh group’s distribution platform through their branches, affinity partners and direct channels. The transaction would also bring rich capabilities that support the clients of Marsh group and Jelf, both corporate and individual, across a broad range of risk, insurance and financial services needs. Jelf’s Purple Partnership will complement Marsh group’s own UK networks business, providing better service for the regional broker market.
- The Jelf Directors consider that while the prospects for future growth as an independent company remain strong, there are considerable benefits of combining with the Marsh group to accelerate Jelf’s strategic and financial objectives.
- The Jelf Directors, who have been so advised by Fenchurch as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing its advice, Fenchurch has taken into account the commercial assessments of the Jelf Directors.
- Accordingly, the Jelf Directors have unanimously approved the Acquisition and intend to recommend that Jelf Shareholders vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting as they have irrevocably undertaken to do in respect of their own beneficial holdings of, in aggregate, 5,420,951 Jelf Ordinary Shares representing approximately 6.3 per cent. of the issued Jelf Ordinary Shares on 9 September 2015 (being the last business day prior to the date of this announcement).
- In addition to the irrevocable undertakings from the Jelf Directors, Marsh has also received irrevocable undertakings from Allianz, Artemis, Capital Z Partners, Livingbridge and certain other employees and individuals to vote in favour of the Scheme at the Court Meeting and the resolution to be proposed at the General Meeting in respect of, in aggregate, 46,484,516 Jelf Ordinary Shares, representing approximately 54.3 per cent. of the issued ordinary share capital of Jelf on 9 September 2015 (being the last business day prior to the date of this announcement) and all the 25,063,838 Jelf Non-Voting Shares.
- Marsh has therefore received irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting in respect of, in aggregate, 51,905,467 Jelf Ordinary Shares representing, in aggregate, approximately 60.6 per cent. of the existing issued ordinary share capital of Jelf on 9 September 2015 (being the last business day prior to the date of this announcement) and all of the 25,063,383 Jelf Non-Voting Shares.
- It is expected that the Scheme Document, containing further information about the Acquisition and notices of the Court Meeting and General Meeting, together with the Forms of Proxy, will be posted to Jelf Shareholders and (for information only) participants in the Jelf Share Schemes as soon as practicable and, in any event, within 28 days of this announcement (unless the Panel agrees otherwise).
- Commenting on the announcement, Mark Weil, the Marsh group’s CEO for UK & Ireland, said:
“Jelf and the Marsh group are highly complementary businesses, both in terms of business and values. This transaction underlines our commitment to set the standard for advice and products that meet the risk, financial services and insurance needs of individuals and companies of all sizes across the UK. We have the highest regard for the management and team at Jelf. The Jelf team will be a huge asset for us and, together, we will provide the market-leading suite of solutions to our clients. We look forward to welcoming Alex and his team to the Marsh group.”
- Alex Alway, CEO of Jelf Group plc, added:
“I am extremely proud of the business that we have built since Jelf was founded in 1989. Every one of our colleagues has contributed to our deserved reputation for developing long-lasting, trusted adviser relationships with our clients. As our clients’ needs have continued to evolve, the Board and executive management team have given much thought about how best we meet their growing expectations. At the same time, we want to ensure that our colleagues are given the greatest opportunities to develop their careers. I am confident that this transaction is great news for our clients and colleagues alike.”
This summary should be read in conjunction with, and is subject to, the full text of the following announcement (including its Appendices). The Acquisition will be subject to the Conditions, including FCA Approval, and certain further terms set out in Appendix 1 and to the full terms and conditions to be set out in the Scheme Document. Appendix 2 contains the sources and bases of certain information contained in this summary and the following announcement. Appendix 3 contains details of the irrevocable undertakings received by Marsh. Appendix 4 contains the definitions of certain terms used in this summary and the following announcement.