Michael
Kastenholz
|
|
German
|
|
Deputy
Chief Risk Officer of SCOR, Chief Financial Officer of SCOR Global
Life.
Dr.
Michael Kastenholz has a doctorate in Mathematics and is a member
of the
German Actuarial Association DAV. Dr. Kastenholz has spent most of
his
career at Gerling Globale in the Life reinsurance field: he was Executive
Director for Life & Health from 1998 to 2002, then interim Group CFO
of Gerling Globale and Member of the Board of Management of Gerling
Life
Reinsurance. Dr. Kastenholz has been CFO of Revios and a member of
the
Revios Vorstand since 2003. He was appointed CFO of SCOR Global Life
and
Deputy CFO of SCOR on November 23, 2006.
|
|
|
|
|
|
Gilles
Meyer
|
|
French
and Swiss
|
|
Deputy
Chief Executive Officer of SCOR Global Life, Director of Business
Unit 1,
SCOR Global Life.
Gilles
Meyer holds an MBA from GSBA in Zurich. After 23 years of experience
in
reinsurance, Gilles Meyer was CEO of Alea Europe from 1999 to 2006,
in
charge of both Property & Casualty and Life reinsurance, and from 2005
to 2006 he was Group Chief Underwriter of Alea. He joined the SCOR
Group
in January 2006, in charge of the German-speaking Business unit of
SCOR
Global P&C. He was appointed Director of SCOR Global Life's Business
Unit 1 and member of the Group Executive Committee in November
2006.
|
SCOR
Directors
|
Name
|
|
Citizenship
|
|
Current
Occupation and Business Experience
|
Denis
Kessler
|
|
French
|
|
Chairman.
See
above.
|
Carlo
Acutis
|
|
Italian
|
|
Vice-Chairman
of Vittoria Assicurazioni S.p.A. (Italy).
Carlo
Acutis is Vice-Chairman of Vittoria Assicurazioni S.p.A. He holds
several
other positions as Chairman or board member. An expert in the
international insurance market, he is a member and former chairman
of the
Comité Européen des Assurances (CEA) (European Insurance Committee), and a
Director of the Geneva Association.
|
|
|
|
|
|
Antonio
Borges
|
|
Portuguese
|
|
Vice-Chairman
of Goldman Sachs International, London.
Antonio
Borges is a member of the Supervisory Board of CNP Assurances and
a member
of the Fiscal Committee of the Banco Santander de Negocios Portugal.
He
was formerly Dean of the INSEAD business school.
|
|
|
|
|
|
Allan
Chapin
|
|
American
|
|
Partner,
Compass Advisers LLP (U.S.A.).
After
having been a partner at Sullivan & Cromwell and Lazard Frères, New
York, for a number of years, Allan Chapin has been a partner at Compass
Partners Advisers LLP, New York, since June 2002. He is also Director
of
the Pinault Printemps Redoute Groupe, InBev (Belgium), as well as
Director
of certain subsidiaries of SCOR US Corporation.
|
|
|
|
|
|
Daniel
Havis
|
|
French
|
|
Chairman
and Chief Executive Officer of Mutuelle Assurance des Travailleurs
Mutualistes (MATMUT).
|
|
|
|
|
|
Daniel
Lebègue
|
|
French
|
|
Chairman
of the Institut Français des Administrateurs (French Institute of
Directors).
Daniel
Lebègue has served as Head of the French Treasury Department, as Chief
Operating Officer of BNP, as Chief Operating Officer of the Caisse
des
Dépôts et Consignations, as Chairman of the Supervisory Board of CDC IXIS
and as Chairman of Eulia. He is currently a director of several
companies.
|
André
Lévy-Lang
|
|
French
|
|
Associate
Professor (Emeritus) at the Paris University of Dauphine.
André
Lévy-Lang was Chairman of the Management Board of Paribas from 1990
to
1999.
|
|
|
|
|
|
Luc
Rougé
|
|
French
|
|
Employee
of SCOR
|
|
|
|
|
|
Herbert
Schimetschek
|
|
Austrian
|
|
Chairman
of the Management Board of Austria Versicherungsverein auf Gegenseitigkeit
Privatstiftung (Holding).
From
1997 to 2000, Herbert Schimetschek was Chairman of the Comité Européen des
Assurances, and subsequently served as Vice Chairman of the Austrian
Insurance Companies Association until June 2000. From 1999 to 2001,
he was
Chairman of the Management Board and Chief Operating Officer of UNIQA
Versicherung S.A.
|
|
|
|
|
|
Jean-Claude
Seys
|
|
French
|
|
Chairman
and Chief Executive Officer of COVEA (SGAM).
Jean-Claude
Seys has spent his entire career in insurance. He was appointed Chairman
and Chief Executive Officer of MAAF in 1992, and subsequently Chief
Executive Officer of MAAF-MMA in 1998. He is now Chairman and Chief
Executive Officer of SGAM COVEA (a post he has held since June 2003)
as
well as being Chairman of MMA.
In
connection with the Crédit Lyonnais/ Executive Life matter, Jean-Claude
Seys entered into a settlement with the California prosecutor’s office in
2006 pursuant to which he is subject to five years of probation.
During
such time, he cannot travel to the United States without a special
authorization.
|
|
|
|
|
|
Jean
Simonnet
|
|
French
|
|
Chairman
of the SMIP (Mutuelle Complémentaire Santé) and of SOCRAM (a credit
institution).
|
|
|
|
|
|
Claude
Tendil
|
|
French
|
|
Chairman
and Chief Executive Officer of Generali France, Generali Vie, Generali
IARD and Europ Assistance
|
Patrick
Thourot
|
|
French
|
|
Senior
Advisor to the Chairman of
SCOR.
Patrick
Thourot is a graduate of Ecole Nationale d’Administration, Inspecteur
Général des Finances, was Chief Executive Officer of PFA (Athéna Group),
and worked for AXA, where he was a member of the Executive Committee
before he was appointed Chief Executive Officer of Zürich France. He was
Chief Operating Officer of SCOR Group from January 2003 until September
2007.
|
|
|
|
|
|
Daniel
Valot
|
|
French
|
|
Daniel
Valot was Chief Operating Officer of Total Exploration Production
before
joining the Technip group, where he was appointed Chairman and Chief
Executive Officer from September 1999 until April 2007.
|
|
|
|
|
|
Georges
Chodron De Courcel
|
|
French
|
|
(Non-Voting
Director), Chief Operating Officer, BNP Paribas
(France).
|
Item
4.
