SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE
13E-3
(Rule 13e-100)
TRANSACTION STATEMENT UNDER SECTION 13(E) OF THE
SECURITIES EXCHANGE ACT OF 1934 AND
RULE 13e-3 THEREUNDER
Rule 13e-3 Transaction Statement Under Section 13(e)
of the Securities Exchange Act of 1934
ADMINISTRADORA DE
FONDOS DEPENSIONES PROVIDA S.A.
(Provida Pension Fund Administrator)
(Name of Issuer)
MetLife, Inc.
and its indirect wholly-owned subsidiary
MetLife Chile Inversiones Limitada
(Name of Persons Filing Statement)
SHARES OF COMMON STOCK, WITHOUT PAR VALUE
(Title of Class of Securities)
020304634
(CUSIP Number
of Class of Securities)
Brian V. Breheny
Skadden, Arps, Slate, Meagher & Flom LLP
1440 New York Avenue, N.W.
Washington, D.C. 20005
Telephone: (202) 371-7000
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of the Persons Filing Statement)
With a copy to:
Paola Lozano
Skadden,
Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
Telephone: (212) 735-3000
This statement is filed in connection with (check the appropriate box):
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a. |
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The filing of solicitation materials on an information statement subject to Regulation 14A, Regulation 14C or Rule 13e-3(c) under the Securities Exchange Act of 1934. |
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b. |
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The filing of a registration statement under the Securities Act of 1933. |
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c. |
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A tender offer. |
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d. |
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None of the above. |
Check the following box if the soliciting materials or information statement referred to in checking box (a) are
preliminary copies: ¨
Check the following box if the filing is a final amendment reporting the
results of the transaction: ¨
Calculation of Filing Fee
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Transaction Valuation* |
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Amount of Filing Fee** |
$27,459,678.31 |
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$3,190.81 |
* |
Estimated solely for purposes of calculating the filing fee. The Transaction Valuation was determined by multiplying (i) U.S. $5.51, the maximum price per share of common stock of Administradora de Fondos de
Pensiones Provida S.A. (each a Common Share and together the Common Shares) to be paid in the transaction (based on a maximum price per Common Share of Ch$3,300.00, pursuant to the Share Purchase Agreement between MetLife
Chile Inversiones Limitada and The Bank of New York Mellon, dated as of May 12, 2015, and using the Official Exchange Rate (dólar observado) of Ch$598.40 per US$1.00 as published by the Chilean Central Bank on May 15, 2015) by
(ii) 4,979,355, the estimated maximum number of Common Shares that may be acquired in the transaction. |
** |
The amount of the filing fee is calculated in accordance with Rule 0-11 of the Securities Exchange Act of 1934, as amended, and Fee Rate Advisory No. 1 for Fiscal Year 2015 issued by the Securities and Exchange
Commission on August 29, 2014 by multiplying the Transaction Valuation above by 0.0001162. |
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Check the box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration
statement number, or the Form or Schedule, and the date of its filing. |
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Amount Previously Paid: N/A |
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Filing Party: N/A |
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Form or Registration No.: N/A |
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Date Filed: N/A |
Neither the Securities and Exchange Commission nor any state securities commission has: approved or disapproved of the
transaction; passed upon the merits or fairness of the transaction; or passed upon the adequacy or accuracy of the disclosure in the document. Any representation to the contrary is a criminal offense.
Introduction
This Rule 13e-3 Transaction Statement on Schedule 13E-3 together with the exhibits hereto (this Transaction Statement) is being
filed with the Securities and Exchange Commission (the SEC) pursuant to Section 13(e) of the Securities Exchange Act of 1934, as amended (the Exchange Act), and Rule 13e-3 thereunder by MetLife Chile Inversiones
Limitada, a Chilean limited liability company (sociedad de responsabilidad limitada) (Purchaser). Purchaser is an indirect wholly-owned subsidiary of MetLife, Inc., a Delaware corporation (MetLife, and collectively
with Purchaser, the Filing Persons). This Transaction Statement relates to the Share Purchase Agreement, dated as of May 12, 2015 (the Purchase Agreement), between Purchaser and The Bank of New York Mellon (BNY
Mellon), as depositary under the Deposit Agreement (as defined below), that provides, among other things, for the purchase by Purchaser of all of the Common Shares of Administradora de Fondos de Pensiones Provida S.A., a Chilean corporation
(ProVida or the Company), held as of the Closing Date (as defined below) by BNY Mellon in its capacity as depositary of the ADR Program (as defined below) pursuant to the Deposit Agreement (the Subject Shares).
Under the terms of the Purchase Agreement, subject to the satisfaction or waiver of certain conditions, Purchaser will acquire all the Subject Shares for a purchase price per Subject Share equal to the volume weighted average price at which the
Common Shares have traded on the Santiago Stock Exchange (Bolsa de Comercio de Santiago) during the period beginning on May 7, 2015 and ending on the 3rd business day prior to the Closing Date (the Per Share Consideration),
except that the purchase price per Subject Share shall in no event be less than Ch$3,092.05 or more than Ch$3,300.00, unless Purchaser exercises its right to match a higher purchase price Subject Share under a Superior Proposal (as defined below),
in each case without interest or adjustment (the Transaction). A copy of the Purchase Agreement is filed as an exhibit to this Transaction Statement.
In this Transaction Statement, references to $, dollars, USD, US$ or U.S. dollars
are to United States dollars; references to ThUS$ are thousands of US dollars and MUS$ are millions of US dollars; references to pesos or Ch$ are to Chilean pesos; and references to Ch$
million or MCh$ are to millions of Chilean pesos.
