6th Dec 2005 07:00
Gable Holdings Inc05 December 2005 For immediate release Not for release, publication or distribution in whole or in part in or into the United States, Canada, Australia, Replublic of South Africa or Japan 6 December 2005 Gable Holdings Inc. ("Gable" or "the Company") Proposed acquisition of Brown Duke AG ("Brown Duke") Proposed placing of 38,000,000 new Ordinary Shares at 12.5 pence per share Application for admission to trading on AIM Notice of Extraordinary General Meeting Gable is pleased to announce that yesterday it conditionally agreed to acquirethe entire issued share capital of Brown Duke AG. Highlights: • Placing to raise approximately £4.75 million gross (approximately £4.4 million net of expenses) by the issue of, in aggregate, 38,000,000 new Ordinary Shares at 12.5 pence per share. The Placing Shares will represent approximately 34.11 per cent. of the Enlarged Share Capital of Gable following Admission. • The new funds will be used to satisfy Minimum Solvency Capital requirements and to provide working capital for the enlarged business. • Following completion of the acquisition and grant of the Insurance Authorisation, it is proposed that Brown Duke's name is changed to Gable Insurance AG and that it will commence trading from January 2006 focusing primarily on writing insurance business in the niche construction and liability insurance markets in the UK and Ireland. • Brown Duke has a highly regarded management team led by William Dewsall, who has over 24 years' experience and a successful track record in the London insurance market including the establishment of Hogarth in 2000. On completion of the acquisition it is proposed that William Dewsall joins the Board of Gable as Chief Executive. • The funds raised pursuant to the Placing will be used to provide additional funding for the ongoing working capital requirements of the Enlarged Group. • The consideration payable in respect of the Acquisition is to be satisfied through the issue of 31,000,000 new Ordinary Shares, valuing Brown Duke at approximately £3.953 million (based on the closing middle market price of an Ordinary Share of 12.75p on 2 December 2005, the latest practicable date prior to this announcement). • In view of the size and nature of the acquisition of Brown Duke it constitutes a reverse takeover of the Company under the AIM Rules and therefore requires the prior approval of Shareholders at an extraordinary general meeting to be held on 22 December 2005. Enquiries: John BickTel: (020) 7451 9800 Strand Partners, which is authorised and regulated in the United Kingdom by theFinancial Services Authority, is acting as nominated adviser to the Company inconnection with the proposed admission of the Enlarged Share Capital to tradingon AIM. Its responsibilities as the Company's nominated adviser under the AIMRules are owed solely to the London Stock Exchange and are not owed to theCompany or to any Director or to any other person in respect of his decision toacquire shares in the Company in reliance on any part of this announcement.Walker Crips, which is authorised and regulated in the United Kingdom by theFinancial Services Authority and is a member of the London Stock Exchange, isacting as broker to the Company in connection with the Placing and proposedadmission of the Enlarged Share Capital to trading on AIM. Strand Partners andWalker Crips are not acting for anyone else and will not be responsible toanyone other than the Company for providing the protections afforded to theirclients or for providing advice in relation to the contents of this announcementor the Placing or the Admission of the Enlarged Share Capital to trading on AIM.No representation or warranty, express or implied, is made by either StrandPartners or Walker Crips as to the contents of this announcement, withoutlimiting the statutory rights of any person to whom this announcement is issued.The information contained in this announcement is not intended to inform or berelied upon by any subsequent purchasers of Ordinary Shares (whether on or offexchange) and accordingly no duty of care is accepted in relation to them. Strand Partners Limited has approved the contents of this announcement solelyfor the purpose of section 21 of the Financial Services and Markets Act 2000.The principal place of business of Strand Partners Limited is 26 Mount Row,London, W1K 3SQ. Certain definitions apply throughout this announcement and your attention isdrawn to the table at the end of this announcement where these definitions areset out in full. This summary should be read in conjunction with the full text of thisannouncement set out below. The Directors and Proposed Director accept responsibility for the informationcontained in this announcement. Subject as aforesaid, to the best of theknowledge and belief of the Directors and Proposed Director (who have taken allreasonable care to ensure that such is the case), such information is inaccordance with the facts and does not omit anything likely to affect the importof such information. This announcement does not constitute, or form part of, an offer or aninvitation to purchase any securities. Not for release, publication or distribution in whole or in part in or into the United States, Canada, Australia, Republic of South Africa or Japan 6 December 2005 Gable Holdings Inc. ("Gable" or "the Company") Proposed acquisition of Brown Duke AG ("Brown Duke") Proposed placing of 38,000,000 new Ordinary Shares at 12.5 pence per share Application for admission to trading on AIM Notice of Extraordinary General Meeting IntroductionThe Board is pleased to announce that the Company yesterday conditionally agreedto acquire the entire issued share capital of Brown Duke AG through the issue of31,000,000 new Ordinary Shares, valuing Brown Duke at approximately £3.953million, based on the closing middle market price of an Ordinary Share of 12.75pon 