Terms of the Transaction.
(a)
Material
terms.
Given that SCOR
holds in excess
of 98% of
the Subject Company
’
s
voting rights, SCOR has filed a
cancellation action pursuant to Article 33 with the Court on October 25, 2007,
seeking a court-ordered cancellation of the Shares that it does not
own.
Upon
the declaration of effectiveness of the Cancellation by the Court, at the
earliest three months from November 22, 2007 (the date of publication of the
notification by the Court of the Cancellation action), all of the Registered
Shares not owned by SCOR will be cancelled in exchange for payment of
consideration consisting of (i) one-half of a SCOR Share, (ii) CHF 5.50 in
cash,
and (iii) EUR 0.40 in cash, which is the same combination of cash and shares
as
offered in the Swiss Offer. Following such Cancellation, the Subject Company
will reissue new Registered Shares to SCOR.
SCOR
will pay the Cancellation Consideration for each cancelled Registered Share
of
(i) 0.5 SCOR Shares, (ii) CHF 5.50 in cash, and (iii) CHF 0.65708 in cash
(corresponding to EUR 0.40 converted to CHF at the exchange rate EUR/CHF
applicable on the day preceding the settlement of the Swiss Offer).
As
in the Swiss Offer, fractional entitlements to SCOR Shares resulting from the
exchange ratio will not be delivered but pooled and the corresponding SCOR
Shares will be sold. The net proceeds of the sales will be distributed to the
Subject Company shareholders with fractional entitlements in CHF on a pro rata
basis. The cash payments compensating the
fractional
entitlements in SCOR Shares will be made with a value date on or around the
Cancellation date.
Holders
of ADSs will be entitled to the ADS Consideration. ADS holders will receive
the
ADS Consideration through BONY. As the SCOR Shares will not be registered in
the
United States of America under the Securities Act, BONY will endeavor to sell
the SCOR Shares and will distribute the proceeds in US dollars to ADS holders
on
a pro-rata basis, net of BONY’s fees and expenses. In addition, the Swiss franc
and Euro cash payments that are part of the Cancellation Consideration, will
be
converted by BONY into US dollars pursuant to the terms and conditions of the
Deposit Agreement and will be distributed to ADS holders net of BONY’s fees and
expenses.
SCOR
Shares may be held either in registered or bearer form, at the holder’s
discretion. While there are no transfer restrictions set forth in SCOR’s
articles of association, the transfer of larger blocks of SCOR Shares may
require the approval of the competent insurance regulatory authorities in
countries where SCOR either has a reinsurance/ insurance license or a
reinsurance/insurance subsidiary. SCOR Shares are traded on the Euronext Paris
(Eurolist). According to Article R. 211-5 of the French Monetary and Financial
Code, prior to any transfer on the Euronext Paris (Eurolist) of securities
held
in registered form, the securities must be converted into bearer form and
accordingly inscribed in an account maintained by an accredited intermediary
with Euroclear France S.A., a registered clearing agency. The transfer of
ownership of securities traded on the Euronext Paris (Eurolist) occurs at the
time of registration of the securities in the appropriate shareholder’s
account.
Each
SCOR Share has voting rights in proportion to the amount of the share capital
it
represents. When SCOR Shares are held in usufruct, the voting rights attached
to
such SCOR Shares belong to the grantee in ordinary general meetings and to
the
legal owner in extraordinary general meetings.
The
merger, dissolution or liquidation of SCOR must be decided by its extraordinary
shareholders’ meeting. In the event that SCOR is liquidated, the assets of SCOR
remaining after payment of its debts, liquidation expenses and all of its
remaining obligations will be used first to repay in full the nominal value
of
the SCOR Shares, then the surplus, if any, will be distributed among the holders
of SCOR Shares in proportion to the nominal value of their shareholdings and
subject to any special rights granted to holders of preferred shares, if
any.
For
the financial years 2004, 2005 and 2006 SCOR paid a dividend of EUR 24 million,
EUR 48 million and EUR 92 million, respectively.
(c)
Different
terms
. Registered Shares
directly or indirectly held by SCOR will not be cancelled in the
Cancellation.
As
described above, holders of ADSs will not receive SCOR Shares as part of the
consideration for their cancelled ADSs. BONY will endeavor to sell the SCOR
Shares and will distribute the proceeds in US dollars to ADS holders on a
pro-rata basis, net of BONY’s fees and expenses. In addition, the Swiss franc
and Euro cash payments that are part of the Cancellation Consideration, will
be
converted by BONY into US dollars pursuant to the terms and
conditions
of
the Deposit Agreement and will be distributed to ADS holders net of BONY’s fees
and expenses.
(d)
Appraisal
rights.
Under Swiss law, a
cancellation proceeding does not provide shareholders with appraisal rights.
A
Subject Company shareholder may only join the Cancellation action where it
argues that SCOR has failed to observe procedural requ
irements to achieve the
appropriate
level of voting rights in the Subject Company or to bring the Cancellation
proceeding within the applicable three month period. The Cancellation
Consideration becomes due as a consequence of the Cancellation and is set
b
y
virtue of mandatory law. It cannot be
changed by the court or the parties.
(e)
Provisions
for
Unaffiliated Security Holders.
SCOR has neither made
nor does it intend
to make any provision to grant unaffiliated security holders of the Subject
Company acce
ss to the
corporate files of SCOR. SCOR does not intend to obtain counsel to or appraisal
services for unaffiliated stockholders of the Subject
Company.
(f)
Eligibility
for listing or trading
.
SCOR has taken no steps to assure that the SCOR Shares issued t
o holders of the Registered
Shares will
be eligible for trading on an automated quotations system operated by a national
securities association.
Following
the Cancellation, the SCOR Shares will continue to be listed and traded on
Euronext Paris (Eurolist) and the SWX Swiss Exchange.
Item
5.
Past Contracts, Transactions, Negotiations and Agreements.
(a)
Transactions.
During
the past two years, there have been no transactions between SCOR, or, to the
best knowledge of SCOR, any executive officer or director of SCOR as listed
in
Item 3 to this Statement and the Subject Company, whereby the aggregate value
of
the transactions is more than 1% of the Subject Company’s consolidated turnover
for the fiscal year when the transaction occurred.