On October 1, 2013, MetLife Chile Acquisition Co. S.A., an
indirect wholly-owned subsidiary of MetLife (MetLife Chile Acquisition), and its affiliates completed the acquisition of 91.38% of the total outstanding shares of ProVida, pursuant to a transaction agreement with, among others, Banco
Bilbao Vizcaya Argentaria, S.A. (BBVA), dated as of February 1, 2013 (the Transaction Agreement); specifically, BBVA caused the transfer to MetLife Chile Acquisition and Inversiones MetLife Holdco Tres Limitada, a
subsidiary of MetLife (Holdco 3), of 51.6% of the outstanding shares of the Company then held by an indirect wholly-owned subsidiary of BBVA. Simultaneously, MetLife Chile Acquisition conducted a public cash tender offer in the United
States and a public cash tender offer in Chile (respectively, the U.S. Offer and the Chilean Offer and, collectively, the Offers), through which MetLife acquired an additional 39.8% of the then outstanding shares
of the Company. Subsequent to the completion of the Offers, MetLife has continued to acquire additional shares of the Company through open market purchases and privately negotiated transactions. Pursuant to Rule 13e-3, each of these subsequent
transactions were exempt from the requirements of Rule 13e-3 as transactions occurring within one year of the date of the termination of the U.S. Offer. Such exception expired on September 28, 2014, the first anniversary of the termination of
the U.S. Offer. As of May 12, 2015, MetLife, through MetLife Chile Acquisition, owned 93.2% of the total outstanding Shares (as defined below) of the Company.
On September 18, 2014, the deposit agreement among the Company, BNY Mellon, as depositary (the Depositary), and holders of
American Depositary Shares (ADSs) representing shares of common stock of the Company (Common Shares and together with the ADSs, the Shares), dated as of November 22, 1994, as amended and restated as of
February 7, 1996, as further amended and restated as of August 19, 1999 (the Deposit Agreement), governing the Companys American depositary receipt program (ADR Program) was terminated. Pursuant to the terms
of the Deposit Agreement, at any time after March 18, 2015, the Depositary may sell at public or private sale, at such place or places and upon such terms as it may deem proper, the Common Shares held by BNY Mellon in its capacity as depositary
of the ADR Program and thereafter hold the net proceeds of such sale, together with any other cash then held by the Depositary under the Deposit Agreement, for the pro rata benefit of holders of ADSs which have not been surrendered.
1
On November 14, 2014, MetLife Chile Acquisition, Inversiones MetLife Holdco Dos Limitada
(Holdco 2), Holdco 3 and Purchaser (collectively with MetLife Chile Acquisition, Holdco 2 and Holdco 3, the Merger Agreement Parties) entered into a merger agreement with respect to the Company (the Merger
Agreement). Pursuant to the Merger Agreement, subject to the satisfaction or waiver of certain conditions, the Merger Agreement Parties agreed to merge the Company with and into MetLife Chile Acquisition, with MetLife Chile Acquisition being
the surviving entity (the Merger). On December 29, 2014, the shareholders of each of the Company and MetLife Chile Acquisition approved the Merger. As of May 15, 2015, the Merger has not been consummated as it needs to be approved
by the Chilean Pension Funds Superintendency (SP). If the Merger is consummated prior to the closing of the Transaction, Purchaser shall be entitled to receive the merger consideration (or the right thereto) of one share of common stock
of the surviving entity of the Merger for each Common Share as a substitute for the Subject Shares, pursuant to the Purchase Agreement.
By filing this Transaction Statement, the Filing Persons do not concede that Exchange Act Rule 13e-3 is applicable to the Transaction or any
other future purchases of Common Shares of the Company.
Item 1. |
Summary Term Sheet |
This summary term sheet provides the following information about the
Transaction:
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Principal Terms of the Transaction: Pursuant to the Purchase Agreement, on the 3rd business day after the satisfaction or waiver of certain conditions (the Closing Date), Purchaser will purchase the
Subject Shares at a per Subject Share price equal to the Per Share Consideration, except that the purchase price per Subject Share shall in no event be less than Ch$3,092.05 or more than Ch$3,300.00, unless Purchaser exercises its right to match a
higher purchase price per Subject Share under a Superior Proposal, in each case without interest or adjustment. If the Merger is consummated prior to the closing of the Transaction, Purchaser shall be entitled to receive the merger consideration (or
the right thereto) of one share of common stock of the surviving entity of the Merger for each Common Share as a substitute for the Subject Shares, pursuant to the Purchase Agreement. See Item 4. Terms of the Transaction Material
Terms beginning on page 6. |
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Filing Persons: As of May 12, 2015, the Filing Persons beneficially owned 93.2% of the total outstanding Common Shares of the Company, including Common Shares represented by ADSs. |
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Payment for Common Shares: Purchaser will use its existing cash balance to fund the Transaction. See Item 10. Source and Amounts of Funds or Other Consideration beginning on page 26.
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Appraisal Rights: The Companys shareholders will not have any appraisal rights under Chilean law or under the Companys bylaws in connection with the Transaction, and neither the Company nor the Filing
Persons will independently provide the Companys shareholders with any such rights. See Item 4. Terms of the Transaction Appraisal Rights beginning on page 7. |
Special Factors
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Purpose of the Transaction: The purpose of the Transaction is for MetLife, through Purchaser, to acquire all of the Subject Shares. See Item 7. Purposes, Alternatives, Reasons and Effects
Purposes beginning on page 13. |
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Alternatives to the Transaction: In the event that MetLife, through Purchaser, could not acquire the Subject Shares pursuant to the Purchase Agreement, MetLife may consider the acquisition of the Subject Shares
through open market purchases or privately negotiated transactions. See Item 7. Purposes, Alternatives, Reasons and Effects Alternatives beginning on page 13. |
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Reasons for the Transaction: Further MetLifes acquisition of up to 100% of the Common Shares. The Transaction provides greater certainty in acquiring all of the Subject Shares. See Item 7. Purposes,
Alternatives, Reasons and Effects Reasons beginning on page 13. |
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Effects of the Transaction: The Subject Shares represent approximately 1.5% of the outstanding Common Shares. If the Transaction is consummated, MetLife, through its affiliates, will increase its interest in the
Company from approximately 93.2% of the Common Shares, as of May 12, 2015, to a maximum of approximately 94.7% of the Common Shares. The Transaction will not result in a change of control of the Company. |
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General: Upon consummation of the Transaction, MetLife will increase its aggregate, indirect beneficial ownership in the Company from approximately 93.2% of the Common Shares, as of May 12, 2015, to a
maximum of approximately 94.7% of the Common Shares. See Item 7. Purposes, Alternatives, Reasons and Effects Effects General beginning on page 13. |
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Company: As previously disclosed, MetLife may cause the Company to terminate the Companys registration under the Exchange Act and suspend the Companys obligation to file reports under
Section 15(d) of the Exchange Act. The Transaction will not have the effect of causing the Common Shares to become eligible for deregistration pursuant to Section 12(g) of the Exchange Act or the public reporting obligations of the Company