2 December 2005, the latest practicable date prior to this announcement.Following Completion the Sellers will own, in aggregate, 27.83 per cent. of theEnlarged Share Capital. Brown Duke is a company incorporated in Liechtenstein which has submitted anapplication for Insurance Authorisation from the FMA which will enable it toundertake insurance business in Liechtenstein. Brown Duke has a highly regardedmanagement team led by William Dewsall, who has over 24 years' experience and asuccessful track record in the London insurance market. Following Completion and grant of the Insurance Authorisation, Brown Dukeintends to provide cross-border insurance services into other EEA States underthe Passporting mechanism established by the EU Directives. The Passportingprocess in respect of the FSA in the UK and the IFSRA in Ireland is expected totake less than a month, and consequently the Enlarged Group is expected tocommence trading in January 2006, focusing primarily on writing insurancebusiness in the niche construction and liability insurance markets in the UK andIreland. In order to raise sufficient funds to satisfy the Minimum Solvency Capital andto provide working capital for the Enlarged Group, Gable proposes to raise £4,750,000 before expenses through the placing of 38,000,000 new Ordinary Sharesat the Placing Price. Walker Crips has agreed conditionally to carry out thePlacing, which will be underwritten in full by Penkenna. The Acquisition constitutes a reverse takeover of the Company under the AIMRules as it results in a fundamental change in the business of the Company fromthat of an investment company to an insurance company. As such, completion ofthe Acquisition is conditional on receiving the approval of Shareholders. Suchapproval is to be sought at the EGM, notice of which is set out in a circularthat was posted to shareholders yesterday. Completion of the Acquisition is alsosubject to the Conditional Insurance Authorisation being granted. It is expected that Admission will take place and that dealings in the ExistingOrdinary Shares, Placing Shares and Acquisition Shares will commence on 23December 2005. If the Proposals are not all successfully completed, trading inthe Existing Ordinary Shares will continue as normal. On Completion, the accounting reference date of the Company will be changed to31 December. Accordingly, the Company expects to publish its audited accountsfor the financial year ended 31 December 2005 by 30 June 2006. The Company and its investment strategyGable was incorporated on 30 November 2004 in the Cayman Islands and wasadmitted to AIM as an investment company on 21 January 2005 when it raised£1,000,000 before expenses, by way of a placing of Ordinary Shares at 5p pershare. The Company was established to build, through acquisition, a groupspecialising in the insurance and reinsurance sector. On admission the Company had no trading businesses or subsidiaries and the fundsraised from the placing at that time were to be used to investigate suitableinvestment opportunities, carry out due diligence on such opportunities and tomeet the Company's initial working capital requirements. In its AIM admission document dated 6 January 2005, the directors of the Companyat that time stated their intention that the Company would invest in insurance,reinsurance and specialised underwriting agency companies based in EEA Statesand that such entities would focus on the property, general and professionalliability and contractor's insurance classes. The then directors of the Companyalso stated that investment targets should display one or more of the followingcharacteristics: • recently incorporated status with the opportunity to obtain insurance authorisation in suitable EEA States where the opportunity for Passporting is available; • recently incorporated or existing specialised underwriting agency companies with proven management expertise; • under capitalised foreign insurers; • proven profitable portfolios; and • the requirement for management restructuring. The proposed Acquisition is in line with this stated investment strategy. Over the last few years the insurance sector has experienced a recovery drivenprimarily by strong growth in premium rates as the industry reacted to ashortage in underwriting capacity. With this recovery in premium rates theindustry has seen an increase in capacity in recent years due to the expansionof existing companies and new entrants into the sector. Despite these increasesin capacity the Directors believe that there continues to be a capacity shortagein certain niche insurance classes, particularly in the commercial and liabilitysectors, and this, coupled with the effect on the insurance industry of therecent hurricane catastrophes in the southern states of the United States,should ensure that the current high premium levels in these niche classes can bemaintained. Certain non-UK EEA States afford more favourable capital-to-underwritingcapacity ratios than those available to UK insurance companies. Accordingly,insurance companies operating in some EEA States outside the UK are better ableto leverage their capital when underwriting insurance business. In addition, theDirectors and Proposed Director are confident that there are operating costadvantages available to insurance companies providing insurance underwritinginto the UK from an overseas base using Passporting. The Directors and ProposedDirector believe that the Enlarged Group will have the appropriate capitalstructure to take advantage of these Passporting opportunities which have thebenefit of not carrying forward losses and potential losses from businessunderwritten in previous years. The directors of the Company believed then, and it is the Directors' andProposed Director's belief now, that given the recent premium rate rises incertain insurance classes, coupled with the advantages they consider can bederived from Passporting