During
the past two years, the only transactions that occurred between SCOR, or, to
the
best knowledge of SCOR, any executive officer or director of SCOR as listed
in
Item 3 to this Statement and any executive officer, director or affiliate of
the
Subject Company that is a natural person that exceeded $60,000 in aggregate
were
the termination agreements entered into with Inga Beale (former Chief Executive
Officer of the Subject Company) and Paolo de Martin (former Chief Financial
Officer of the Subject Company) as discussed in Item 5(b) which amounted to
CHF
4.2 million (approximately $3.4 million) and CHF 2.5 million (approximately
$2.0
million) respectively.
(b)
Significant
Corporate Events.
During
the 12 months prior to the publication of the pre-announcement of the Swiss
Offer on February 26, 2007, SCOR Global P&C S.A. and IRP Holdings Ltd., both
wholly-owned subsidiaries of SCOR, purchased a total of 7,300,00 Registered
Shares and options for 4,900,000
Registered
Shares. All the options were exercised prior to the February 26, 2007
publication of the pre-announcement of the Swiss Offer by SCOR.
In
addition, on February 16, 2007, SCOR concluded a share purchase agreement and
a
contribution agreement with Patinex AG ("
Patinex
") concerning
the acquisition/exchange of another 29,020,350 Registered Shares. On February
17/18, 2007, SCOR entered into a share purchase agreement and a contribution
agreement with Alecta
pensionsförsäkring,
ömsesidigt
("
Alecta
")
concerning
the acquisition/exchange of 7,100,000 Registered Shares. In both cases the
compensation agreed upon consisted of 0.4938272 SCOR Shares plus a cash portion
of CHF 4.20 per Registered Share.
On
February 17, 2007, Mr. Kessler, Chairman and Chief Executive Officer of SCOR,
met in Zurich with Mr. Markus Dennler, the then Chairman of the Subject Company,
and Mr. Rudolf Kellenberger, the then Vice Chairman of the Subject Company,
to
present SCOR’s proposal for a friendly combination of SCOR and the Subject
Company.
On
February 19, 2007, the Subject Company issued a press release stating that
the
Board of Directors of the Subject Company had "carefully considered" SCOR’s
proposal for a combination and decided to reject the proposal.
On
February 26, 2007, SCOR issued a pre-announcement and a press release,
announcing its intention to launch a public tender offer in Switzerland for
all
publicly-held Registered Shares not already acquired by SCOR at 0.5 SCOR Share
and CHF 4 in cash for each Registered Share.
On
April 26, 2007, the SCOR Extraordinary Shareholders’ Meeting approved the
in-kind contributions of the Subject Company shares covered by the contribution
agreements with each of Patinex and Alecta. The meeting also approved
the issuance of SCOR Shares as remuneration for these contributions. Further,
the shareholders approved the issuance of SCOR Shares to be used for the
acquisition of the Registered Shares tendered pursuant to the Swiss
Offer.
On
April 26, 2007, following the receipt of approvals from SCOR shareholders for
all the resolutions relating to the combination of SCOR and the Subject Company
at the SCOR Extraordinary General Meeting, SCOR acquired 29,020,350 Registered
Shares, or approximately 19.8% of the Subject Company’s issued share capital,
pursuant to the terms and subject to the conditions set forth in the share
purchase agreement and the contribution agreement with Patinex, for an aggregate
consideration of CHF 121,885,470 (representing 20% of the consideration for
the
Registered Shares received from Patinex) and 14,331,037 newly issued SCOR Shares
(representing 80% of the consideration for the Registered Shares received from
Patinex). SCOR also acquired 7,100,000 Registered Shares, or approximately
4.8%
of the Subject Company’s issued share capital, pursuant to the terms and subject
to the conditions set forth in the share purchase agreement and the contribution
with Alecta, for an aggregate consideration of CHF 29,820,000 (representing
20%
of the consideration for the Registered Shares received from Alecta) and
3,506,173 newly issued SCOR Shares (representing 80% of the consideration for
the Registered Shares received from Alecta).
On
May 10, 2007, SCOR and the Subject Company entered into a transaction agreement
(the "
Transaction
Agreement
") in which SCOR agreed (a) to increase the cash portion of the
Offer Price from CHF 4 to CHF 5.50 and (b) not to reduce the Offer Price by
the
amount of the dividend of CHF 0.20 per Registered Share resolved by the
shareholders' meeting of the Subject Company on May 10, 2007. In addition,
SCOR
undertook, subject to the settlement of the Swiss Offer to (i) maintain a strong
presence in Zurich and make Zurich a strategic pillar and one of the three
European key hubs of the combined group, together with Paris and Cologne, (ii)
implement a secondary listing on the SWX Swiss Exchange, and (iii) ensure that
no employees of the Subject Company’s Swiss entities are served notice for a
period of 12 months following the date of settlement of the Swiss Offer (other
than for cause) and the compensation plans for such employees are not changed
during the same period. In addition, subject to the settlement of the Swiss
Offer, SCOR agreed to enter into termination agreements providing for lump
sum
payments with Inga Beale, the former Chief Executive Officer of the Subject
Company, and Paolo de Martin, the former Chief Financial Officer of the Subject
Company, terminating their employment agreements as of December 31,
2007.
In
return, the Subject Company and its Board of Directors unanimously agreed to
recommend to its shareholders to accept the Swiss Offer, subject to a superior
competing offer. The decision was fully supported by all members of the Subject
Company’s Global Executive Committee. The Subject Company further agreed to
abstain from taking any action that could prevent or compromise the Swiss Offer
or be otherwise detrimental to it. Pursuant to the Transaction Agreement, the
Subject Company, the members of its Board of Directors, the CEO and the CFO
and
the other key employees, as applicable, agreed to use their best effort to
(i)
ensure a seamless and smooth transfer of the managerial control over the Subject
Company to SCOR immediately after the settlement of the Swiss Offer and (ii)
maintain the relationships with the Subject Company’s current clients and other
stakeholders.
Moreover,
in the Transaction Agreement, SCOR and the Subject Company agreed to (i)
cooperate to ensure that the Swiss Offer conditions be met and the Swiss Offer
be consummated without delay, and (ii) set up a joint integration committee
and
a joint underwriting committee to ensure a smooth integration of the two groups,
to combine SCOR and the Subject Company’s business and strategic plans, and to
determine the underwriting plan for 2008, in each case subject to applicable
laws.