pursuant to the Section 13(a) of the Exchange Act to be eligible for suspension or termination. Following the Transaction, the Common Shares will continue to be listed on the Chilean Exchanges (as defined below). The Common Shares are no longer
listed on any other securities markets and no such listing is expected. See Item 7. Purposes, Alternatives, Reasons and Effects Effects Effects on the Company beginning on page 14. |
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Unaffiliated Shareholders: Following the Transaction, unaffiliated shareholders of the Company who did not beneficially own Subject Shares will continue to hold their Common Shares and may thereafter continue to
hold them or sell them at any time in the open market or in privately negotiated transactions. Shareholders of the Company may be able to exercise limited withdrawal rights in accordance with Chilean law if, at any time following the Transaction,
MetLife directly or indirectly holds in the aggregate more than 95.0% of the then outstanding Common Shares. |
Pursuant to
the Deposit Agreement, unaffiliated shareholders who beneficially own Subject Shares as of the Closing Date and have not surrendered their ADSs to the Depositary in accordance with the Deposit Agreement will no longer have a right to receive Common
Shares upon surrender of their ADSs. Instead they will be entitled to receive, upon surrender of their ADSs to the Depositary in accordance with the Deposit Agreement, the Per Share Consideration net of any and all applicable taxes or government
charges, commissions, fees and other expenses under applicable law and the Deposit Agreement. In accordance with the Deposit Agreement and the Purchase Agreement, unaffiliated beneficial owners of the Subject Shares will continue to have the right
to receive Common Shares upon surrender of their ADSs at any time prior to the end of the 3rd business day prior to the Closing Date. See Item 7. Purposes, Alternatives, Reasons and Effects Effects Effect of the Transaction on
Unaffiliated Shareholders beginning on page 14.
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Fairness of the Transaction: The Filing Persons reasonably believe that the Transaction is fair to unaffiliated shareholders. In making this determination, the Filing Persons considered many factors, including
the fairness opinion of Ernst & Young Investment Advisers LLP (EYIA) that the Per Share Consideration to be paid by Purchaser to BNY Mellon is fair to the unaffiliated beneficial owners of the Subject Shares from a financial
point of view. See Item 8. Fairness of the Transaction and Item 9. Reports, Opinions, Appraisals and Negotiations beginning on page 17 and 20, respectively. |
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Shareholder and Board of Directors Approval: The Company is not a party to the Purchase Agreement. The Transaction does not require approval by the shareholders, the board of directors of the Company or any
independent committee thereof. Pursuant to the terms of the Deposit Agreement, at any time after March 18, 2015, the Depositary may sell at public or private sale, at such place or places and upon such terms as it may deem proper, the Common
Shares held by it as depositary of the ADR Program. See Item 8. Fairness of the Transaction Approval of Security Holders and Item 8. Fairness of the Transaction Approval of Directors on page 20.
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Dissemination of Information: A disclosure document in the form of this Transaction Statement will be
distributed to all U.S. Company shareholders of record and posted on the Companys website, www.provida.cl. The disclosure document will be distributed and posted after the day of filing of this Transaction Statement with the SEC.
For More Information: If you have any questions about the Transaction, you should contact the Depositary by telephone at (866) 256-2247.
Item 2. |
Company Information |
(a) Name and Address.
The Companys name is Administradora de Fondos de Pensiones Provida S.A. The Companys executive offices are located at Avenida
Pedro de Valdivia 100, Santiago, Chile. The Companys telephone number is 562-2697-0040.
(b) Securities.
The exact title of the class of the subject equity securities is Common Stock, without nominal (par) value. As of March 31,
2015, there were 331,316,623 outstanding Common Shares (including Common Shares held in treasury by the Company, which are considered outstanding under Chilean law until the earlier of (i) one year from the date on which the Company acquired
them (when in accordance with Chilean law such treasury shares are automatically deemed cancelled and no longer issued and outstanding) or (ii) the date on which the Company retires them as a result of the shareholders of the Company approving
a resolution to such effect by means of a majority vote. While such treasury shares are deemed issued and outstanding under Chilean law and counted as such for, among other things, the limited withdrawal rights of shareholders upon accumulation of
more than 95.0% of the shares of the Company by the controlling shareholder, they do not have voting rights, do not have rights to receive dividends or preemptive rights in connection with a capital increase and are not counted for
shareholders meetings quorum purposes.
(c) Trading Market and Price.
Common Shares trade on the Santiago Stock Exchange (Bolsa de Comercio de Santiago), the Chilean Electronic Stock Exchange (Bolsa
Electrónica de Chile) and the Valparaiso Stock Exchange (Bolsa de Valores de Valparaiso) (collectively, the Chilean Exchanges). The table below shows, for each quarter during the past two years, the quarterly high and
low trading prices in pesos per Common Share listed on the Santiago Stock Exchange, the principal market in which Common Shares are traded:
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Santiago Stock Exchange
(Ch$ per Common Share(1)) |
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Quarter Ended |
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Low |
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March 31, 2013 |
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3,500.00 |
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3,190.40 |
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June 30, 2013 |
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3,397.30 |
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2,859.40 |
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September 30, 2013 |
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3,202.00 |
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2,860.10 |
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December 31, 2013 |
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3,100.00 |
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2,825.00 |
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March 31, 2014 |
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3,260.00 |
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3,050.00 |
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June 30, 2014 |
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3,520.00 |
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3,205.00 |
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September 30, 2014 |
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3,690.40 |
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3,250.00 |
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December 31, 2014 |
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3,689.50 |
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3,180.00 |
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March 31, 2015 |
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3,526.70 |
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2,900.00 |
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June 30, 2015 (through May 15, 2015) |
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3,250.00 |
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2,910.00 |
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(1) |
Pesos per Common Share reflect the nominal closing price on the trade date. |
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(d) Dividends.
