Philadelphia Consolidated Holding Corp - Additional Proxy Soliciting Materials (definitive) (DEFA14A)
July 23 2008 - 2:45PM
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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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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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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Total fee paid:
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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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Filing Party:
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Date Filed:
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On July 23, 2008, Philadelphia Consolidated Holding Corp. is conducting a webcast presentation for employees and preferred agents.
The text of the material is as follows:
Combination with
Tokio Marine Holdings
July 23, 2008
James Maguire Jr.
President & CEO
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Agenda:
Today's Announcement
About Tokio Marine Holdings
The Combined Company
Closing Remarks
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Today's Announcement
Tokio Marine Holdings (TMHD) to acquire
100% of Philadelphia Insurance
Creates upside for employees & agents, as the
two businesses are highly complementary with
little overlap
Provides significant strategic opportunity for
Philadelphia Insurance to grow its business
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Transaction Terms
Transaction
Consideration
per Share
Consideration
Details
Aggregate
Consideration
$61.50 per fully diluted share
Expected
Closing Date
Approvals
All cash acquisition of 100% of PHLY's outstanding shares
Employment agreements with executive management team
Voting approval from key family shareholders & NEO's
Substantial investment in TMHD stock by PHLY's Chairman, CEO, and
Executive Management Team promptly after closing
$4.7 billion
Fourth quarter 2008
Customary regulatory approvals and PHLY shareholder vote
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II. About Tokio Marine Holdings
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Who is Tokio Marine Holdings?
TMHD is a leading Tokyo-based global insurer:
Publicly traded on Tokyo & Osaka exchanges
Licensed & operating in over 40 countries
Outstanding credit quality and financial strength
Over $25 Billion Shareholders' Equity
Tokio Marine & Nichido Fire, the main
operating subsidiary:
Founded in 1879
Oldest and largest P&C insurer in Japan and the 13th largest
insurance company globally 2
Notes: 1 In accordance with Japanese GAAP as of 03/31/08. 2 By market capitalization on May 22, 2008
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Tokio Marine Holdings' Financials
2003 2004 2005 2006 2007
East 20.4 27.4 90 20.4
Assets 103 113 110 120 172
North 45.9 46.9 45 43.9
B $1
Assets
2003 2004 2005 2006 2007
East 20.4 27.4 90 20.4
NPW 16.8 18.1 17 16.9 18.8
North 45.9 46.9 45 43.9
B $2
Net Premiums Written
Strong asset base with
growing revenue and
profits will lead to
continued investment into
key international
operations
Notes: 1 Used FY ending 3/31 $/¥ rate. 2 Used FY Average $/¥
rate.
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Transaction Rationale
Expanded U.S. operations
Expand TMHD's international reach and
enhance PHLY's presence in existing & new
target markets
Stronger position in the international
P&C market
Strengthened presence in both the U.S. and
London insurance markets
Develop capabilities in Canada & other
countries
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Shared Values and Culture
Both companies are best-in-breed insurers with
Customer-focused approach
Disciplined underwriting
Proactive approach to marketing
Focus on long-term growth and profitability
Highly motivated, team-oriented professionals
PHLY and its management team will play a key role in
the combined international operations
Participation in TMHD's international strategic committee
Explore synergies with Kiln & TMHD non-Japanese offices
Immediately explore Canadian market for PHLY products
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III. The Combined Company
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The Combined Company
PHLY is stronger and positioned for Growth
Financial backing of Tokio Marine Holdings, Inc.
Expanded risk appetite in our niches
Increased limits capability for larger accounts
Reinsurance synergies=>Increased profitability
Potential for opportunistic growth:
PHLY's distribution network
TMHD's capital and financial strength
Expanded international presence:
Canada, South America, Europe
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The Combined Company
"Business as Usual"
No changes to PHLY's operation, products or relationships
Employee benefits, insurance, etc. along with day-to-day
responsibilities remain unchanged
Preferred Agent compensation including Profit Sharing
remains unchanged
Growth & Profitability goals remain consistent after the
Transaction is completed 4Q:08.
