ECGS notes that as a result of the Covid-19 pandemic the EGM will be held as an electronic meeting only. Consequently, it will not be possible to attend the EGM in person.

In general, Tryg is in compliance with the Danish regulations relating to the organization and procedures of the Extraordinary General Meeting.

Background

On November 18, 2020, the boards of directors of Canada-based Intact Financial Corporation ("Intact"), Tryg A/S and UK-based RSA Insurance Group plc ("RSA"), announced that they have reached agreement on the terms of a recommended cash offer to acquire RSA. Pursuant to the Transaction, Intact will retain RSA's Canadian, UK and international operations, Tryg will retain RSA's Swedish and Norwegian Businesses, and Intact and Tryg will co-own RSA's Danish Business on a 50/50 economic basis. The Transaction comprises £ 6.85 (in cash) per RSA share, plus payment by RSA of an earlier announced interim dividend of £ 0.08 per share. This would represent a £ 7.2 billion Transaction (EUR 8.52 billion) with Intact paying £ 3.0 billion (EUR 3.55 billion) and Tryg £ 4.2 billion (EUR 4.97 billion). Tryg intends to finance the acquisition through a rights issue for an aggregate amount of approximately EUR 4.95 billion (DKK 37 billion, see also below).

Under ITEM 1 the supervisory board seeks authorisation to issue up to 7,396,000,000 shares by way of cash contribution in connection with the acquisition of RSA (see above). ECGS notes that the existing shareholders shall have pre-emptive rights to subscribe for the new shares, proportional to their shareholdings, and the authority may only be used for the purpose of financing Tryg's acquisition of RSA. As a matter of principle, ECGS assesses capital increases for a special purpose on a case-by-case basis. ECGS considers the acquisition price of £ 7.2 billion, corresponding to multiples of 14.6x profit before tax, 15.6x (underlying) EPS, 18.8x net income (all as of FY-end 2019) and 1.8x net asset value per share (as of June 30, 2020), steep, but within acceptable limits. ECGS endorses the strategic rationale of the acquisition and furthermore notes that Tryg has a solid track record with regard to the integration of acquisitions. Therefore, ECGS believes that the estimated cost reductions and synergies are ambitious but not unrealistic. In view of the above, ECGS recommends to vote FOR.