Under Chilean Law 18,046 on Corporations, as amended (the Corporations Law), unless unanimously agreed otherwise by the holders of
all issued Shares, the Company must distribute a cash dividend for an amount equivalent to at least 30% of net profits for the year. The Company paid a dividend of Ch$214.00 and Ch$248.51 per Common Share on May 30, 2013, Ch$82.921 per Common
Share on September 4, 2013 and Ch$126.845 per Common Share on May 23, 2014 to its shareholders. The Company will pay a dividend of Ch$174.00 per Common Share on May 28, 2015 to its shareholders of record on May 22, 2015.
Consummation of the Purchase Agreement is subject to, among others, the condition precedent that any and all dividends declared and approved by the Company prior to the date of the Purchase Agreement shall have been paid by the Company to the
holders of record thereof.
(e) Prior Public Offerings.
None.
(f) Prior Stock Purchases.
Following the completion of the Offers, at which point MetLife and its subsidiaries became affiliates of the Company, MetLife, through its
affiliates, has purchased an aggregate of 6,179,493 Common Shares, of which 637,308 Common Shares were purchased through open market purchases and 5,542,185 Common Shares were purchased through seven privately negotiated transactions. In the first
quarter of 2014, MetLife, through its affiliates, purchased 1,289,505 Common Shares (represented by 85,967 ADSs) at a price of $6.1476 per Common Share ($92.21 per ADS). In the second quarter of 2014, MetLife, through its affiliates, purchased
1,817,880 Common Shares (represented by 121,192 ADSs) at a price of $6.1476 per Common Share ($92.21 per ADS). In the third quarter of 2014, MetLife, through its affiliates, purchased 3,072,108 Common Shares (including Common Shares represented by
107,509 ADSs) at prices ranging from $6.1476 to $6.1679 per Common Share and for an average price of $6.1477 per Common Share ($92.21 per ADS). Pursuant to Rule 13e-3, each of these transactions following the completion of the Offers were exempt
from the requirements of Rule 13e-3 as transactions occurring within one year of the date of the termination of the U.S. Offer. Such exception expired on September 28, 2014, the first anniversary of the termination of the U.S. Offer. Neither
MetLife nor Purchaser has purchased any Common Shares since the third quarter of 2014.
Item 3. |
Identity and Background of Filing Persons |
(a) (c) Name and Address; Business and
Background of Entities; Business and Background of Natural Persons.
MetLifes executive offices are located at 200 Park Avenue,
New York, New York 10166. MetLifes telephone number is (212) 578-2211. Purchasers executive offices are located at Agustinas 640, 22nd floor, Santiago, Chile. Purchasers telephone number is +56 2 2826 3000.
MetLife is a Delaware corporation and, through its subsidiaries and affiliates, is a global provider of life insurance, annuities, employee
benefits and asset management. MetLife is an affiliate of the Company through its ownership of approximately 93.2% of the total outstanding Common Shares. Purchaser is a Chilean limited liability company and was formed by MetLife for the purpose of
developing all kinds of investments and businesses.
The name, business address, present principal occupation or employment (including the
name, principal business and address of any corporation or other organization in which such employment is conducted), material occupations, positions, offices or employment during the past five years (including the starting and ending dates of each
and the name, principal business and address of any corporation or other organization in which the occupation, position, office or employment was carried on) and country of citizenship of each executive officer of MetLife and Purchaser and each
director of MetLife are set forth on Schedules I and II attached hereto and are incorporated herein by reference.
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To the best knowledge of MetLife and Purchaser, none of MetLife, Purchaser or any of the persons
listed in Schedules I and II have been, during the past five (5) years, (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to any judicial or administrative proceeding during
the past five years (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state
securities laws, or a finding of any violation of federal or state securities laws.
Item 4. |
Terms of the Transaction |
(a) Material Terms.
Pursuant to the Purchase Agreement, subject to the terms and conditions set forth therein, Purchaser has agreed to purchase, and the Depositary
has agreed to sell, all Subject Shares. On the Closing Date, Purchaser will purchase the Subject Shares at a per Subject Share price equal to the Per Share Consideration, except that the purchase price per Subject Share shall in no event be less
than Ch$3,092.05 or more than Ch$3,300.00, unless Purchaser exercises its right to match a higher purchase price per Subject Share under a Superior Proposal, in each case without interest or adjustment. Notwithstanding the foregoing, if any third
party makes a bona fide unsolicited written proposal for all of the Subject Shares before the closing of the Transaction with a purchase price per Subject Share higher than the greater of (i) Ch$3,300.00 or (ii) the Per Share Consideration
as may be proposed to be amended by Purchaser pursuant to the Purchase Agreement (a Superior Proposal), Purchaser will have 10 business days following delivery by the Depositary of a notice of a Superior Proposal to deliver a notice to
the Depositary confirming that Purchaser would like to purchase the Subject Shares on substantially the same terms and conditions set forth in the notice of the Superior Proposal (a Match Right Notice). If the Merger is consummated prior
to the closing of the Transaction, Purchaser shall be entitled to receive the merger consideration (or the right thereto) of one share of common stock of the surviving entity of the Merger for each Common Share as a substitute for the Subject
Shares, pursuant to the Purchase Agreement.
Purchaser and the Depositary have each have made representations, warranties and covenants in
the Purchase Agreement. Subject to certain exceptions, Purchaser and the Depositary have agreed, among other things, to covenants relating to, in the case of Purchaser, the preparation and filing with the SEC of this Transaction Statement and, in
the case of the Depositary, not soliciting alternate proposals for any or all of the Subject Shares and cooperating with Purchaser in the preparation and dissemination of this Transaction Statement.
The completion of the Transaction is subject to certain conditions, including, among others: (i) the absence of any injunction,
restraining order or decree of any nature issued by any court, governmental authority or regulatory agency restraining or prohibiting the closing of the Transaction; (ii) the absence of any pending third-party litigation which is reasonably
expected to have a material adverse effect on the legality, validity or enforceability of the Purchase Agreement; (iii) the accuracy of the representations and warranties contained in the Purchase Agreement in all material respects;
(iv) the performance of the covenants contained in the Purchase Agreement in all material respects; (v) the absence of any material adverse effect with respect to the Company; (vi) the lapse of 30 days since the filing of this
Transaction Statement with the SEC and the lack of any outstanding comments from the SEC with respect to this Transaction Statement; and (vii) any and all dividends declared and approved by the Company prior to the date of the Purchase
Agreement shall have been paid by the Company to the holders of record thereof.