under the EU Directives, there exists a favourableclimate for operating in the insurance sector. The Directors and ProposedDirector do not now intend actively to pursue other investment opportunities inthe insurance sector in the short term and will concentrate the Enlarged Group'sactivities on Brown Duke, which will be renamed Gable Insurance AG followingCompletion. Information on Brown DukeBackgroundBrown Duke is incorporated in Liechtenstein and has submitted an application forInsurance Authorisation which will, once granted, enable it to undertakeinsurance business under the authority of the FMA in Liechtenstein. The Directors and Proposed Director are advised that a Conditional InsuranceAuthorisation will be granted to Brown Duke within a matter of days followingthe date of this announcement. Upon completion of the Proposals, Gable will apply approximately £4.2 million ofthe proceeds of the Placing to subscribe for additional shares in Brown Duke toprovide it with the required Minimum Solvency Capital, in order to obtain theformal Insurance Authorisation. Following Completion and grant of the Insurance Authorisation, Brown Duke willgive notice to the FMA, under the Passporting mechanism established by the EUDirectives, of its intention to provide cross-border insurance services intoother EEA States, including the UK and Ireland. The FMA is then obliged, withinone month, to notify the regulators of those EEA States (including the FSA inthe UK and the IFSRA in Ireland) of Brown Duke's intention. As soon as the FMAhas formally confirmed to Brown Duke that it has notified the regulator in anEEA State, Brown Duke is entitled to provide cross-border insurance servicesinto that EEA State. Accordingly, the Enlarged Group will commence trading inJanuary 2006. Covered risksThe Enlarged Group will initially focus on non-life insurance classes 8, 9 and13, as classified under insurance regulations in Liechtenstein, further detailsof which are set out below. The excess for each individual policy will benegotiated on a case by case basis subject to minimum levels set by the Board.Brown Duke will initially operate only in EEA States. Employers' liability (Class 13)Employer's liability cover insures businesses against liability to paycompensation and legal costs to employees who are injured or made ill at workthrough the fault of the employer. It is a legal requirement in the UK for acompany that has employees to have a minimum of £5 million (SFr 11.41 million)worth of employer's liability insurance. The industry standard, however, is toprovide £10 million (SFr 22.82 million) of cover. Public liability (Class 13)This protects the insured in respect of legal liabilities to third parties forboth bodily injury and for any loss of, or damage to, property which is causedby the negligence of the insured or its employees in the course of its business. Contractors all risk (Classes 8 and 9)Coverage for physical loss or damage to property is on an "All Risks" basisinsuring against damage to property in the course of construction by all sudden,accidental and unforeseen causes other than specified excluded perils and formsof damage. This cover includes works brought on to the site for the purposes ofthe contract as well as temporary works erected or constructed on-site.Additionally, the policy typically provides coverage for physical loss or damageto construction plant and machinery, equipment and tools. Annual contractors package (Class 8, 9 and 13)Insurance cover that combines contractors' all risk and liability cover,specifically employers' liability and public liability, into a single annualisedpackage. Fire and material damage (Class 8)Fire and material damage insurance protects the insured's property and certaincontents for material damage associated with fire, natural disasters and variousother specified perils. ReinsuranceIn order to balance the Enlarged Group's risk profile, it intends to purchase acomprehensive reinsurance programme. The strategy is to develop long-termrelationships with a limited number of financially sound reinsurers. Brown Dukehas received a proposal from HSBC Insurance Brokers Limited in this regard andwill ensure that all providers of reinsurance will be at least "A" rated byStandard and Poors and AM Best Company Inc. The Enlarged Group will maintain controls to limit the exposure to eachreinsurer as a function of their financial strength and credit rating. Management teamBrown Duke has a highly regarded management team in place with extensiveexperience in both the UK and European insurance and financial servicesindustries. The key management of Brown Duke comprises William Dewsall, JostPilgrim and Werner Meissl, details of whom are set out below. The future performance of the Enlarged Group depends heavily on its ability toretain the services of key employees, in particular William Dewsall. WhilstWilliam has entered into a service agreement with the Enlarged Group and will beinterested in 17.06 per cent. of the Enlarged Share Capital, the loss of hisservices for whatever reason is likely to have an adverse material effect on thebusiness and prospects of the Enlarged Group. William DewsallWilliam (Bill) Dewsall, aged 44, has over 24 years experience in the insurancemarket. William began his career in 1981 with Jardine Glanville (UK) whichincluded six months working in Hong Kong, following which he was a senior brokerand account executive at Berisford Mocatta covering property and reinsuranceplacements in the London and European markets. From 1984 until 1986 William wasa senior broker with Richard Longstaff, covering primarily reinsurance andproperty and contractors all risks placements both in the UK andinternationally. From 1986 until 1992 he was principal broker and leadunderwriter for Alexander Stenhouse, responsible for multi-national property,contractors all risks and liability insurance, including