Philadelphia Consolidated Holding Corp - Additional Proxy Soliciting Materials (definitive) (DEFA14A)
July 23 2008 - 2:42PM
Edgar (US Regulatory)
UNITED STATES
SECURITIES EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2)
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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Philadelphia Consolidated Holding Corp.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
date of its filing.
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(1)
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Amount Previously Paid:
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Form, Schedule or Registration Statement No.:
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On July 23, 2008, Philadelphia Consolidated Holding Corp. (the
Company
) distributed the
following communications to Preferred Agents of the Company:
July 23, 2008
To Our Valued Preferred Agents:
This
morning were pleased to announce that we have entered into a
merger agreement by which Tokio Marine Holdings, Inc., a leading Tokyo-based global insurer with a
presence in over 40 countries, will acquire Philadelphia Consolidated
Holding Corp. (the Company or PHLY). Becoming part of Tokio Marine Holdings is exciting news because it
will give us the resources and international platform to take our Company to the next level. Our
local expertise, coupled with Tokio Marines global resources, will allow the combined company to
realize superior growth and profitability in the US, Canada, South America & Europe.
As part of
Tokio Marine Holdings, we will work closely with its main operating
subsidiary, Tokio Marine & Nichido Fire, which was founded in 1879 and is the oldest and largest
property and casualty insurer in Japan. We believe that Tokio Marine is an excellent fit for PHLY,
as both companies have a long history of being best-in-breed insurers with a customer driven
approach, disciplined underwriting, and a focus on long-term growth and profitability.
Additionally, with over $170 billion in assets, Tokio Marines credit quality and overall financial
strength will open up avenues of expansion that should position the combined Company for sustainable
growth over the longer term.
You, our Preferred Agents, have been a significant part of our profitable growth over the years and
were very grateful for your commitment and loyalty. This transaction with Tokio Marine will
strengthen our capabilities to compete and, as a result, enhance our relationships with you. As a
result of this transaction, the combined company will achieve:
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Expanded U.S. operations:
The U.S. market, which is the largest P&C market in the world,
represents an area of great strategic importance to the combined company as it focuses on
continued growth.
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A stronger position in the international P&C market:
Combined with Tokio Marines
acquisition of Kiln (a London-based insurer & reinsurer) earlier this year, the addition
of PHLY to the Tokio Marine family completes its objective to establish a strong foothold
in both the U.S. P&C and London insurance markets.
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Expanded international business opportunities:
Paired with Tokio Marines credit quality
and overall financial strength, our solid operating base will provide Tokio Marine Holdings
a unique opportunity to expand the scale and profits of its international business, which
will facilitate diversification and long-term term growth.
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There are no significant overlaps in the Companies businesses, so todays announcement means that
we can continue to execute our current strategic plan with the
knowledge that we are now part of a stronger international operation with multiple opportunities for expansion.
We are very excited about this great new opportunity to take our
Company to the next level. We believe that this transaction will
provide all of us with enhanced resources and more business
opportunities allowing us to make significant strides forward in becoming a premier global
specialty insurer.
For any additional questions you may have regarding this transaction, please contact Joe Barnholt,
AVP of Investor Relations @ (610)617-7762 or Jbarnholt@phlyins.com.
Sincerely,
James J. Maguire, President & CEO James J. Maguire, Chairman & Founder
Additional Information and Where to Find It
This communication may be deemed solicitation material in respect of the proposed acquisition of
PHLY by Tokio Marine. In connection with the proposed acquisition, PHLY intends to file relevant
materials with the SEC, including PHLYs proxy statement on Schedule 14A. WE URGE SHAREHOLDERS OF
PHLY TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE, INCLUDING PHLYS
PROXY STATEMENT, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.
Investors and security holders will be able to obtain copies of the proxy statement (when
available) as well as other filed documents containing information about PHLY free of charge at the
SECs web site, http://www.sec.gov, and shareholders of PHLY will receive information at an
appropriate time on how to obtain transaction-related documents for free from PHLY. Such documents
are not currently available. Free copies of PHLYs SEC filings are also available from PHLY, One
Bala Plaza, Suite 100, Bala Cynwyd, PA 19004, Attention: Joseph Barnholt.
Participants in the Solicitation
PHLY, and its directors and executive officers, and Tokio Marine, and its directors and executive
officers, may be deemed to be participants in the solicitation of proxies from the holders of
PHLYs common stock in respect of the proposed transaction. Information about PHLYs directors and
executive officers is set forth in the proxy statement for PHLYs 2008 Annual Meeting of
Shareholders, which was filed with the SEC on April 15, 2008. Information about the directors and
executive officers of Tokio Marine is set forth in its Schedule 13D filing with the SEC with
respect to PHLYs shares. Shareholders and investors may obtain additional information regarding
the interest of such participants by reading the proxy statement regarding the acquisition when it
becomes available.