The Purchase Agreement contains certain termination
rights, including the right of Purchaser or the Depositary to terminate the Purchase Agreement if the closing of the Transaction has not occurred on or before September 9, 2015 and the right of the Depositary to terminate the Purchase Agreement
to accept a Superior Proposal if a definitive agreement for a Superior Proposal has been entered into and Purchaser has not delivered a Match Right Notice within 10 business days of the Depositarys delivery of a notice of a Superior Proposal
pursuant to the Purchase Agreement.
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The foregoing description of the Purchase Agreement is a summary and qualified in its entirety by
the terms of the Purchase Agreement, a copy of which is filed as an exhibit to this Transaction Statement and which is incorporated herein by reference.
(1) Tender Offers.
Not applicable.
(2) Mergers or Similar Transactions.
Not
applicable.
(c) Different Terms.
The Company is not a party to the Purchase Agreement. Under the Purchase Agreement, the Depositary will receive the Per Share Consideration
from Purchaser. Pursuant to the Deposit Agreement, the Depositary will hold such proceeds net of any and all taxes or government charges, commissions, fees and other expenses under applicable law and the Deposit Agreement for the benefit of holders
of ADSs who did not surrender such ADSs by the third business day prior to the Closing Date. The Common Shares of unaffiliated shareholders who do not own ADSs will not be affected by the Transaction.
(d) Appraisal Rights.
The Companys
shareholders will not have any appraisal rights under Chilean law or under the Companys bylaws in connection with Transaction, and neither the Company nor the Filing Persons will independently provide the Companys shareholders with any
such rights.
(e) Provisions for Unaffiliated Security Holders.
None.
(f) Eligibility for Listing or
Trading.
Not applicable.
Item 5. |
Past Contacts, Transactions, Negotiations and Agreements |
(a) Transactions.
Except as disclosed in this Transaction Statement, there have been no transactions that occurred during the past two years between the Filing
Persons (including the executive officers of MetLife and Purchaser and the directors of MetLife) and the Company (including its executive officers and directors) or any of its affiliates.
(b) Significant Corporate Events.
The information set forth below regarding BBVA and the Company was provided by those parties, and none of the Filing Persons or any of their
respective affiliates takes any responsibility for the accuracy or completeness of any information regarding events, meetings or discussions in which the Filing Persons or their respective affiliates or representatives did not participate. For a
review of the Companys activities relating to the Transaction Agreement and the Offers, please refer to the Companys Solicitation/Recommendation Statement on Schedule 14D-9 filed with the SEC on September 3, 2013 and as amended.
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On February 1, 2013, following several months of discussion, negotiations and diligence,
MetLife, BBVA and BBVA Inversiones Chile S.A. (BBVA Inversiones and together with BBVA, the BBVA Parties) entered into the Transaction Agreement providing for MetLifes acquisition of the Company. The Transaction
Agreement contained certain terms and conditions applicable to all shareholders of the Company, including terms related to pricing of the Offers, distribution of excess cash of the Company to all shareholders of the Company and the conditions
precedent to the commencement and closing of the Offers. The Transaction Agreement also contained certain terms and conditions negotiated and agreed by MetLife and BBVA that allocated certain risks between MetLife and the BBVA Parties, such as
indemnities offered by the BBVA Parties to MetLife for certain representations and warranties made by the BBVA Parties. On March 12, 2013, MetLife Chile Acquisition, a newly formed Chilean company wholly owned indirectly by MetLife, executed
the Share Purchaser Joinder Agreement to the Transaction Agreement, thereby becoming a party to the Transaction Agreement.
On
May 30, 2013, an Extraordinary Shareholders Meeting of the Company approved an extraordinary dividend of Chilean pesos 248.51 per Common Share, or approximately US$0.51 per Common Share (the Minority Interest Dividend), against
retained earnings from previous years, for a total amount of Chilean pesos 82,335,493,982, or approximately US$167,809,017, based on the exchange rate (dólar observado) published by the Chilean Central Bank (Banco Central de
Chile) in the Chilean Official Gazette as of May 30, 2013. The Minority Interest Dividend was paid in cash on May 30, 2013 to holders of Common Shares and ADSs of record on May 24, 2013, the record date for such distribution. This
dividend was made in connection with the obligation of BBVA pursuant to the Transaction Agreement to cause the Company to distribute an amount equal to the proceeds, net of taxes, of the sales of the interests of the Company in the Mexican and
Peruvian pension fund managers to all shareholders of the Company including minority shareholders.
On April 30, 2013, the Annual
Shareholders Meeting of the Company ratified the payment of an interim dividend of Chilean pesos 100.00 per Common Share, or approximately US$0.21 per Common Share based on the exchange rate (dólar observado) published by the
Chilean Central Bank (Banco Central de Chile) in the Chilean Official Gazette as of October 30, 2012, against fiscal year 2012 profits. This interim dividend had previously been paid in cash on October 30, 2012 to holders of Common
Shares and ADSs of record on October 24, 2012, the record date for such distribution. Also on April 30, 2013, the Annual Shareholders Meeting of the Company approved a dividend of Chilean pesos 214.00 per Common Share, or
approximately US$0.44 per Common Share based on the exchange rate (dólar observado) published by the Chilean Central Bank (Banco Central de Chile) in the Chilean Official Gazette as of May 30, 2013, which was paid on
May 30, 2013 to holders of Common Shares and ADSs of record on May 25, 2013, the record date for such distribution. Collectively, the two (2) dividends described in this paragraph constitute the 2012 Annual Profit Dividend.
MetLife Chile Acquisition and MetLife submitted regulatory applications for the authorization of MetLife Chile Acquisitions and
MetLifes proposed indirect acquisition of control over AFP Genesis Administradora de Fondos y Fideicomisos S.A. (Genesis), a subsidiary of the Company, to the Ecuadorian Superintendence for the Control of Market Power
(Superintendencia de Control del Poder de Mercado) on February 15, 2013, and for the authorization of MetLife Chile Acquisitions and MetLifes proposed acquisition of the Company to the SP on March 1, 2013. On
July 19, 2013, the SP authorized MetLife Chile Acquisitions and MetLifes proposed acquisition of the Company and on August 2, 2013, the Ecuadorian Superintendence for the Control of Market Power authorized MetLife Chile
Acquisitions and MetLifes proposed indirect acquisition of control over Genesis. On August 2, 2013, MetLife Chile Acquisition delivered to BBVA, pursuant to the Transaction Agreement, a notice confirming receipt of all required
regulatory approvals in connection with the Offers.