reinsurance.In 1998 William established his own underwriting agency, D&J Insurance ServicesLimited, to underwrite liability and contractors all risks into the Londonmarket. He later established Hogarth for the same purpose in 2000. As headunderwriter at Hogarth, William was granted binding authorities to underwriteinsurance risks in the UK and Ireland on behalf of various insurers operating inthe Lloyds of London market. Under these binding authorities these insurers haveutilised William's underwriting expertise and effectively outsourced part oftheir underwriting function to Hogarth for their UK and Ireland business in thisniche market. In addition to underwriting business for insurers William has been responsiblefor introducing several business initiatives in Hogarth, including theoutsourcing of the specialist claims handling and settlement function toindustry experts in order to secure the best service and keep fixed overheadcosts to a minimum. William has also been instrumental in developing policywordings for the Contractors and Liability insurance sector. William is registered with the FSA as an approved person for insuranceactivities. Jost PilgrimJost Pilgrim, aged 67, is a senior banker based in Liechtenstein and has almost50 years' experience in international banking and finance. In 1957 he startedwork as an apprentice at Dresdner Bank AG, where he remained for 18 years,following which he worked as branch manager for Banque Paribas and BayerischeHypotheken- und Wechsel- Bank AG. From 1982 to 1989 he was manager at Bank inLiechtenstein AG and also a member of the management board. Since 1992 he hasbeen a promoter and member of the supervisory board at, Neue Bank AG. Jost isalso a member of the Dux Trust Partners AG supervisory board. Werner MeisslWerner Meissl, aged 60, is a resident of Liechtenstein and has a wide range ofexperience in the insurance business. For more than 30 years he has held seniorpositions in insurance and insurance broker companies in Austria. In 1997 hefounded a life insurance company in Liechtenstein, Capital Leben AG, and iscurrently a director of Assurance Services AG and Prismalife AG. Underwriting and claims handlingFollowing Completion, Brown Duke's insurance products will be marketed anddistributed by Hogarth. William Dewsall is the managing director and soleshareholder of Hogarth, and he is also the majority shareholder of Brown Duke.Hogarth is authorised as an insurance intermediary by the FSA. Hogarth has, conditional upon Admission, entered into an underwriting and claimshandling agreement ("Underwriting Agreement") with Brown Duke under whichHogarth will market Brown Duke insurance policies to insurance brokers,introduce brokers and potential policyholders to Brown Duke, provideadministrative services such as collecting premiums and handling claims, arrangeand implement reinsurance, and ensure compliance with FMA and FSA requirements. Hogarth's fees under the Underwriting Agreement are equal to its costs, plus anytax payable upon its income. The appointment of Hogarth as agent under the Underwriting Agreement is intendedto be a temporary measure while the Company prepares its newly incorporatedwholly-owned subsidiary, Gable Underwriting Agency Limited, to undertake therole. An application to the FSA for authorisation to carry out insuranceintermediary activities will be submitted by Gable Underwriting followingCompletion. Upon receipt of such authorisation, the Underwriting Agreement between BrownDuke and Hogarth will be terminated without compensation, and Gable Underwritingwill enter into an agreement with Brown Duke in its place. The agreement betweenGable Underwriting and Brown Duke will be similar to the Underwriting Agreement,but Gable Underwriting will be paid a market-rate commission. Hogarth will thenenter into a members' voluntary liquidation. William Dewsall's service contract with the Company will ensure that, whetherHogarth or Gable Underwriting is the agent under the Underwriting Agreement, MrDewsall's expertise will be available full time. Technical accounting and administrationBack office and insurance accounting systems are to be provided to Brown Duke byASAG, which is based in Vaduz, Liechtenstein. ASAG will issue and maintain allaccounting records in Liechtenstein according to the applicable provisions underthe Liechtenstein Insurance Supervisory Law. The key responsibilities and activities undertaken by ASAG will comprise thegeneration and issue of policy documents to Brown Duke (following approval fromBrown Duke), general administration, accounting and regulatory reporting on amonthly basis as required by the Liechtenstein Insurance Supervisory Law. Werner Meissl is a director and president of ASAG. The Directors intend to appoint KPMG Liechtenstein as auditor of Brown Dukefollowing Completion. Claims handlingAll claims handling will be outsourced to Plexus Law, a specialist constructionand liability large loss legal practice in the UK, via a claims handlingagreement. The key responsibilities under this agreement include all claimshandling, the appointment of suitable loss adjustors and other specialistadvisers required for claims evaluation. Financial information on Brown DukeBrown Duke has not traded since incorporation. Reasons for the AcquisitionThe Acquisition is in line with the Company's stated investment strategy.Accordingly, the Directors and the Proposed Director believe that theAcquisition will provide the Company with a number of benefits. These include: 1. the Insurance Authorisation, which will enable Brown Duke to provide cross-border services into other EEA States utilising the Passporting mechanism and commence underwriting insurance risks in the niche focused construction and liability sectors where the Directors believe the current high premium rates will be maintained; 2. access to commission income from an underwriting agent in the UK (if and when