Nationwide Mutual Insurance Company and Nationwide Financial Services, Inc. Reach Agreement to Combine in $2.4 Billion Transacti
06 Agosto 2008 - 7:17PM
Business Wire
Nationwide Mutual Insurance Company (�Nationwide�) and Nationwide
Financial Services, Inc. (�NFS�) (NYSE: NFS) today announced that
they have entered into a definitive agreement for Nationwide to
acquire all of the outstanding publicly held Class A common stock
of NFS for $52.25 per share in cash. Nationwide currently owns all
of the outstanding NFS Class B common stock, which represents 66.3%
of the equity ownership and 95.2% of the combined voting power of
the shareholders of NFS. The transaction is valued at approximately
$2.4 billion and is expected to close by the end of 2008 or early
in 2009, subject to shareholder and regulatory approval. While the
transaction is subject to the vote of the holders of a majority of
the outstanding shares of Class A and Class B common stock of NFS,
Nationwide and certain of its affiliates have agreed to vote all of
their NFS shares in favor of the transaction, assuring that
shareholder approval will be obtained. Upon completion of the
transaction, NFS will become a wholly-owned subsidiary of
Nationwide. The $52.25 per share offer represents a premium of
approximately 38% over the closing price of NFS stock of $37.93 on
March 7, 2008, the last trading day prior to disclosure of
Nationwide's original proposal to acquire all outstanding publicly
held Class A common stock of NFS, and an increase of approximately
11% over Nationwide's original proposal of $47.20 per share.
�Combining the organizations will allow the Nationwide brand to set
itself apart from the competition by aligning our entire product
and service portfolio around the customer,� said Nationwide chief
executive officer Jerry Jurgensen. �A simpler ownership structure
will open new opportunities for stronger top-line growth by
attracting new customers as well as retaining current customers
with a broad and integrated product offering. It will also
facilitate more effective deployment of capital across the
enterprise, putting more assets to work where they can deliver the
best value for customers.� �While NFS� current structure has served
us well over the past decade, our ability to grow and meet the
needs of our customers over the next decade and beyond will benefit
from a simpler and more customer-centric business model,� said Mark
Thresher, president and chief operating officer of NFS. �We believe
that this transaction will create great benefits for our customers,
business partners and associates, under terms that provide fair
value for the public shares. In light of the difficult economic and
capital markets environment, we were particularly pleased that the
price represents an attractive premium to Nationwide�s original
proposal.� NFS Special Committee On March 10, 2008, NFS disclosed
that it had received a proposal from Nationwide to acquire all
outstanding publicly held shares of NFS Class A common stock for
$47.20 per share in cash. NFS� board of directors formed a special
committee of independent directors not affiliated with Nationwide
to evaluate the proposal. The transaction was recommended by the
special committee and approved by NFS� board of directors.
Financial and Legal Advisors Nationwide�s financial advisors on the
transaction are UBS Investment Bank and Goldman Sachs and its legal
counsel is Jones Day. Legal counsel for NFS is Dewey & LeBoeuf
LLP. Lazard is acting as financial advisor to the special committee
of the NFS board and Sidley Austin LLP is acting as the special
committee�s legal counsel. Conference Call and Webcast Information
NFS will host a conference call on Thursday, August 7, 2008 at 8:30
a.m. EDT to discuss the transaction, as well as NFS� second quarter
financial results, also released today. The dial-in number is
412-858-4600 and the conference ID is NFS 2Q Earnings Call. The
call can also be accessed via webcast in the Investor Relations
area of the Company�s web site at www.nationwide.com. A replay of
the conference call will be available beginning at noon on
Thursday, August 7 by dialing 412-317-0088. The passcode for the
replay is 421065. About Nationwide� Nationwide, based in Columbus,
Ohio, is one of the largest diversified insurance and financial
services organizations in the world, with more than $161 billion in
assets. Nationwide ranks #108 on the Fortune 500 list.1 The company
provides a full range of insurance and financial services,
including auto, motorcycle, boat, homeowners, life, commercial
insurance, administrative services, annuities, mortgages, mutual
funds, pensions, long-term savings plans and health and
productivity services. For more information, visit
www.nationwide.com. About Nationwide Financial� Nationwide
Financial Services, Inc. (NYSE: NFS), a publicly traded company
based in Columbus, Ohio, provides a variety of financial services
that help consumers invest2 and protect their long-term assets, and
offers retirement plans and services through both public- and
private-sector employers. It�s part of the Nationwide group of
companies, which offers diversified insurance and financial
services. To obtain investor materials, including the Company's
2007 Annual Report to Shareholders, 2007 Annual Report on Form
10-K, quarterly statistical supplements and other corporate
announcements, please visit the investor relations section of the
Company's Web site at www.nationwide.com. Nationwide, Nationwide
Financial, the Nationwide Framemark and On Your Side are federally
registered service marks of Nationwide Mutual Insurance Company.