On August 27, 2013, the Company disclosed in its Current Report on Form 6-K that
an Extraordinary Shareholders Meeting held on August 27, 2013 resolved to pay an extraordinary dividend of Chilean pesos 82.9214 per Common Share (the Pre-launch Excess Cash Distribution), or approximately US$0.1622 per Common
Share, based on the exchange rate (dólar observado) published by the Chilean Central Bank (Banco
8
Central de Chile) in the Chilean Official Gazette as of August 27, 2013. The amount of the Pre-launch Excess Cash Distribution was determined in accordance with the Transaction
Agreement on the basis of a formula that takes into account, among other things, working capital, cash-in-hand and third party indebtedness of the Company as of June 30, 2013, the Balance Sheet Date, in each case, as defined and calculated
pursuant to the Transaction Agreement. The Pre-launch Excess Cash Distribution was intended, among other things, to provide all the Company shareholders, including shareholders other than BBVA, with their pro rata portion of the excess cash of the
Company as of the Balance Sheet Date, regardless of whether they tendered their Common Shares or ADSs into the Offers, and to avoid the purchase by MetLife of excess cash accumulated by the Company as of the Balance Sheet Date. The Pre-launch Excess
Cash Distribution was paid on September 4, 2013 to holders of Common Shares (including those in ADS form) registered as such in the shareholders registry of the Company on August 29, 2013 (the record date of such distribution). The price
payable by MetLife Chile Acquisition per Common Share or per ADS tendered into the Offers was not be adjusted as a result of the payment of the Pre-launch Excess Cash Distribution.
Pursuant to the Transaction Agreement, BBVA agreed not to permit the Company to declare or pay any dividend or make any other distribution to
its shareholders other than (x) the dividends that have been or were paid prior to consummation of the Offers and that are referred to as the Minority Interest Dividend, the 2012 Annual Profit Dividend and the Pre-launch Excess Cash
Distribution and (y) if applicable, an October 2013 interim dividend at a time and with a payout ratio consistent with past practice, in respect of 2013 profits of the Company earned prior to June 30, 2013.
The U.S. Offer and the Chilean Offer commenced on August 29, 2013.
On September 30, 2013, MetLife Chile Acquisition announced on a Schedule TO-T/A filed with the SEC that it had accepted for payment all
of the ADSs and Common Shares that were tendered in the U.S. Offer. On the same date, MetLife Chile Acquisition announced in Chile that it had accepted for payment all of the Common Shares that were tendered in the Chilean Offer. On or around
October 1, 2013, as a result of the Offers, MetLife Chile Acquisition acquired 131,725,750 Common Shares (including those represented by ADSs), representing approximately 39.8% of the outstanding Common Shares, including the 42,076,485 Common
Shares then held in the form of ADSs by BBVA.
On October 1, 2013, simultaneously with payment for the ADSs and Common Shares validly
tendered and not withdrawn in the Offers, BBVA caused the transfer to MetLife Chile Acquisition and Holdco 3 of 100% of the issued and outstanding shares of capital stock of Inversiones Previsionales S.A. (Inversiones Previsionales),
thereby transferring indirectly the 171,023,573 Common Shares held by Inversiones Previsionales, representing approximately 51.6% of the outstanding Common Shares. MetLife Chile Acquisition paid BBVA the same price per Common Share and per ADS as
paid by MetLife Chile Acquisition to holders of Common Shares and ADSs pursuant to the Offers.
On October 2, 2013, in accordance
with the Transaction Agreement, BBVA caused the members of the Companys board of directors that were appointed by BBVA or any of its subsidiaries (excluding the Companys independent directors and their independent alternates) to resign
from the board of directors of the Company and caused the board of directors to appoint in the place of each such resigning director such qualified person as was designated by MetLife, effective as of October 2, 2013. MetLife therefore
designated a majority of the board of directors of the Company. Each of the directors designated by MetLife stood for re-election and were re-elected at the Companys shareholders meeting held on April 30, 2014.
On September 29, 2014, the new Chilean Tax Law 20,780 was published in the Chilean Official Gazette. Upon the laws enactment,
MetLife Chile Acquisition and its affiliates, together with its advisors, started evaluating potential effects of such law on MetLife Chile Acquisition and its affiliates, as well as on the Company.
9
On October 31, 2014, Inversiones Previsionales was dissolved, and as a consequence of such
dissolution, its 171,023,573 Common Shares were assigned to MetLife Chile Acquisition in exchange for no funds or consideration in accordance with Chilean law.
On November 12, 2014, a special shareholders meeting of MetLife Chile Acquisition approved a decrease in the number of shares into
which the capital of MetLife Chile Acquisition is divided, from 2,081,600,000 to 308,928,816, without reducing its corporate capital or affecting the rights and preferences of shares in MetLife Chile Acquisition. Such amendment was registered in the
Registry of Commerce and published in the Chilean Official Gazette.
Also on November 12, 2014, the board of directors of MetLife
Chile Acquisition approved the Merger Agreement and sent it to its shareholders for their consideration. Afterwards, the Merger Agreement was executed by and among MetLife Chile Acquisitions shareholders (Holdco 2, Holdco 3, and Purchaser) on
the one hand, and MetLife Chile Acquisition (as the Companys controlling shareholder) on the other hand. A duly appointed representative of MetLife Chile Acquisition then delivered a letter to the Chairman of the board of directors of the
Company, requesting the convening of a special shareholders meeting for approval of the Merger. Afterwards, on December 3, the Merger Agreement was amended by MetLife Chile Acquisition and the other parties to the Merger Agreement, and a
restated version of it was approved. The Merger Agreement sets forth mutual obligations for the completion of the Merger by absorption of the Company into MetLife Chile Acquisition. Pursuant to the Corporations Law, shareholders of the Company who
(i) voted against the Merger at the Companys special shareholders meeting, or (ii) did not attend such meeting but indicated afterward their disagreement with the Merger by delivering a written notice to the Company, were
allowed to exercise withdrawal rights and received a cash payment in exchange for their Common Shares, provided that, in each of cases (i) and (ii), such shareholders sent to the Company, within 30 days from the date on which the Merger was
approved, a written notice expressly declaring their intention to withdraw from the Company. Approximately 3,295,861 Common Shares were withdrawn pursuant to the exercise of withdrawal rights by the dissenting shareholders of the Merger.