Gable Underwriting becomes FSA authorised); 3. the benefits of Brown Duke's management's significant expertise, experience and contacts in the UK and European insurance markets, specifically in the niche area of construction and liability insurance; and 4. the anticipated increased profile of the Enlarged Group, which should enable the Company to attract and retain highly qualified and experienced personnel to augment the experience of Brown Duke's existing management team. Current trading and prospectsSince its incorporation in November 2004, the Company's only significantactivity has been to obtain admission to trading on AIM and to enter intoconditional agreements relating to the Acquisition. The Company raised £815,000net of expenses on its admission to AIM to invest in insurance, reinsurance andspecialised underwriting agency companies based in EEA States. The Directors and Proposed Director do not now intend actively to pursue otherinvestment opportunities in the insurance sector in the short term and willconcentrate the Enlarged Group's activities on Brown Duke. The Directors and the Proposed Director believe that the combination of theirexpectations relating to the opportunities in various niche insurance markets,the Acquisition, the Placing and the associated Admission, gives them reason tobe optimistic as to the Enlarged Group's prospects. Directors, Proposed Director, senior management and employeesAt the EGM, a Resolution will be proposed to appoint William Dewsall as adirector and Chief Executive Officer of the Company. John Leat will remainexecutive chairman and Joanna Barrett, Ian Tickler and Blaise Craven will remainnon-executive directors. Immediately following Completion the Board willcomprise: DirectorsJohn Leat (Executive Chairman)John Leat, aged 57, has wide business experience and from 1974 to 2001 managedthe business and personal affairs of the Al-Maktoum family, the ruling family ofDubai. He is currently a director of Global Gaming Technologies plc and Canispplc, both AIM quoted companies. William Dewsall (Chief Executive Officer)William Dewsall, aged 44, has over 24 years' experience in the UK insurancemarket and is currently registered with the FSA as an approved person forinsurance activities. After 11 years working for various Lloyds insurancebrokers William established his own company in 1998 to underwrite liability andcontractors all risks into the London market. Further information on William Dewsall is set out above. Joanna Barrett (Non-Executive Director)Joanna Barrett, aged 39, has over 22 years' experience in the finance industry,both in the money markets and metal exchanges. For the last eight years Joannahas worked in the offshore financial services industry specialising in theestablishment and running of trust and fiduciary structures. This role involvesacting on behalf of high net worth clients in both equity and structured financeinvestments. Joanna is a director of Corvus Capital Inc. Ian Tickler (Non-Executive Director)Ian Tickler, aged 63, is a qualified solicitor and was formerly senior partnerof Pickering Kenyon specialising in international commercial work. In 1982 hejoined Arthur Shaw & Company plc which was floated on the Unlisted SecuritiesMarket of the London Stock Exchange in 1988. He is currently managing directorof Regent Trust Company SA in Geneva, specialising in the establishment of trustand fiduciary structures. Mr Tickler is a director of Canisp plc and CorvusCapital Inc., both AIM quoted companies, as well as of a number of privatecompanies. Blaise Craven (Non-Executive Director)Blaise Craven, aged 50 is an entrepreneur with experience in establishing andrunning start up businesses. In 1974 he started his first business providingfurnishings and tropical plants to a number of City institutions. In 1977 hefounded Executive Sports, a corporate entertainment company and in 1978 heestablished BC Contracts, a business specialising in the design and furnishingof executive commercial and residential properties, which he ran until 2004. In2004 he was appointed as a non-executive director of Conival plc. The Board intends to make further appointments at executive level, as theCompany's business progresses and suitable candidates are identified, andintends in particular to appoint a finance director within six months ofCompletion. Senior managementIn addition to the Directors and Proposed Director, details of key seniormanagement personnel within the Enlarged Group are set out below: Werner Meissl (General Manager of Brown Duke)Werner Meissl's biographical details are described above. Peter Williams (Finance Director of Gable)Peter Williams, aged 38, qualified as a Chartered Accountant with PriceWaterhouse in London, England. His career includes corporate finance with ReaBrothers, Finance Director of Virtual Internet plc where he oversaw thecompany's AIM flotation, Finance Director of Gaming Corporation plc, an AIMlisted online-gaming company and consultancy roles with a number of internet,insurance and retail companies. In 2004, he was appointed a director of CVSManagement Limited, a wholly-owned subsidiary of Corvus Capital Inc. Principal terms of the AcquisitionPursuant to the Acquisition Agreement, the Company has agreed conditionally topurchase the entire issued share capital of Brown Duke from the Sellers inconsideration for the allotment and issue to the Sellers of 31,000,000 newOrdinary Shares equating to a value of approximately £3.953 million based on theclosing middle market price of an Ordinary Share of 12.75p on 2 December 2005,the latest practicable date prior to this announcement. The Acquisition isconditional upon, amongst other things, the approval of Shareholders at the EGM. Details of the Placing and use of proceedsThe Company is proposing to issue 38,000,000 Placing Shares pursuant to thePlacing at the Placing Price to raise £4,750,000 before expenses (approximately£4,400,000 net of expenses). Of the net proceeds of the Placing, approximately £4,200,000 will be used tocapitalise Brown Duke with the Minimum Solvency Capital in order for Brown Duketo obtain the Insurance Authorisation. The balance of the proceeds of thePlacing will be used to provide the Enlarged Group with additional funding forits ongoing working capital requirements. The Placing Shares will represent approximately 34.11 per cent. of the EnlargedShare Capital of the Company following Admission, will be fully paid upon issueand will rank equally in all respects with the Existing Ordinary Shares and theAcquisition Shares. John Leat, Ian Tickler and Joanna Barrett are subscribing for, in aggregate,120,000 new Ordinary Shares pursuant to the Placing. On Completion, the Directors and Proposed Director will hold 20.13 per cent. inaggregate of the Enlarged Share Capital. The Company, the Directors and Proposed Director have entered into the PlacingAgreement with Walker Crips. The Placing has been underwritten by Penkenna,which is also obliged to procure potential Placees. Geoffrey Conway-Henderson, adirector of Corvus Capital Inc., is the majority shareholder and a director ofPenkenna. The Placing is conditional, amongst others, upon Admission becomingeffective on or before 23 December 2005, or such later time and date as theCompany and Walker Crips may agree, but in any event not later than 13 January2006. The CommitmentAt the time of the Original Placing, which took place on the Company's admissionto AIM on 21 January 2005, Shareholders who subscribed at 5p per Ordinary Shareunder the Original Placing committed to subscribe for an aggregate 6,666,667further Ordinary Shares at a price of 15p per share, conditional upon thecompletion of the acquisition by the Company of a Target Company. Brown Duke is a Target Company and as a consequence Shareholders who subscribedunder the Original Placing are obliged to subscribe for new Ordinary Sharespursuant to the Commitment. The proposed fund raising by way of the Placing issignificantly in excess of the amount subject to the Commitment, and the PlacingPrice of 12.5p per share is below the Commitment price of 15p per share. Allplacees from the Original Placing have been approached in respect of the Placingat 12.5p and the Board has concluded that, in order to procure additionalfunding to enable the Acquisition to proceed, the requirement for such placeesto subscribe pursuant to the Placing should be waived. The Directors consider that shareholders should be given an opportunity toapprove their decision to waive the Commitment and, for this reason, the matteris to be proposed as a Resolution at the EGM. Dividend policyThe Ordinary Shares rank equally for all dividends and other distributionsdeclared, paid or made in respect of the ordinary share capital of the Company.The Company has not paid any dividends since incorporation. It is the Directors' and the Proposed Director's current intention to retain anyearnings arising from the Enlarged Group's activities to potentially fundfurther investments by the Enlarged Group and achieve capital growth. TheCompany has agreed with the FMA that Brown Duke will not pay dividends for thefirst three years of trading unless the Minimum Solvency Capital is exceeded by200 per cent. Accordingly, they do not intend to pay dividends in the immediatefuture. The declaration and payment by the Company of any future dividends andthe amount of such dividends will depend upon the Company's financial condition,future prospects, profits legally available for distribution and other factorsdeemed by the Board to be relevant at that time. Lock-in and orderly market arrangementsEach of the Directors, the Sellers (including the Proposed Director) and CorvusCapital Inc. have undertaken pursuant to Rule 7 of the AIM Rules to the Company,Strand Partners and Walker Crips that, except in certain limited circumstances,they will not dispose of any interest in the Ordinary Shares held by them for aperiod of twelve months from the date of Admission and, for the following twelvemonths, that they will only dispose of their holdings with the consent of theCompany's broker and nominated adviser from time to time. Non-applicability of the City Code on Takeovers and Mergers As the Company is not resident in the UK, the Channel Islands or the Isle of Manit is not subject to the City Code. The Company has, however, endeavoured, whereappropriate, to prepare its admission document substantially in compliance withthe spirit of the City Code. Third parties will not be obliged, and the Companywill not be able to compel them to comply with the City Code. As such investorsshould note, in particular, the paragraph below on Rule 9 of the City Code. Rule 9 of the City Code normally requires any person (or group of persons actingin concert) that acquires shares which, taken together with shares already held,carry 30 per cent. or more of the voting rights of a company to offer to acquirethe balance of the equity share capital. Rule 9 of the City Code also normallyrequires any person who, together with persons acting in concert with him, holdsbetween 30 per cent. and 50 per cent. of a company's voting rights and whoacquires additional shares which increases his holding of voting rights to makesuch a mandatory offer. As the Company is not a company to which the City Codeapplies, investors should be aware that Shareholders are and will be entitled toincrease their holding of voting rights in the Company above 30 per cent.without incurring any obligation to make a mandatory offer under the City Codeas would normally arise were the Company subject to the provisions of the CityCode. Extraordinary general meetingIn order to give effect to the Acquisition and to approve other elements of theProposals, an EGM is being convened for 22 December 2005. Under the AIM Rules, if Shareholders approve