PHLY "Brand" becomes Stronger
A++ A.M.Best/AA S&P rated Parent company
Offices - 56 Total (TMHD 9 + PHLY 47)
Employees - 1,940 Total (TMHD 470 + PHLY 1,470)
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Combined Global Operation (outside
Japan): Increased Scale
Kiln (UK)1
NPW: $565M
Employees: Approx. 380
Global operation based
in U.K. Lloyd's
PHLY (U.S.)
NPW: $1,459M
Employees: Approx.1,400
47 Offices across the U.S.
International Business of TMHD after PHLY & Kiln
^^^^^^^^^^^^^^^^^
NPW: <$5.5B
Overseas employees: Approx. <10,000
Operation in 36 countries and 260 offices
Notes: 1,Assumes average $/¥ rate of 114.3 at FY ending 3/31/08.
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Combined Global Operation:
Increased profits (outside Japan)
$5.6B
$4.1B
1.4x
Net Premium Written (simple summation of 2007 result)1
Adjusted Approx. Earnings (simple summation of 2007 results)2
$667M
$330M
TMHD + Kiln
+ PHLY
2.0x
TMHD + Kiln
+ PHLY
The addition of PHLY leads to significant expansion of scale and profits of
the international business of the combined company
Notes: 1,2 Assumes average $/¥ rate of 114.3 at FY ending 3/31/08.
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Combined U.S. Operations:
Opportunistic Growth
TMHD's superior credit ratings and financial strength
TMHD enhances growth of PHLY's business through:
More new product offerings=>increased organic growth
Accelerated acquisition of high-quality portfolios of
agencies and brokers (Tactical Growth)
Improved efficiency of PHLY's ceded reinsurance
More efficient management of Cat risks and PML's
Financial Strength Ratings:
S&P Moody's A.M. Best
AAA Aaa A++ Tokio Marine & Nichido Fire
AA+ Aa1 A+ PHLY
AA Tokio Marine & Nichido Fir Aa2 Tokio Marine & Nichido Fire A
AA- Aa3 A-
A+ A1 PHLY
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Combined Global Operation:
Increased Scale
TMHD
Kiln
PHLY
International
Strategic Committee
Strengths
Superior credit ratings
Financial strength
Underwriting capacity
Global network
Strengths
Sophisticated underwriting
expertise
Prestigious brand in the Lloyd's
market
Strengths
Product development capabilities
focused on
targeted commercial markets
Disciplined operations
Marketing skills utilizing variety of
distribution channels
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Next Steps / Integration
PHLY & its partners continue to execute our strategy of
delivering high quality products & services to targeted
markets
PHLY, its employees & partners become the U.S.
platform for TMHD with the consistent growth &
profitability goals
Access to a wealth of international resources allowing
for immediate entry into Canadian niche markets
Explore business opportunities with TMHD's U.S.
operation with goal of cross-selling customers
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An Exciting Opportunity for PHLY
U.S. operations
Strong financial partner will facilitate growth in current and
new product lines
Enhanced appetite for growth through book rollovers &
renewal rights transactions
"Business as Usual" - no changes to PHLY's operating
business model for our employees and Preferred Agents
Strengthen PHLY "Brand" - 56 U.S. offices/1,940 employees
International P&C market
Opportunities to expand across our borders to become the
premier global specialty insurer.
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Additional Information
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 PHLY's proxy
statement on Schedule 14A. WE URGE SHAREHOLDERS OF PHLY TO READ ALL RELEVANT DOCUMENTS FILED WITH THE
SEC WHEN THEY BECOME AVAILABLE, INCLUDING PHLY'S 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 SEC's 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
PHLY's 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 PHLY's common stock in respect of the proposed transaction.
Information about PHLY's directors and executive officers is set forth in the proxy statement for PHLY's 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 PHLY's 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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