CMA approves Aljazira Takaful’s capital hike request to merge with Solidarity

Aljazira Takaful and Solidarity logos

The Saudi Capital Market Authority (CMA) approved on Wednesday Aljazira Takaful Taawuni Co.’s request to increase its capital from SAR 350 million to SAR 470.66 million by issuing 12.07 million ordinary shares to merge with Solidarity Saudi Takaful Co., and transfer Aljazira Takaful’s assets and liabilities to Solidarity through a securities exchange offer.

The authority said in a statement that Aljazira Takaful’s capital increase shareholder circular will be published within sufficient time before the extraordinary general assembly meeting (EGM).

The CMA added that the shareholder circular must include all relevant information shareholders need to know before making an informed decision when voting on the capital hike for the purpose described, including the increase in capital and risk factors.

The CMA resolution included the approval of the proposed offer timetable, as well as approval of the publication of the offer document by Aljazira Takaful to Solidarity shareholders to merge Solidarity into Aljazira Takaful through a securities exchange offer.

The offer document of Aljazira Takaful will be published to Solidarity shareholders to merge Solidarity into Aljazira Takaful in advance before the EGM of Solidarity.

The offer document must include all relevant information that the shareholders need to know before making an informed decision when voting on the offer, including the offer information and risk factors.

The CMA added that if Aljazira Takaful shareholders approve the capital increase, and Solidarity shareholders accepte the offer in their EGM, the new shares will be issued to Solidarity shareholders who are registered in the Securities Depository Center Company. The shares of Solidarity will be delisted from the Saudi Stock Exchange (Tadawul) when the merger decision becomes effective.

A voting decision without reading the shareholders circular and the offer document carefully reviewing its content may involve high risks.

Therefore, the shareholder should carefully read the shareholders circular and the offer document to be able to reach a proper voting decision, the statement said, adding that if the shareholders circular and offer document prove difficult to understand, it is recommended to consult with an authorized financial advisor.

The CMA’s approval should never be considered as an endorsement of the merger’s feasibility. The CMA's approval of the application merely means that the legal requirements as per the Capital Market Law and its Implementing Regulations have been met, the statement added.

According to data available with Argaam, Aljazira Takaful inked a binding merger agreement with Solidarity Takaful on August 23, 2020.