On November 17, 2014, the board of directors of the Company approved the financial statements and the submission of the background
information for the Merger to its shareholders (the Merger Agreement, the financial statements and the financial experts report) and called for a special shareholders meeting. On November 18, 2014, the Company filed a material event
notice (hecho esencial) with the Chilean Superintendency of Securities (Superintendencia de Valores y Seguros) and a Form 6-K with the SEC, announcing the calling of the special shareholders meeting. On November 17, 2014,
the board of directors of MetLife Chile Acquisition approved the audited financial statements and the expert report and called for a special shareholders meeting to be held on or about December 29, 2014.
On December 29, 2014, the shareholders of each of the Company and MetLife Chile Acquisition approved the Merger.
Except as disclosed in this Transaction Statement, there have been no negotiations, transactions or material contacts during the past two
years between the Filing Persons (including their respective subsidiaries, executive officers and directors) and the Company or its affiliates concerning any merger, consolidation, acquisition, tender offer for or other acquisition of any class of
the Companys securities, election of the Companys directors or sale or other transfer of a material amount of assets of the Company.
10
(c) Negotiations or Contacts.
Except as disclosed in this Transaction Statement, there have been no negotiations or material contacts during the past two years between
(i) any affiliates of the Company or (ii) the Company or any of its affiliates and any person not affiliated with the Company who would have a direct interest in the matter concerning any merger, consolidation, acquisition, tender offer
for or other acquisition of any class of the Companys securities, election of the Companys directors or sale or other transfer of a material amount of assets of the Company.
(e) Agreements Involving the Companys Securities.
On March 28, 2014, MetLife Chile Acquisition entered into an American Depositary Share Purchase Agreement (Little Oak Purchase
Agreement) with Little Oak Asset Management, LLC, pursuant to which MetLife Chile Acquisition acquired 149,625 Common Shares (represented by 9,975 ADSs) in exchange for an aggregate of U.S. $919,834.65 in cash, or U.S. $6.1476 per Common
Share.
On March 31, 2014, MetLife Chile Acquisition entered into an American Depositary Share Purchase Agreement (CIBC
Purchase Agreement) with CIBC World Markets Inc., pursuant to which MetLife Chile Acquisition acquired 1,139,880 Common Shares (represented by 75,992 ADSs) in exchange for an aggregate of U.S. $7,007,526.29 in cash, or U.S. $6.1476 per Common
Share.
On May 16, 2014, MetLife Chile Acquisition entered into an American Depositary Share Purchase Agreement (Rangeley
Purchase Agreement 1) with Rangeley Capital Partners, L.P. (Rangeley), pursuant to which MetLife Chile Acquisition acquired 1,225,980 Common Shares (represented by 81,732 ADSs) in exchange for an aggregate of U.S. $7,536,834.65 in
cash, or U.S. $6.1476 per Common Share.
On August 22, 2014, MetLife Chile Acquisition entered into an American Depositary Share
Purchase Agreement (Rangeley Purchase Agreement 2) with Rangeley, pursuant to which MetLife Chile Acquisition acquired 1,414,065 Common Shares (represented by 94,271 ADSs) in exchange for an aggregate of U.S. $8,693,105.99 in cash, or
U.S. $6.1476 per Common Share.
On September 26, 2014, MetLife Chile Acquisition entered into an American Depositary Share Purchase
Agreement (CIBC Purchase Agreement 2) with CIBC World Markets Inc., pursuant to which MetLife Chile Acquisition acquired 494,085 Common Shares (represented by 32,939 ADSs) in exchange for an aggregate of U.S. $3,037,436.95 in cash, or
U.S. $6.1476 per Common Share.
On September 26, 2014, MetLife Chile Acquisition entered into an American Depositary Share Purchase
Agreement (Rangeley Purchase Agreement 3) with Rangeley Capital Partners, LLC, pursuant to which MetLife Chile Acquisition acquired 1,117,740 Common Shares (represented by 74,516 ADSs) in exchange for an aggregate of U.S. $6,871,417.42
in cash, or U.S. $6.1476 per Common Share.
On September 26, 2014, MetLife Chile Acquisition entered into an American Depositary
Share Purchase Agreement (Lichtenstein Purchase Agreement) with Andrew Lichtenstein, Inc., pursuant to which MetLife Chile Acquisition acquired 810 Common Shares (represented by 54 ADSs) in exchange for an aggregate of U.S. $4,979.56 in
cash, or U.S. $6.1476 per Common Share.
The descriptions above of the Little Oak Purchase Agreement, the CIBC Purchase Agreement, the
Rangeley Purchase Agreement 1, the Rangeley Purchase Agreement 2, CIBC Purchase Agreement 2, the Rangeley Purchase Agreement 3 and the Lichtenstein Purchase Agreement are summaries and qualified in their entirety by the terms of such agreements,
copies of which are filed as exhibits to the MetLife Schedule 13D/As as filed with the SEC on August 28, 2014 and November 17, 2014, and which are incorporated herein by reference.
Pursuant to Rule 13e-3, each of the transactions described above were exempt from the requirements of Rule 13e-3 as transactions occurring
within one year of the date of the termination of the U.S. Offer. Such exception expired on September 28, 2014, the first anniversary of the termination of the U.S. Offer.
11
Except as disclosed in this Transaction Statement, there have been no agreements, arrangements or
understandings, whether or not legally enforceable, between the Filing Persons (including the executive officers of MetLife and Purchaser and the directors of MetLife) and any other person with respect to any securities of the Company.
Item 6. |
Purposes of the Transaction, and Plans or Proposals |
(b) Use of Securities Acquired.
