DLA Piper has advised AIM listed Tawa plc, renamed Pro Global Insurance Solutions plc ("PLC"), on the significant reorganisation of its operations culminating in the demerger of its risk carrier business.
The PLC group is a specialised investor in the insurance industry acquiring risk carriers in the run-off sector and more recently expanding into the service sector. Over the past eighteen months, DLA Piper has worked with PLC to evaluate the best options for maximising shareholder value. Following this strategic review, it was announced in December 2013 that PLC would demerge its business into two distinct groups. The objective of the demerger was for PLC to become a pure play quoted services business and the risk carrier business to be transferred to its wholly-owned subsidiary, Tawa Associates Ltd ("TAL"), an unquoted company.
DLA Piper advised a three stage structure involving an internal reorganisation pursuant to which Tawa's risk carrier business was transferred to TAL; a court approved capital reduction to create distributable reserves; and a dividend in specie of the shares in TAL to Tawa plc's ultimate shareholders.
The demerger was bespoke in nature as it did not involve listing the demerged entity, resulting in shareholders holding shares in two distinct legal entities, one which was publically listed and one which was unlisted. DLA Piper worked with the parties to address the difficulties that some shareholders encountered with respect to holding unlisted securities. This resulted in a share exchange offer being established by Financiere Pinault, the majority shareholder of Tawa plc, whereby qualifying TAL shareholders have the opportunity to exchange some or all of the TAL shares for PLC shares held by Financiere Pinault.
The DLA Piper core team comprised lead partner Prakash (PK) Paran partners Alex Tamlyn, Andrew Smith and Gunne Baehr, counsel Melanie James, senior associates Caroline Grange-Fielder, Tim Baumgartner, Phillip Williams and Chris Godwin, and associate Mitesh Kunvarji.
Gilles Erulin, CEO of TAL (previously CEO of PLC), commented: "This demerger of more than half of the assets of our listed company, with a number of regulated businesses, was an extremely complex project requiring a diverse range of legal expertise including corporate and regulatory law and deep insurance sector knowledge. The DLA Piper team brought all of that to the table and we completed on time, on plan and on budget in spite of the usual unexpected bumps. As the team is experienced in working with insurance clients, they do not have to learn on the job. They are able to include our specificities, including regulatory matters, as an integral part of their thinking. We also like the fact that they are highly responsive, knowledgeable and user friendly."