the Acquisition at the EGM, theCompany will be admitted to AIM as a new applicant on the first business dayafter the EGM. If Shareholder approval is not given, trading in the ExistingOrdinary Shares will continue as normal. Admission DocumentThe admission document setting out details of the Proposals and including anotice of the EGM, accompanied by a form of proxy (or form of direction asapplicable), was posted to Shareholders yesterday. Copies of the admission document are available to the public free of charge atthe offices of Fladgate Fielder at 25 North Row, London, W1K 6DJ during normalbusiness hours on any weekday (other than Saturdays and public holdings), untilone month following the date of Admission. Expected timetable of principal events Payment to be received from Placees pursuant to the 19 DecemberPlacing in cleared funds 2005 Latest time and date for receipt of forms of direction 11 a.m on 19 GMT December 2005 Latest time and date for receipt of forms of proxy 11 a.m on 20 GMT December 2005 Extraordinary General Meeting 11 a.m on 22 GMT December 2005 Admission effective and dealings expected to commence in 23 Decemberthe Enlarged Share Capital on AIM 2005 Completion of the Acquisition 23 December 2005 CREST accounts expected to be credited with Depositary 23 DecemberInterests in respect of the Placing Shares 2005 Definitive share certificates for the Placing Shares 6 Januaryexpected to be despatched by 2006 Enquiries: John BickTel: (020) 7451 9800 The Placing is not being made, directly or indirectly, in or into the UnitedStates, Canada, Australia, Republic of South Africa or Japan or any otherjurisdiction in which such Placing or solicitation is unlawful. Accordingly,this announcement is not being and should not be released or otherwisedistributed or sent in, into or from the United States, Canada, Australia,Republic of South Africa or Japan, or any other jurisdiction where to do sowould be in breach of any applicable law and/or regulation. The new OrdinaryShares to be allotted pursuant to the Acquisition and the Placing have not beenand will not be registered under the Securities Act or under the relevantsecurities laws of any state or other jurisdiction of the United States, Canada,Australia, Republic of South Africa or Japan. Accordingly, the new OrdinaryShares to be allotted pursuant to the Acquisition and the Placing may not(unless an exemption under the Securities Act or other relevant securities lawsis available) be offered, sold, re-sold or delivered, directly or indirectly,in, into or from the United States, Canada, Australia, Republic of South Africa,Japan or any other jurisdiction where this would constitute a violation of therelevant laws of, or require registration thereof in, such a jurisdiction or to,or for the account or benefit of, any US persons or a person in, or resident ofCanada, Australia, Republic of South Africa or Japan. Strand Partners, which is authorised and regulated in the United Kingdom by theFinancial Services Authority, is acting as nominated adviser to the Company inconnection with the proposed admission of the Enlarged Share Capital to tradingon AIM. Its responsibilities as the Company's nominated adviser under the AIMRules are owed solely to the London Stock Exchange and are not owed to theCompany or to any Director or to any other person in respect of his decision toacquire shares in the Company in reliance on any part of this announcement.Walker Crips, which is authorised and regulated in the United Kingdom by theFinancial Services Authority and is a member of the London Stock Exchange, isacting as broker to the Company in connection with the Placing and proposedadmission of the Enlarged Share Capital to trading on AIM. Strand Partners andWalker Crips are not acting for anyone else and will not be responsible toanyone other than the Company for providing the protections afforded to theirclients or for providing advice in relation to the contents of this announcementor the Placing or the Admission of the Enlarged Share Capital to trading on AIM.No representation or warranty, express or implied, is made by either StrandPartners or Walker Crips as to the contents of this announcement, withoutlimiting the statutory rights of any person to whom this announcement is issued.The information contained in this announcement is not intended to inform or berelied upon by any subsequent purchasers of Ordinary Shares (whether on or offexchange) and accordingly no duty of care is accepted in relation to them. This announcement does not constitute, or form part of, an offer or aninvitation to purchase any securities. DEFINITIONS The following definitions apply throughout this announcement, unless the contextrequires otherwise: "Acquisition" the proposed acquisition by the Company of the entire issued share capital of Brown Duke pursuant to the Acquisition Agreement"Acquisition the conditional agreement dated 5 December 2005 between theAgreement" Company and the Sellers relating to the Acquisition, details of which are set out in the admission document"Acquisition the 31,000,000 Ordinary Shares in the Company to be allottedShares" and issued to the Sellers pursuant to the Acquisition Agreement"Act" or "CA the Companies Act 1985, as amended1985""Admission" the effective admission of the Enlarged Share Capital of the Company to trading on AIM in accordance with the AIM Rules"AIM" the AIM market operated by the London Stock Exchange"AIM Rules" the rules applicable to companies whose shares are traded on AIM published by the London Stock Exchange from time to time"ASAG" Assurance Services AG"Board" the directors of the Company from time to time"Brown Duke" Brown Duke AG, registered in Liechtenstein with number FL-0002.161.375-6, which following completion of the Proposals will be renamed Gable Insurance AG"City Code" the City Code on Takeovers and Mergers"Commitment" the obligation, made at