FORWARD-LOOKING STATEMENTS Certain statements in this report
regarding the proposed Merger constitute �forward?looking
statements� under the federal securities laws. These
forward-looking statements involve certain risks and uncertainties.
Factors that may cause actual results to differ materially from
those contemplated or projected, forecast, estimated or budgeted in
such forward-looking statements include, among other, the following
possibilities: (i) the NFS� primary reliance, as a holding company,
on dividends from its subsidiaries to meet debt service obligations
and the applicable regulatory restrictions on the ability of the
NFS� subsidiaries to pay such dividends; (ii) the potential impact
on the NFS� reported net income and related disclosures that could
result from the adoption of certain accounting and/or financial
reporting standards issued by the Financial Accounting Standards
Board, the United States Securities and Exchange Commission (the
�SEC�) or other standard-setting bodies; (iii) tax law changes
impacting the tax treatment of life insurance and investment
products; (iv) repeal of the federal estate tax; (v) heightened
competition, including specifically the intensification of price
competition, the entry of new competitors and the development of
new products by new and existing competitors; (vi) adverse state
and federal legislation and regulation, including limitations on
premium levels, increases in minimum capital and reserves and other
financial viability requirements, restrictions on mutual fund
distribution payment arrangements such as revenue sharing and 12b-1
payments, and regulation changes resulting from industry practice
investigations; (vii) failure to expand distribution channels in
order to obtain new customers or failure to retain existing
customers; (viii) inability to carry out marketing and sales plans,
including, among others, development of new products and/or changes
to certain existing products and acceptance of the new and/or
revised products in the market; (ix) changes in interest rates and
the equity markets causing a reduction of investment income and/or
asset fees, an acceleration of the amortization of DAC and/or value
of business acquired, reduction in separate account assets or a
reduction in the demand for NFS� products; (x) reduction in the
value of NFS� investment portfolio as a result of changes in
interest rates and yields in the market as well as geopolitical
conditions and the impact of political, regulatory, judicial,
economic or financial events, including terrorism, affecting the
market generally and companies in NFS� investment portfolio
specifically; (xi) general economic and business conditions that
are less favorable than expected; (xii) competitive, regulatory or
tax changes that affect the cost of, or demand for, NFS� products;
(xiii) unanticipated changes in industry trends and ratings
assigned by nationally recognized rating organizations; (xiv)
settlement of tax liabilities for amounts that differ significantly
from those recorded on the balance sheet; (xv) deviations from
assumptions regarding future persistency, mortality (including as a
result of the outbreak of a pandemic illness, such as Avian Flu),
morbidity and interest rates used in calculating reserve amounts
and in pricing NFS� products; (xvi) adverse litigation results
and/or resolution of litigation and/or arbitration, investigation
and/or inquiry results that could result in monetary damages or
impact the manner in which NFS conducts its operations; and (xvii)
adverse consequences, including financial and reputation costs,
regulatory problems and potential loss of customers resulting from
failure to meet privacy regulations and/or protect NFS� customers�
confidential information. ADDITIONAL INFORMATION In connection with
the proposed transaction, NFS will file a proxy statement with the
SEC. Before making any voting or investment decision, investors and
security holders of NFS are urged to carefully read the entire
proxy statement, when it becomes available, and any other relevant
documents filed with the SEC, as well as any amendments or
supplements to those documents, because they will contain important
information about the proposed transaction. A definitive proxy
statement will be sent to the stockholders of NFS in connection
with the transaction. Investors and security holders may obtain a
free copy of the proxy statement (when available) and other
documents filed by NFS at the SEC�s website at http://www.sec.gov.
The proxy statement and such other documents may also be obtained
for free from NFS by directing such request to Mark Barnett - Vice
President, Investor Relations, Nationwide Financial Services, Inc.,
One Nationwide Plaza, Columbus, Ohio, 43215. PARTICIPANTS IN THE
SOLICITATION NFS, its directors, executive officers and other
members of its management, employees, and certain other persons may
be deemed to be participants in the solicitation of proxies from
NFS� stockholders in connection with the transaction. Information
about the interests of participants in the solicitation will be set
forth in the proxy statement relating to the Merger when it becomes
available. 1 Fortune Magazine, April 2008 2 Nationwide Investment
Services Corporation, member FINRA. In MI only: Nationwide
Investment Svcs. Corporation. Nationwide Mutual Insurance Company
and Affiliated Companies, Home Office: Columbus, OH 43215-2220
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