Following
approval by the Swiss Takeover Board on June 9, 2007, the Swiss Offer commenced
on June 12, 2007 with the initial offer period ending July 9, 2007. An
additional acceptance period commenced on July 13, 2007 and ended July 26,
2007.
The Swiss Offer was settled on August 8, 2007.
The
Swiss Offer was neither an offer to sell nor a solicitation of an offer to
buy
securities in the United States or to or from U.S. persons. The Swiss Offer
was
not made in or into the United States and was not capable of being accepted
by
U.S. persons or persons in the United States.
Upon
settlement of the Swiss Offer, SCOR owned 96.32% of the issued and outstanding
Registered Shares. At the Subject Company’s Extraordinary Meeting of
shareholders held on August 30, 2007, the shareholders approved a resolution
to
change the name of the Subject
Company
from Converium Holding Ltd. to SCOR Holding (Switzerland) Ltd. In addition,
the
shareholders approved the election of a new Board of Directors, comprising
Denis
Kessler, Georges Chodron de Courcel, Jürg Marty, Dr. J. Friedrich Sauerländer,
Jean-Luc Besson, Gilles Meyer and Victor Peignet.
As
described in Item 2 of this Statement, between the settlement of the Swiss
Offer
and the filing of the Cancellation proceeding, SCOR acquired further Shares
to
bring its ownership in the Subject Company to 98.06% by October 25, 2007, the
date of filing of the Cancellation.
(c)
Negotiations
or Contacts.
See Item
5(b).
(e
)
Agreements
Involving the Subject Company
’
s
Securities
. There are no
agreements, arrangements, o
r understandings between
SCOR or any of
its affiliates, executive officers and directors, and any other person with
respect to any securities of the Subject Company.
Item
6.
Purposes of the Transaction and Plans or Proposals.
(b)
Use of the
Securities Acqu
ired.
SCOR
intends to retain the Shares
acquired in the Cancellation to achieve a 100% ownership level in the Subject
Company.
(c)
Plans.
Other
than in connection with the
integration of the Subject Company and its subsidiaries in to the SCOR group
of
c
ompanies, SCOR has no
current plans that relate to or would result in any extraordinary transaction,
such as a merger, reorganization or liquidation, involving the Subject Company
or any of its subsidiaries; any purchase, sale or transfer of a material
am
o
unt
of assets of the Subject Company or
any of its subsidiaries; any material change in the present dividend rate or
policy, or indebtedness or capitalization of the Subject Company; any change
in
the present Board of Directors or management of the Subjec
t
Company,
including, but not limited to,
any plans or proposals to change the number or the term of the employment
contract of any executive officer; any other material change in the Subject
Company
’
s
corporate structure or
business.
On
December 14, 2007, the Subject Company applied for the delisting of its Shares
from the New York Stock Exchange. Effective January 7, 2008, the Shares were
delisted from the NYSE and the Subject Company filed with the SEC to deregister
its securities and terminate its reporting requirements under the Exchange
Act.
SCOR
has combined the European operations of SCOR and the Subject Company in three
key locations in Zurich, Cologne and Paris which should facilitate the future
group organization. In particular, SCOR intends to maintain the Subject
Company’s
presence
in Zurich.
Special
Factors
Item
7.
Purposes, Alternatives, Reasons and Effects.
(a)
Purposes
.
The purpose of the Cancellation is to
cancel the Shares held by remaining minority shareholders so that SCOR may
achieve 10
0% ownership of
the share capital of the Subject Company.
(b)
Alternatives
.
In the event that SCOR
’
s
shareholding in the Subject Company in
the three months following the expiration of the additional acceptance period
of
the Swiss Offer did not exceed 98%
, SCOR considered both
a squeeze-out
merger under Swiss law and a cross-border merger as alternatives to the
Cancellation. Both the squeeze-out merger and cross-border merger alternatives
would result in higher transaction costs and a longer timescale to
c
omplete
the acquisition of all of the
Shares. Since SCOR exceeded the 98% threshold, it pursued the
Cancellation and the squeeze-out merger and cross-border merger alternatives
were not considered further.
(c)
Reasons
.
SCOR sought the Cancellation to
ach
ieve 100% ownership of
the voting rights and outstanding Shares of the Subject Company in the shortest
period of time. The Cancellation minimizes transaction costs and permits the
unaffiliated shareholders of the Subject Company to receive the same
consid
e
ration
as that received by those holders
who tendered into the Swiss Offer.
The
combination of SCOR and the Subject Company resulted in the creation of the
fifth largest publicly listed global reinsurer in terms of gross written
premiums based on Standard & Poor’s Global Reinsurance Highlights figures
(2006 edition). It has
created a
powerful multi-line reinsurer covering all major markets.
SCOR
expects that the combination of SCOR and the Subject Company will lead to
accelerated growth, improved risk management and reduced earnings
volatility:
|
-
|
The
combined group will benefit from an enlarged non-life book of business,
well-balanced between the three sub-segments treaties, specialty
lines and
business solutions (facultatives).
|
|
-
|
The
combined operations will be strongly diversified by geographical
markets.
|
|
-
|
The
combined group will further benefit from a highly diversified revenue
base, well-balanced between life and non-life business lines, resulting
in
an increased ability to resist in case of any large unexpected losses.
|
In
addition, SCOR expects significant synergies to be extracted from various
sources that would lead to improved group efficiency, including reduction in
corporate functions, reduction in life and non-life operating administrative
expenses and cost reductions in IT, the optimization of retrocession costs,
tax
optimization, access to improved funding conditions, improved market position,
the sharing of best underwriting practices and increased investment
returns.
The
combined group will benefit clients and brokers by providing them a wider range
of services and covers on a large geographical scale.
(d)
Effects
.
The Cancellation will result in SCOR
holding 100% of the Subject Company
’
s
Shares. As such, the Subject Company
will be a wholly-owned subsidiary of SCOR.
Following
the Cancellation, unaffiliated shareholders of the Subject Company will no
longer hold Shares and will be paid the Cancellation Consideration or ADS
Consideration described in Item 4, as applicable.