the time of the Original Placing, of certain persons to subscribe for further Ordinary Shares, further details of which are set out in the admission document"Commitment the proposed waiver of the Commitment, further details of whichWaiver" are set out in this announcement"Company" or Gable Holdings Inc., incorporated and registered in the Cayman"Gable" Islands with number 141760"Conditional the confirmation to be obtained from the FMA that, uponInsurance capitalisation of Brown Duke with the Minimum Solvency CapitalAuthorisation" and other procedural matters, it will grant the Insurance Authorisation"Completion" completion of the Proposals"CREST" the system for paperless settlement of trades and the holding of uncertificated securities administered by CRESTCo Limited"Depositary interests in uncertificated form, representing Ordinary Shares,Interests" that can be settled electronically through and held in CREST, as issued by Capita IRG Trustees Limited who hold the underlying securities on trust, further details of which are set out in the admission document"Directors" the directors of the Company as at the date of this announcement"EEA State" a state which is a contracting party to the agreement on the European Economic Area signed at Oporto on 2 May 1992 as it has effect for the time being"Enlarged together, the Company, Gable Underwriting and Brown DukeGroup" following Completion"Enlarged Share the issued ordinary share capital of the Company immediatelyCapital" following completion of the Acquisition and the Placing"Existing the 42,400,000 Ordinary Shares in issue at the date of thisOrdinary announcementShares""EU the First Non-Life Directive, the Second Non-Life Directive andDirectives" the Third Non-Life Directive"Extraordinary the extraordinary general meeting of the Company, notice ofGeneral Meeting" which is set out at the end of the admission documentor "EGM""First Non-Life the Council Directive 73/239/EC, as amendedDirective""FMA" the Financial Marketing Authority (Finanzmarktaufsicht) of Liechtenstein or any successor or other body fulfilling similar functions"FSA" the Financial Services Authority of the United Kingdom"Gable Gable Underwriting Agency Limited, registered in England andUnderwriting" Wales with number 5582165"Hogarth" Hogarth Underwriting Agencies Limited, registered in England and Wales with number 3917956"IFSRA" the Irish Financial Services Regulatory Authority"Insurance the authorisation from the FMA to undertake insurance businessAuthorisation" in Liechentenstein which has been applied for by Brown Duke"Ireland" the Republic of Ireland"London Stock London Stock Exchange plcExchange""Minimum SFr 9.5 million of paid up share capital, equivalent toSolvency approximately £4.2 million and inclusive of SFr 500,000Capital" organisational fund (working capital)"Ordinary ordinary shares of 0.25p each in the capital of the CompanyShares""Original the placing of 20,000,000 Ordinary Shares at a placing price ofPlacing" 5p per share which was effected at the time of the Company's admission to AIM on 21 January 2005"Passporting" the process pursuant to the EU Directives by which a firm incorporated in an EEA State which is authorised by the regulator in their home EEA State to carry on certain regulated activities in that EEA State, can apply to their home regulator for authorisation to establish a branch office or to carry on regulated activities direct in another EEA State"Penkenna" Penkenna Limited, registered in the British Virgin Islands, with its registered office at Palm Grove House, PO Box 438, Road Town, Tortola, British Virgin Islands"Placees" subscribers for Placing Shares"Placing" the proposed conditional placing of the Placing Shares by Walker Crips at the Placing Price pursuant to the Placing Agreement"Placing the conditional agreement dated 5 December 2005 between theAgreement" Company (1), Walker Crips (2) and the Directors and the Proposed Director (3), further details of which are set out in the admission document"Placing 12.5p per Placing SharePrice""Placing the 38,000,000 new Ordinary Shares which are proposed to beShares" issued pursuant to the Placing"Proposals" together the Acquisition, the appointment of the Proposed Director, the Commitment Waiver, the Placing and Admission"Proposed William Albert DewsallDirector""Resolutions" the resolutions to be proposed at the EGM as set out in the notice of EGM at the end of the admission document and reference to a "Resolution" is to the relevant resolution set out in the notice of EGM"Second Non-Life the Council Directive 88/357/EEC, as amendedDirective""Sellers" the shareholders in Brown Duke at the date of this announcement, being William Dewsall, Barry Clementson and Ron Brown"SFr" Swiss francs, the lawful currency of Switzerland"Shareholders" holders of Ordinary Shares"Strand Strand Partners Limited, the Company's nominated adviserPartners""subsidiary" or have the meanings given to them by the Act"subsidiaryundertaking""Target Company" a company that is an insurance, reinsurance or specialisedor "Target underwriting agency company, whose characteristics match theCompanies" investment strategy of the Company set out in Part 1 of the admission document issued by the Company on 6 January 2005"Third Non-Life the Council Directive 92/49/EEC, as amendedDirective""UK" or "United the United Kingdom of Great Britain and Northern IrelandKingdom""United States" the United States of America, its territories and possessions,or "US" any state of the United States of America and the district of Columbia and all other areas subject to its jurisdiction"US person" a citizen or permanent resident of the United States, as defined in Regulation S promulgated under the US Securities Act 1933"Walker Crips" Walker Crips Stockbrokers Limited, the Company's broker Throughout this announcement, 1 SFr = £0.4382. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
GAH.L