Fidelity Life says ignore takeover attempt

Fidelity Life tells shareholders to take no action on takeover

Ian Braddock, chairman of insurer Fidelity Life, has instructed Fidelity’s shareholders to take no action on a takeover offer made by Tower. The following is taken from an October 4 letter sent by Mr Braddock to Fidelity shareholders:

The approach from Tower is unsolicited. As required by the Takeovers Code, the Board is currently evaluating the Takeover notice and is seeking detailed professional advice. The Board is in the process of engaging an independent financial advisor.

Details of the Board’s formal view on the offer will be communicated to shareholders in due course. In accordance with the Takeovers Code, Fidelity will also release its Target Company Statement, including a copy of the independent financial adviser’s report on the merits of the offer.

Our present attitude is as follows:

• The bid is unhelpful and, in our view, inappropriate.
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• Tower has indicated that it will seek some information from Fidelity. Tower is, however, a competitor and so we do not believe it would be in the best interests of shareholders for us to provide any confidential or sensitive information to Tower in relation to this proposed offer.
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• The Fidelity model, with our total commitment to independent advisers, is a critical component of our success which we are 100% committed to maintaining.
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• We are pleased to note that the two major shareholders in the business, who together own 70% of the company, have advised Fidelity that they would not be accepting the intended offer.
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Fidelity, on Friday, separately announced its annual results for the year ended 30 June 2010. That announcement showed a record net profit of $16.9 million, up 63% on 2009.

Directors have recommended that Fidelity shareholders take no action at this stage. Shareholders should wait for a formal takeover offer to be made, and for full details of Fidelity’s formal assessment of the offer. Fidelity’s assessment will include the Board’s recommendation and the independent financial adviser’s report, so that shareholders can make an informed decision.

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