Following
the Cancellation, SCOR’s interest in the net book value and net earnings of the
Subject Company will be 100%. SCOR’s interest in the net book value of the
Subject Company is
[€
1,888,461,730
(approximately $2,742,461,894)
] and the net income (group share) of the
Subject Company for the period from August 8, 2007 to September 30, 2007,
included in the SCOR consolidated income statement, is €40,000,000
(approximately $58,088,800). Furthermore, for the period between 26 April 2007
and 8 August 2007, 32.94% of the Subject Company results have been accounted
for
according to the equity method in the SCOR consolidated accounts. A profit
of
€12,000,000 (approximately $17,426,640), before €5,000,000 (approximately
$7,261,100) elimination of dividends distributed by the Subject Company, has
consequently been recorded as income from affiliates. At 100% of the shares,
the
net income (group share) of the Subject Company for the period from August
8,
2007 to September 30, 2007, in the SCOR consolidated income statement is
€41,000,000 (approximately $59,541,020).
Upon
settlement of the Cancellation, unaffiliated shareholders of the Subject Company
will no longer have any interest in, and will not be shareholders of, the
Subject Company and therefore will not participate in the Subject Company’s
future earnings and potential growth and will no longer bear the risk of any
decreases in the value of the Subject Company.
Upon
settlement of the Cancellation, the unaffiliated shareholders also will not
bear
the risks of potential decreases in the value of their holdings in the Subject
Company based on any downturns in the Subject Company’s future performance.
Instead, the unaffiliated shareholders will have liquidity, in the form of
the
Cancellation Consideration or ADS Consideration, in place of an ongoing equity
interest in the Subject Company in the form of the Shares.
Certain
U.S. federal
income tax consequences for U.S Holders.
The following is a summary
of certain U.S. federal income tax consequences of the Cancellation to
shareholders of the Subject Company all of whose S
hares (whether held directly,
indirectly
or constructively) are cancelled pursuant to the Cancellation. This summary
does
not purport to consider all aspects of U.S. federal income taxation that might
be relevant to shareholders of the Subject Company.
This
information is based on current provisions of the Internal Revenue Code of
1986,
as amended (the "
Code
"), existing,
proposed and temporary regulations promulgated thereunder by the United States
Department of Treasury and administrative and judicial interpretations thereof,
all of which are subject to change, possibly with a retroactive effect. This
information applies only to shareholders of the Subject Company in whose hands
Shares are capital assets within the meaning of Section 1221 of the Code. This
summary does not apply to Shares received pursuant to the exercise of employee
share options or otherwise as compensation, or to certain types of
shareholders
(such as (i) insurance companies, (ii) tax-exempt organizations, (iii) financial
institutions, (iv) brokers or traders, (v) real estate investment trusts, (vi)
regulated investment companies, (vii) grantor trusts, (viii) persons that have
a
functional currency other than the U.S. dollar, (ix) persons that own the Shares
through partnerships or other pass-through entities, (x) certain former citizens
or long-term residents of the United States, (xi) persons that hold the Shares
as a position in a "straddle," or as part of a "hedging," or "conversion" or
other risk reduction transaction for U.S. federal income tax purposes) who
may
be subject to special rules.
This
summary does not discuss the U.S. federal income tax consequences to any
shareholder of the Subject Company who, for U.S. federal income tax purposes,
is
a non-resident alien individual, a foreign corporation, a foreign partnership
or
a foreign estate or trust, nor does it consider the effect of any foreign,
state
or local tax laws. Because individual circumstances may differ, shareholder
should consult their own tax advisor to determine the applicability of the
rules
discussed below and the particular tax effects of Cancellation on a beneficial
holder of Shares.
For
purposes of this summary, a "U.S. holder" is a beneficial owner of Shares who
for U.S. federal income tax purposes is (i) an individual or resident of the
United States, (ii) a corporation created or organized in or under the laws
of
the United States or any political subdivision thereof (including the District
of Columbia); (iii) an estate the income of which is subject to U.S. federal
income taxation regardless of its source, or (iv) a trust, (A) if such trust
validly elects to be treated as a U.S. person for U.S. federal income tax
purposes or (B) if (1) a court within the United States is able to exercise
primary supervision over its administration and (2) one or more U.S. person
have
the authority to control all of the substantial decisions of such
trust.
A
shareholder who is not a U.S. holder, but (i) has an office or fixed place
of
business in the U.S. or is otherwise carrying on a U.S. trade or business,
or
(ii) who is an individual present in the U.S. for 183 days or more in a taxable
year or has a "tax home" in the United States for U.S. federal income tax
purposes, is urged to consult its own tax advisor to determine the U.S. federal
income tax consequences of the Cancellation to it.
If
a partnership (or any other entity treated as a partnership for U.S. federal
income tax purposes) holds our Shares, the tax treatment of a partner in such
partnership will generally depend on the status of the partner and on the
activities of the partnership. Such a partner or partnership should
consult its independent tax advisor as to its U.S. federal income tax
consequences of the Cancellation to it.
The
sale of Shares will be a taxable transaction for U.S. federal income tax
purposes and possibly for state, local and foreign income tax purposes as well.
In general, a shareholder who sells or disposes Shares will recognize gain
or
loss for U.S. federal income tax purposes in an amount equal to the difference,
if any, between (i) the U.S. dollar value of the amount of cash received plus
the fair market value of the property received and (ii) the shareholder’s
adjusted tax basis in the Shares sold. Gain or loss will be determined
separately for each block of Shares (that is, Shares acquired at the same cost
in a single transaction). Such gain or loss will be long term capital gain
or
loss provided that a shareholder’s holding period for such Shares is more than
one year at the time of the sale. Capital gain recognized by an
individual upon a disposition of a Share that has been held for more than one
year generally will be subject to a maximum U.S.
federal
income tax rate of 15%. Certain limitations apply to the use of a
shareholder's capital losses.
A
U.S. holder that receives Swiss francs upon the Cancellation of its Shares
will
realize an amount equal to the U.S. dollar value of the Swiss francs on the
date
of the Cancellation (or in the case of a cash basis or, if an election is made,
an accrual basis taxpayer, on the settlement date). A U.S. holder
will have a tax basis in the Swiss francs received equal to that U.S. dollar
amount. Any gain or loss realized by a U.S. holder on a subsequent
conversion of Swiss francs into U.S. dollars (or other disposition) generally
will be U.S. source ordinary income or loss.