Forward-Looking Statements
Statements included in this communication that are not historical facts are forward-looking
statements within the meaning of the federal securities laws, including the Private Securities
Litigation Reform Act of 1995. These forward-looking statements include statements regarding
expectations as to the completion of the Merger and the other transactions contemplated by the
Merger Agreement. Forward-looking statements are based on our current expectations and beliefs
concerning future events and involve risks, uncertainties and assumptions. The factors that could
cause actual results to differ materially include, in addition to Risk Factors referred to in
filings made with the Securities and Exchange Commission (SEC), the following: operating costs,
customer loss and business disruption (including, without limitation, difficulties in maintaining
relationships with employees, customers or suppliers) may be greater than expected following the
announcement of the transaction; the retention of certain key employees at PHLY; the conditions to
the completion of the transaction may not be satisfied, or the regulatory approvals required for
the transaction may not be obtained on the terms expected or on the anticipated schedule; the
parties may not be able to meet expectations regarding the timing, completion and accounting and
tax treatments of the merger. PHLY and Tokio Marine assume no obligation to, and expressly
disclaim any obligation, to update the information in this release, except as otherwise required by
law. Readers are cautioned not to place undue reliance on these forward-looking statements that
speak only as of the date hereof.
PHILADELPHIA INSURANCE COMPANIES
PREFERRED AGENT FAQS
About Tokio Marine Group and background to the transaction
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Can you explain what has been announced today?
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Today, Tokio Marine Holdings, Inc (TM or
Tokio Marine) announced a definitive agreement under which it
will acquire all outstanding shares of Philadelphia Consolidated Holding Corp. (PHLY), for
$61.50 per share in cash. The total transaction value is U.S. $4.7 billion.
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This transaction represents a great opportunity for both companies. We believe that TMs
strong credit quality, financial breadth and extensive international reach will be of great
benefit to fuelling the next stage of PHLYs growth. Meanwhile, our strong distribution
relationships with brokers and agents and our local market knowledge will provide TM with a
substantial platform in its effort to realize superior growth and profitability in the U.S.
and internationally.
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2.
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Who is Tokio Marine Holdings?
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TM was founded in 1879 and is the oldest and largest P&C insurer operating in Japan. It is a
publicly trade company on the Tokyo & Osaka exchanges with a
ticker symbol of TKOMY. TMs website is
http://www.tokiomarinehd.com/en/index.html
. It has more than $170
billion in assets, $25 billion of equity & wrote $22 billion of net written premiums in its
last fiscal year ended April 1, 2008. The Company has a global network of offices operating
in 38 countries around the world, and conducts business in the United States through Tokio
Marine U.S. In the United States, TM has nine offices and 470 employees.
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TM enjoys an A.M. Best rating of A++, which ranks among the highest in the industry.
Other rating agencies including Moodys, S&P & Fitch all rate TMs subsidiaries with the
highest financial strength ratings. Click here to see a listing of ratings.
http://ir.tokiomarinehd.com/en/RatingInfo.html
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3.
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Why does a deal between PHLY and TM make sense?
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The proposed transaction represents the best long-term solution for PHLY. TM offers strong
credit quality, financial breadth and extensive international reach, which will help fuel the
next stage of our growth. Furthermore, there are a number of similarities between the
companies. Both PHLY and TM are best-of-breed insurers with a customer-driven approach,
profitable underwriting, and a focus on long-term growth. Both share cultures that promote
continuous improvement through mutual respect.
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4.
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Tokio Marine is a foreign company. Does that affect its ability to integrate our business?
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Both our management team and TMs are committed to ensuring this is a smooth process and that
business operations continue as normal. TM has an excellent track record of integrating
acquisitions and it has the experience and capabilities to integrate PHLY into the business.
Although headquartered in Tokyo, Japan, TM has a good knowledge of the U.S. market as the
Company currently conducts its U.S. business through its nine offices based here.
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5.
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How will PHLY change now that it is owned by Tokio Marine?
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TM has great respect for the superior growth and profitability that our Company has achieved
under our leadership. Both companies are best-of-breed insurers with a customer-driven
approach, profitable
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underwriting, and a focus on long-term growth. Both companies share the same corporate
philosophy and values and we anticipate more new business growth opportunities.
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6.
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Are there any near-term changes planned?
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We anticipate no change in the way the Company is run as a result of this transaction.
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7.
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Is there a chance this transaction will not be completed?
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There is always a chance that a transaction will not be finalized. However, we anticipate a
smooth path towards closing some time in the fourth quarter of 2008.
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8.
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When do you expect the deal will close?
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We expect the deal to close in the fourth quarter of 2008.
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9.
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What are the terms of the agreement?
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Under the terms of the agreement, TM will acquire 100% of the shares of PHLY for $61.50per
share in cash. There is no debt assumption under the terms of the deal. The total
transaction is worth $4.7 billion, which includes some stock-based compensation such as stock
options, granted to management and certain employees.
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10.
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Why are we learning about this on the day of the announcement and not sooner?
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Todays announcement is a material financial event for the Company. As a public company, we
are legally required to publicly disclose the agreement with TM. From a regulatory
standpoint, this was the earliest possible time at which we could communicate this news to
you.
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Employee/Preferred Agent Concerns
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Will there be any redundancies in conjunction with this announcement?
