DLA Piper has advised AIM-listed Tawa, renamed Pro Global Insurance Solutions (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 18 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’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 that was publically listed and one that 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, 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.