Delta Lloyd /​ NN Group: Antitrust Analysis; Dutch Referral Request

CEO, Manalo LLP

Roderick Manlo

Manalo LLP

We provide event driven research services to hedge fund managers and institutional investors that cover select definitive and pre-announced M&A deals, focusing on identifying and analysing the key upside and downside risks to a particular transaction. We primarily analyse $billion+ takeovers or mergers of publicly-traded European targets, but also look at deals globally to assess when there is a key European angle or aspect that can influence the deal outcome.

With over 16 years’ experience in risk arbitrage and investment banking, we specialise in providing research and advisory services on all facets of risk arbitrage, with particular expertise in:

- Cross-Border M&A
- Hostile Takeovers
- Local Takeover Codes
- Antitrust & Competition
- Financial Valuation
- Shareholder Vote Analysis
- Impacts of Precedent Transactions
- Risk Arbitrage Trading Strategies

Event-Driven

<p>Many analysts were surprised by how easily Delta Lloyd’s Boards succumbed to NN’s initial approach, especially as Delta Lloyd was in the midst of pursuing a management-led recovery and adamantly stated that the original €5.30 per share proposal substantially undervalued the company. Agreeing to an offer with only a 1.9% bump showed that NN concluded that Delta Lloyd’s prospects were grimmer than it expected, Delta Lloyd realised that there was no other buyer for it, and/or Delta Lloyd's standalone recovery might take much longer than anticipated. Bullish pre-event investors were disappointed with the outcome, with Delta Lloyd shares trading lower on the day of the agreed deal announcement and 4% less than its high a month prior. Nevertheless, we now have an agreed deal at €5.40 (cum dividend) with the support of both Boards.</p><p>With the deal’s 95% minimum acceptance condition, the absence of deal support from major shareholders, Fubon (9.8%) and Highfields (9.4%), may lead to questions on NN’s ability to achieve sufficient shareholder support. However, NN can waive the minimum acceptance to as low as 67% without Delta Lloyd’s consent, and the acceptance level will be reduced to 67% if Delta Lloyd shareholders adopt the legal merger resolution at its EGM. The negative comments from Fubon and Highfields may cause volatility in Delta Lloyd but we cannot rule out Fubon taking action, primarily by increasing its stake in Delta Lloyd, which may support the stock.</p>

Many analysts were surprised by how easily Delta Lloyd’s Boards succumbed to NN’s initial approach, especially as Delta Lloyd was in the midst of pursuing a management-led recovery and adamantly stated that the original €5.30 per share proposal substantially undervalued the company. Agreeing to an offer with only a 1.9% bump showed that NN concluded that Delta Lloyd’s prospects were grimmer than it expected, Delta Lloyd realised that there was no other buyer for it, and/or Delta Lloyd's standalone recovery might take much longer than anticipated. Bullish pre-event investors were disappointed with the outcome, with Delta Lloyd shares trading lower on the day of the agreed deal announcement and 4% less than its high a month prior. Nevertheless, we now have an agreed deal at €5.40 (cum dividend) with the support of both Boards.With the deal’s 95% minimum acceptance condition, the absence of deal support from major shareholders, Fubon (9.8%) and Highfields (9.4%), may lead to questions on NN’s ability to achieve sufficient shareholder support. However, NN can waive the minimum acceptance to as low as 67% without Delta Lloyd’s consent, and the acceptance level will be reduced to 67% if Delta Lloyd shareholders adopt the legal merger resolution at its EGM. The negative comments from Fubon and Highfields may cause volatility in Delta Lloyd but we cannot rule out Fubon taking action, primarily by increasing its stake in Delta Lloyd, which may support the stock.

Delta Lloyd / NN Group: Deal Disruption from Fubon and Highfields?

Delta Lloyd NV

Delta Lloyd / NN Group: Deal Disruption from Fubon and Highfields?