U.S.
backup
withholding tax and information reporting requirements generally apply to
certain payments to certain non-corporate holders. Information
reporting generally will apply to proceeds from the Cancellation of the Shares
paid or accrued within the United States or by a U.S. payor or U.S. middleman
to
shareholders who are not otherwise exempt, other than an exempt recipient,
including a corporation and certain other persons. A payor will be
required to withhold backup withholding tax from the proceeds from the
Cancellation of the Shares within the United States or by a U.S. payor or U.S.
middleman to a holder, other than an exempt recipient, if such shareholder
fails
to furnish its correct taxpayer identification number or otherwise fails to
comply with, or establish an exemption from, such backup withholding tax
requirements. The backup withholding tax rate is 28% for taxable
years through 2010.
Backup
withholding is not an additional tax. A U.S. Holder will be entitled
to credit any amounts withheld under the backup withholding rules against such
holder's U.S. federal income tax liability provided the required information
is
furnished to the IRS in a timely manner. A U.S. Holder generally may
obtain a refund of any amounts withheld under the backup withholding rules
that
exceed such holder's U.S. federal income tax liability by filing a refund claim
with the IRS.
Item
8.
Fairness of the Transaction.
(a)
Fairness.
Pursuan
t
to Article 33, the cancellation is
only available if it is filed three months following the expiration of the
additional acceptance period of a Swiss public tender offer for the shares
of a
Swiss listed company and if the applicant directly or indirectl
y
owns
more than 98% of the voting rights
in such company. The price to be paid to shareholders whose shares are cancelled
in the Cancellation proceeding must be identical to the Offer Price that was
paid to shareholders in the Swiss Offer. The price paid
i
n
the Swiss Offer is a market-tested
price, as the Swiss takeover rules and procedures provide for a contest of
potential competing offers, require equal treatment of all offerors, and protect
against certain defenses. The Swiss takeover supervisory autho
r
ities
actively supervise the compliance
with these rules and take the necessary steps for their enforcement.
Accordingly, there is a presumption of fairness of the Cancellation to the
Subject Company
’
s
unaffiliated shareholders. No fairness
opinion has be
e
n
sought by SCOR on the appropriateness
of the consideration to be paid to the shareholders of the Subject
Company.
SCOR
believes that the Cancellation is both procedurally and substantively fair
to
the Subject Company unaffiliated shareholders. SCOR will conduct the
Cancellation in compliance with Swiss law. The Cancellation was approved
unanimously by the Board of Directors of
SCOR.
SCOR believes that no member of the Board had a material financial interest
in
this decision that was different from the interests of the Subject Company’s
shareholders. In addition, SCOR believes that no member of the Board of
Directors had a conflict of interest with respect to the Board’s approval of the
Cancellation that would make it inappropriate for any such Board member to
act
with respect to this decision. Accordingly, SCOR believes that the Cancellation
will be conducted in a way that is procedurally fair to security holders of
the
Subject Company.
The
Board of Directors of SCOR, in its unanimous approval of the Cancellation,
did
not find a need to engage a financial advisor to deliver a fairness opinion
in
connection with the Cancellation, reflecting the Board’s conviction that the
Cancellation is both procedurally and substantively fair to all its
shareholders.
(b)
Factors
Considered in Determining Fairness
. In reaching its conclusion
about
procedural and substantive fairness, the Board of Directors of SCOR considered,
among others, the following factors:
(i)
Price to be Received for the
Shares. Shareholders whose S
hares are cancelled in
the Cancellation
will receive the same consideration as that received by shareholders who
tendered their Registered Shares in the Swiss Offer. Pursuant to Swiss law,
the
consideration provided in the Cancellation cannot be different
from
that provided in the Swiss
Offer. Given that the Cancellation is only available in connection
with and shortly following the Swiss Offer, this presumes the fairness of the
Cancellation Consideration, as the Offer Price is a market-tested price, the
S
wiss
takeover rules and procedures
provide for a contest of potential competing offers, require equal treatment
of
all offerors, and protect against certain defenses. The Swiss takeover
supervisory authorities actively supervise the compliance with these
r
ules
and procedures and take the
necessary steps for their enforcement.
The
Subject Company and SCOR believe
that this consideration will represent the fair market value of any
holder
’
s
Shares. The Cancellation
Consideration, computed based on the unaffec
ted share price of the
SCOR Shares as of
16 February 2007, represents a premium of 24.2 % compared to the one
month
’
s
average share price of the Registered
Share prior to the announcement by SCOR of its acquisition of 32.9% of the
Shares.
(ii)
Availabilit
y
of Public Information. Currently, the Subject Company is subject to the periodic
reporting requirements of the Exchange Act. The Subject Company has filed a
Form
15F to deregister its securities from the reporting requirements of the Exchange
Act. The S
u
bject
Company
’
s
security holders will still have access to public information regarding their
SCOR Shares since SCOR is subject to French securities laws and has reporting
obligations relating to its listings on Euronext Paris (Eurolist) and on the
SWX
Sw
i
ss
Exchange. All material information pertaining to SCOR will continue to be
provided in English on SCOR
’
s
website. The level of disclosure available to the Subject Company shareholders
is not expected to be reduced substantively due to SCOR reporting
onl
y
under
French and Swiss laws.
(iii)
Availability of Trading Market
in
France and Switzerland. Following the Cancellation, former holders of Registered
Shares of the Subject Company will be able to trade the SCOR Shares on Euronext
Paris (Eurolist) and o
n the
SWX Swiss Exchange.
(c)
Approval
of
Security Holders
. The
Cancellation requires no shareholder approval, thus the transaction is not
structured such that approval of at least a majority of unaffiliated
shareholders is required.
(d)
Unaffiliated
Repre
sentative
.
A majority of the directors who are
not employees of the Subject Company have not retained an unaffiliated
representative to act solely on behalf of unaffiliated shareholders for the
purpose of negotiating the terms of the transaction or prepari
ng a report concerning
the fairness of
the transaction.
(e)
Approval
of
Directors
. The Cancellation
proceeding is not a corporate action on the part of the Subject Company, thus
the Subject Company's Board of Directors has not approved the Cancellation
act
ion.
(f)
Other
Offers
. Not
applicable.
Item
9.
Reports, Opinions, Appraisals and Negotiations.
(a)
Report,
Opinion or Appraisal.