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We anticipate no change in the way the Company is run as a result of this transaction
therefore we expect no job reductions following the transaction. Furthermore, we expect the
transaction to create revenue synergies and new opportunities which will benefit our
employees, partners and customers.
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12.
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How many positions are there that overlap between PHLY and TM?
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We will know more after we complete the transaction but we anticipate that no positions will
overlap between our Companies.
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13.
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Will we retain our company name and branding?
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We anticipate no change in the way the Company is run as a result of this transaction
therefore we will retain PHLYs name and branding.
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14.
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Will we be relocating?
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Our headquarters and offices will remain in their current locations.
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15.
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Will workloads change because of this?
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Employees will see no change in their schedules as a result of the transaction. We are
committed to keeping the business running as normal.
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16.
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Will I need to travel more or relocate?
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Employees will see no change in their schedules as a result of the transaction. We are
committed to keeping the business running as normal.
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17.
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Can I talk about this deal with friends and family outside of PHLY?
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Yes, you may. This information has been disclosed publicly.
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18.
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I own shares in PHLY. What do I need to do in order to
receive the cash payment for my shares?
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Promptly after the closing, you will receive instructions as
to how to obtain payment for your shares from the Paying Agent.
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19.
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What happens to the Preferred Agent Stock Purchase Plan shares I already own?
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They will become vested on the Closing Date & a cash distribution will be made to you net of
any outstanding loan balances.
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20.
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Who should I contact to receive more information on the transaction?
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If you would like more information about the transaction, contact Joe Barnholt, AVP Investor
Relations @ (610)617-7626 or Jbarnholt@phlyins.com.
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21.
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How will Preferred Agents be kept informed about progress?
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Regional Vice Presidents will communicate directly with you as new information becomes
available.
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Integration
22.
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What is happening with the PHLY management team? Will the management structure change? Who
will run the business?
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TM maintains the view that the management and employees of PHLY are the key to its successful
performance. It is TMs and our intention to retain the current management structure and we
anticipate no change in the way the Company is run as a result of this transaction.
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23.
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How long will the integration process take?
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The integration process should be relatively short since PHLY will not change in any material
respect.
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24.
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Will the PHLY name and branding be maintained?
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Yes, we anticipate no change in the way the Company is run as a result of this transaction.
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25.
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I interact with distribution channel partners. What should I tell them?
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PHLY will be a stronger, & ultimately more diversified Company with international
capabilities as a result of the Transaction.
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Additional Information and Where to Find It
This communication may be deemed solicitation material in respect of the proposed acquisition of
PHLY by Tokio Marine. In connection with the proposed acquisition, PHLY intends to file relevant
materials with the SEC, including PHLYs proxy statement on Schedule 14A. WE URGE SHAREHOLDERS OF
PHLY TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE, INCLUDING PHLYS
PROXY STATEMENT, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.
Investors and security holders will be able to obtain copies of the proxy statement (when
available) as well as other filed documents containing information about PHLY free of charge at the
SECs web site, http://www.sec.gov, and shareholders of PHLY will receive information at an
appropriate time on how to obtain transaction-related documents for free from PHLY. Such documents
are not currently available. Free copies of PHLYs SEC filings are also available from PHLY, One
Bala Plaza, Suite 100, Bala Cynwyd, PA 19004, Attention: Joseph Barnholt.
Participants in the Solicitation
PHLY, and its directors and executive officers, and Tokio Marine, and its directors and executive
officers, may be deemed to be participants in the solicitation of proxies from the holders of
PHLYs common stock in respect of the proposed transaction. Information about PHLYs directors and
executive officers is set forth in the proxy statement for PHLYs 2008 Annual Meeting of
Shareholders, which was filed with the SEC on April 15, 2008. Information about the directors and
executive officers of Tokio Marine is set forth in its Schedule 13D filing with the SEC with
respect to PHLYs shares. Shareholders and investors may obtain additional information regarding
the interest of such participants by reading the proxy statement regarding the acquisition when it
becomes available.
Forward-Looking Statements
Statements included in this communication that are not historical facts are forward-looking
statements within the meaning of the federal securities laws, including the Private Securities
Litigation Reform Act of 1995. These forward-looking statements include statements regarding
expectations as to the completion of the Merger and the other transactions contemplated by the
Merger Agreement. Forward-looking statements are based on our current expectations and beliefs
concerning future events and involve risks, uncertainties and assumptions. The factors that could
cause actual results to differ materially include, in addition to Risk Factors referred to in
filings made with the Securities and Exchange Commission (SEC), the following: operating costs,
customer loss and business disruption (including, without limitation, difficulties in maintaining
relationships with employees, customers or suppliers) may be greater than expected following the
announcement of the transaction; the retention of certain key employees at PHLY; the conditions to
the completion of the transaction may not be satisfied, or the regulatory approvals required for
the transaction may not be obtained on the terms expected or on the anticipated schedule; the
parties may not be able to meet expectations regarding the timing, completion and accounting and
tax treatments of the merger. PHLY and Tokio Marine assume no obligation to, and expressly
disclaim any obligation, to update the information in this release, except as otherwise required by
law. Readers are cautioned not to place undue reliance on these forward-looking statements that
speak only as of the date hereof.
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