IGI Insurance is considering acquisition of up to 81.97% ownership interest in American Life Insurance Company (Pakistan) Limited (ALICO) in addition to such number of shares that may be acquired through the tender offer pursuant to the Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance, 2002.
In this regard IGI Insurance will shortly commence the Due Diligence exercise and negotiations for entering into a share purchase agreement.
The proposed acquisition is subject to the execution of share purchase agreement and completion of tender offer. It is also subject to the receipt of regulatory approvals including Competition Commission of Pakistan and the Securities and Exchange Commission of Pakistan.
Source: KSE Notice Attached.
EDITOR’s NOTE:
ALICO’s principal activity is to provide life insurance and accident and health services. In 2007, the stock of the company went as high as PKR 47 per share as compared to PKR 19 per share in July 2012. The company last paid a dividend in 2006 and currently trading at a P/BV multiple of 0.18x, one of the lowest in the industry.
The financial performance of the company has increased significantly with topline revenues reaching PKR 3.52 billion at the end of December 2011, a growth of 63% as compared to 2010. The company reported normalized earnings margin of 3.3% lower than previous year margin of 4%. The reported return on equity in 2011 was 3% primarily due to increase in book value per share from PKR 68 in 2010 to PKR 105 in 2011.