Neither the Subject Company
nor SCOR
have received any report, opinion or appraisal from any outside party relating
to the Can
cellation.
(b)
Preparer
of
Summary of Report, Opinion or Appraisal
. Not applicable.
(c)
Availability
of Documents
. Not
applicable.
Tem
10. Source
and Amounts of Funds or Other Consideration.
(a)
Source of
Funds
. SCOR will
use 1,420,408 SCOR Shares, CHF
15.6 million and EUR
1.1 million from
SCOR
’
s
internal funds to fund the
Cancellation.
(b)
Conditions.
None.
(c)
Expenses.
Estimated expenses related
to the Cancellation described herein include:
|
Filing
fees:
|
$1,727
|
|
Legal
fees:
|
$
150,000
|
|
Printing
and distribution costs:
|
$
8
,000
|
SCOR
has paid or will be responsible for paying all of these expenses.
(d)
Borrowed
Funds.
None
Item
11.
Interest in Securities of the Subject Company.
(a)
Securities
Ownership.
The following
table sets forth
certain
information regarding the beneficial ownership of Shares of the Subject Company
as of January 22, 2008 by the Filing Person and their majority-owned
subsidiaries (where appropriate).
|
Name
of Beneficial Owner
|
Amount
and Nature of Beneficial Ownership
|
Percent
of Class
|
|
|
SCOR
Holding (Switzerland) Ltd.
|
--
|
--
|
|
|
SCOR
SE
|
143,848,646
Registered Shares
(1)
|
98.06%
|
|
|
(1)
|
SCOR’s
beneficial ownership includes 5,400,000 Registered Shares beneficially
owned by SCOR Global P&C SE and 6,800,000 Registered Shares
beneficially owned by IRP Holdings Limited both of which are wholly-owned
subsidiaries of SCOR.
|
(b)
Recent
Transactions by Filing Person.
Neither SCOR nor any
of its directors
and officers has made transactions in the Shares in the past 60
days.
Item
12. The
Solicitation or Recommendation.
(d)
Intent to
Tender or Vote in a Going-Private Transaction.
The Cancellation does
not involve a
voting decision or a tender, therefore no executive officer, director or
affiliate of the Subject Company or SCOR currently in
tends to tender or sell
Shares owned or
held by that person and such person will not vote Shares in connection with
the
Cancellation. Further, SCOR has brought the action to reach 100% ownership
in
the Subject Company and, accordingly, has no intention to
sell its Shares.
(e)
Recommendations
of
Others.
To the best of
SCOR
’
s
knowledge, no executive officer,
director or affiliate of the Subject Company has made a recommendation either
in
support or opposed to the Cancellation action, nor has it joined the
ac
tion. SCOR and its
directors and officers, passed a board resolution to bring the Cancellation
action.
Nonetheless,
in connection with the Swiss Offer, the Board of Directors of the Subject
Company unanimously recommended on May 10, 2007 that its shareholders accept
the
Swiss Offer. The decision was fully supported by all members of the Subject
Company’s Global Executive Committee.
In
the amendment to the Swiss Offer of June 12, 2007, the following recommendation
of the Swiss Offer by the Board of Directors of the Subject Company was
included. The recommendation is reproduced here in its entirety:
“The
recommendation and the reasons set out below are in replacement of those
contained in Section B of the first report of the Board of Directors published
on 14 April 2007.
1.
Recommendation
After
careful consideration, the Board of Directors of Converium determined that
it is
in the best interest of Converium, its shareholders, and the other stakeholders
to support SCOR’s increased offer (“Offer”). The Board of Directors therefore
unanimously recommends that the shareholders of Converium accept the Offer
and
tender their Shares into the Offer. Such decision is fully supported by all
members of Converium’s Global Executive Committee (“GEC”).
2.
Reasons
(a)
P
rolonged
and Hostile Stalemate Could
Have Damaged Converium
’
s
Franchise
The
primary objective of recommending the Offer, fully supported by the GEC, was
to
pre-vent damage to all parties involved in case of a prolonged and hostile
stalemate. In the interest of Converium’s shareholders, employees and clients
Converium wished to clear the way for a successful combination and to avoid
a
situation which could have led to disadvantages for all parties involved and
could have damaged Converium’s franchise.
In
the Transaction Agreement, Converium agreed to support the integration process.
In particular:
|
−
SCOR
and Converium agreed to
cooperate to ensure that the Offer conditions be met and the Offer
be
consummated without delay;
|
|
−
SCOR
and Converium agreed to
coordinate, cooperate and use their commercially reasonable best
efforts
to obtain from counter
parties necessary
consents so as
to avoid termination of agreements because of change of control
clauses;
|
|
−
SCOR
and Converium agreed to set
up a joint integration committee and a joint underwriting committee
to
ensure a smooth integration of the two org
anizations,
to
|
|
combine
SCOR
’
s
Dynamic Lift Plan and
Converium
’
s
Business Plan, and to set up the
underwriting plan for 2008;
|
|
−
Converium
and also the CEO and the
CFO of Converium agreed to use their best efforts to support the
transfer
of the manageri
al
control.
|
The
Board
of Directors believes that these measures will help to minimize the possible
integration and execution risk of the transaction. The risk of losing customers
can be substantially lowered, but may not be entirely excluded due to the
tendency of the customers to diversify their reinsurance exposures. The extent
of a possible loss of customers cannot be predicted definitively today, because
it mainly depends on whether the customers, employees and business partners
choose to remain with the combined entity. While Converium estimated the loss
of
premium income originally at up to USD 800 million due to the hostile nature
of
the offer, the Board of Directors is, given the friendly cooperation, hopeful
that the combined entity will be able to minimize such premium loss
substantially. Further, the agreed cooperation between SCOR and Converium with
regard to the Offer and the integration is expected to make an important
contribution to the retention of key personnel.
Converium
will cooperate with SCOR to combine SCOR’s Dynamic Lift Plan and Converium’s
Business Plan with a view towards securing “A-” financial strength rating for
the combined entity. After the announcement of the Board of Directors’ support
for the Offer, Standard & Poor's Ratings Services stated that Converium’s
“A-” financial strength rating remains unaffected by the Board of Directors’
recommendation of the Offer.
The
integration process is
undertaken with a view to reducing the risks on the SCOR share price, which
represents about three fourths of the Offer price. At the annual general meeting
held on 10 May 2007, the proposed capital reduction of approximately USD 300
million was dismissed. Thus, such equity will not be replaced by hybrid capital.
Further, the prospective growth rate, the return on equity and the hybrid
capacity of the combined entity is not known today, since these elements will
substantially depend on the combination of SCOR’s Dynamic Lift Plan with
Converium’s Business Plan and the implementation of the combined plan.
Nevertheless, the Board of Directors is of the view that the cooperation within
the integration process will have a positive effect on these elements and thus
also for the shareholders of both companies
.
It
is to
be noted that as long as the Offer has not been consummated, the integration
process will only be prepared, but may not be implemented. Finally, Converium
understands that SCOR will comply with Article 13 of the Ordinance on the
Supervision of Private Insurance Companies.
(b)
Increas
ed
Offer Price Values Converium
’
s
Franchise Adequately
SCOR
increased the cash component of its Offer price by CHF 1.5 and waived its right
to decrease the Offer price due to Converium paying a dividend of CHF 0.2 per
Converium Share. Taking the dividend payout into account, this leads to an
increase of the valuation of Converium by about CHF 250 million. The Board
of
Directors believes that this increase raises the Offer price to a level where
it
is adequate. The increase in the offer price represents a
significant
improvement
in the
consideration
offered to Converium’s shareholders and recognizes Converium’s remarkable
turnaround of the past two years. It further reflects the exceptional quality
of
Converium’s staff, longstanding client relationships and excellent growth
prospects supported by a strong capital position.
The
Offer price, computed based on the unaffected share price of the SCOR share
per
16 February 2007, now represents a premium of 24.2% compared to the one month’s
average share price of the Converium Share prior to the announcement by SCOR
of
its acquisition of 32.9% of all Converium Shares. Such premium corresponds
approximately to the average of the premiums offered in Switzerland since 2001
in public takeovers where no competing bid was submitted. It is above the median
of these offer premiums. If such Offer price is compared to the closing share
price of the Converium Share on 16 February 2007, a premium of 20.3% results.
Such premium is between the median and the average of the premiums offered
in
Switzerland since 2001 in public takeovers where no competing bid was
submitted.
These
premiums are below those offered in prominent unsolicited offers (Leica
Geosystems Holding AG, Saia Burgess Electronics Holding AG, Bank Linth AG und
SIG Holding AG). However, for these companies, competing offers were submitted,
which often results in an increase of the offer price. This was not the case
at
hand. Since the increase of the Offer price has been published, the average
Offer price is slightly above (by about 1%) the share price of the Converium
Share.
(c)
The Increased Offer, in
Combination with the Transaction Agreement Negotiated by the Board of Directors,
Gives Due Regard to the Interests of Other Stakeholders
The
Board of Directors believes that the increased Offer, together with the
Transaction Agreement, also gives due regard to the interest of the major
stakeholders:
In
the Transaction Agreement, SCOR agreed, subject to the settlement of the Offer,
to maintain a strong presence in Zurich and to make Zurich one of the three
European key hubs of the combined Group. The Zurich operating entity shall
operate as a strategic pillar of the combined Group. Except for employees with
a
change of control clause in their employment agreement and for terminations
for
cause, SCOR agreed to ensure, subject to the settlement of the Offer, that
Converium and its Swiss subsidiaries do not serve notice of termination in
respect of employment agreements for a period of twelve months following the
settlement of the Offer. Finally, SCOR also agreed to implement a secondary
listing of its own shares at SWX Swiss Exchange.
The
improved Offer still excludes US shareholders. Nevertheless, since the
publication of the last board report, the percentage of shares held by US
shareholders has decreased. Although US persons may beneficially hold additional
shares, the US persons registered in Converium’s share register now only hold
less than 3% of all Converium Shares (including those deposited for ADRs).
Further, if the offer is not extended to US shareholders, substantial costs
can
be saved, which is in favor of all shareholders. Given the enhanced Offer price
and the uncertainty of success of the lawsuit by which Converium intended to
reach an extension of the Offer into the US, Converium decided to drop the
lawsuit.”
Item
13. Financial
Statements.
(a)
Financial
Information
. Th
e
Subject Company
’
s
audited financial statements for the
years ended December 31, 2005 and December 31, 2006 were previously filed as
part of the Subject Company's Annual Report on Form 20-F for the fiscal year
ended December 31, 2006 filed with the SEC o
n
June
14. 2007. Such financial statements
are incorporated herein by reference. In addition, the Subject
Company
’
s
unaudited financial information for
the six months ended June 30, 2007 previously furnished to the SEC on Form
6-K,
dated September 4, 2007,
are incorporated herein
by
reference.
Following
the Subject Company’s filing of a Form 15F to terminate its reporting
requirements under the Exchange Act on January 7, 2008, the Subject Company’s
reporting requirements have been suspended pending effectiveness of the
termination of its reporting requirements. Prior to the filing of the Form
15F,
the Subject Company was subject to the periodic reporting requirements of the
Exchange Act. In accordance with these requirements, the Subject Company filed
its Annual Report and other information with the SEC. These documents may be
inspected and copies are available at the SEC’s public reference rooms, which
are located at 100 F Street, Station Place, NE, Washington, DC 20549.
Information on the operation of the public reference rooms can be obtained
by
calling the SEC on 1-800-SEC-0330. You may also obtain copies of this
information by mail from the Public Reference Section of the SEC at the same
address. In addition, the SEC maintains a web site that contains reports and
other information filed by the Company and other issuers. The address of that
site is http://www.sec.gov.
(b)
Pro Forma
Information
. Not
material.
Item
14. Persons/Assets,
Retained, Employed, Compensated or Used.
None
Item
15. Additional
Information.
None
Item
16. Exhibits.
(a)(5)
English translation of Cancellation notice published in the Swiss Official
Gazette of Commerce on November 22, 2007, December 21, 2007 and January 21,
2008
and in
Neue
Zürcher
Zeitung on November 22, 2007 and December 22/23, 2007.
(b)
none
(c)
none
(d)
none
(f)
not applicable
(g)
not applicable
SIGNATURE
After
due inquiry and to the best of my knowledge and belief, I certify that the
information set forth in this statement is true, complete and
correct.
SCOR
SE
By:
/s/ Denis
Kessler
Name:
Denis Kessler
Title:
Chairman and Chief Executive Officer
Date:
January 25, 2008
31
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