The Filing Persons intend to retain the Subject Shares.
(c)(1) (8) Plans.
On
November 14, 2014, the Merger Agreement Parties entered into the Merger Agreement and subsequently MetLife Chile Acquisition filed a Registration Statement on Form F-4 with the SEC on November 19, 2014 in connection with the Merger.
Pursuant to the Merger Agreement, subject to the satisfaction or waiver of certain conditions, the Merger Agreement Parties agreed to the Merger. In order to be consummated, the Merger needs to be approved by the SP. Under the terms of the Merger,
shareholders of the Company are expected to receive one (1) share of MetLife Chile Acquisition common stock, without par value, for each Common Share that they own; however, shareholders of the Company who (i) voted against the Merger at
the Companys special shareholders meeting, or (ii) did not attend such meeting but indicated afterward their disagreement with the Merger by delivering a written notice to the Company, were allowed to exercise withdrawal rights and
received a cash payment in exchange for their Common Shares, provided that, in each of cases (i) and (ii), such shareholders sent to the Company, within 30 days from the date on which the Merger was approved, a written notice expressly
declaring their intention to withdraw from the Company. Such cash payment per Common Share was equivalent to the weighted average of the trading prices per Common Share as reported on the Chilean Exchanges for the 60-trading day period that was
between the 90th trading day and the 30th trading day preceding the special shareholders meeting. MetLife Chile Acquisition registered its common stock under the Securities Act of 1933, as amended (the Securities Act) and the
Exchange Act (together with the Securities Act, the Acts). MetLife Chile Acquisition is expected to register itself and its common stock in the Securities Registry kept by the Chilean Superintendency of Securities (Superintendencia de
Valores y Seguros) and to list such common stock on the Chilean Exchanges. Upon consummation of the Merger, the Common Shares would be extinguished, would cease to be listed on the Chilean Exchanges and would cease to be registered under the
Acts. On December 29, 2014, the shareholders of each of the Company and MetLife Chile Acquisition approved the Merger. As of May 15, 2015, the Merger has not been consummated, as it needs to be authorized by the SP, and is expected to be
consummated not earlier than June 30, 2015. However, no assurance can be provided as to when or if the Merger will be consummated. If the Merger is consummated prior to the closing of the Transaction, Purchaser shall be entitled to receive the
merger consideration (or the right thereto) as a substitute for the Subject Shares, pursuant to the Purchase Agreement.
Upon
effectiveness of the Merger, the Company shall be dissolved and absorbed into MetLife Chile Acquisition, the latter acquiring all the assets, liabilities and equity of the Company, and succeeding the Company in all its rights and obligations. The
Companys dissolution shall occur without requiring its winding-up, since its shareholders shall become shareholders of MetLife Chile Acquisition.
The foregoing description of the Merger Agreement is a summary and qualified in its entirety by the terms of the Merger Agreement, a copy of
which has been translated from Spanish to English and is filed as an exhibit to the MetLife Schedule 13D/A filed with the SEC on November 17, 2014, and which is incorporated herein by reference.
MetLife and its affiliates may at any time, or from time to time, (i) acquire additional Common Shares, including Common Shares held by
the Company in treasury, in the open market, in privately negotiated transactions, or otherwise, (ii) otherwise seek control or seek to influence the management and policies of the Company, (iii) amend the terms of the Transaction, or,
subject to its terms, terminate the Purchase Agreement,
12
(iv) take any action in or out of the ordinary course of business to facilitate or increase the likelihood of consummation of the Transaction, or (v) change their intentions with
respect to any such matters, in each of the cases of (i) through (v), based upon their evaluation of the Companys businesses and prospects, price levels of the Common Shares, conditions in the securities and financing markets and in the
Companys industry and the economy in general, regulatory developments affecting the Company and its industry and other factors deemed relevant.
Except as disclosed in this Transaction Statement, the Filing Persons have no current plans, proposals or negotiations that relate to or would
result in any of the following occurring after the Transaction: any extraordinary transaction, such as a merger, reorganization or liquidation, involving the Company or any of its subsidiaries; any purchase, sale or transfer of a material amount of
assets of the Company or any of its subsidiaries; any material change in the present dividend rate or policy, or indebtedness or capitalization of the Company; any change in the present board of directors or management of the Company, including, but
not limited to, any plans or proposals to change the number or the term of directors or to fill any existing vacancies on the board or to change any material term of the employment contract of any executive officer; any other material change in the
Companys corporate structure or business; any class of equity securities of the Company to be delisted from a securities exchange.
Item 7. |
Purposes, Alternatives, Reasons and Effects |
(a) Purposes.
The purpose of the Transaction is for MetLife, through Purchaser, to acquire all of the Subject Shares in furtherance of its acquisition of up
to 100% of the Common Shares.
(b) Alternatives.
In the event that MetLife, through Purchaser, could not acquire the Subject Shares pursuant to the Purchase Agreement, MetLife may consider the
acquisition of the Subject Shares through open market purchases or privately negotiated transactions. Since MetLife entered into the Purchase Agreement, MetLife did not consider these alternatives further.
(c) Reasons.
MetLife, through Purchaser
and other affiliates, intends to acquire up to 100% of the Common Shares. Subject to applicable law, MetLife intends to acquire additional Common Shares through open market purchases, privately negotiated transactions or purchases facilitated by
brokers in Chile, or otherwise. The Transaction provides greater certainty in acquiring all of the Subject Shares.
(d) Effects.
As of May 12, 2015, the Subject Shares represent approximately 1.5% of the outstanding Common Shares. If the Transaction is consummated,
MetLife, through its affiliates, will increase its interest in the Company from approximately 93.2% of the Common Shares, as of May 12, 2015, to a maximum of approximately 94.7% of the Common Shares. The Transaction will not result in a change
of control of the Company. As previously disclosed, MetLife may cause the Company to terminate the Companys registration under the Exchange Act and suspend the Companys obligation to file reports under Section 15(d) of the Exchange
Act.
General
Upon consummation of
the Transaction, MetLife will increase its aggregate, indirect beneficial ownership in the Company from 93.2% of the Common Shares, as of May 12, 2015, to a maximum of approximately 94.7% of the Common Shares, subject to prior surrenders of
ADSs by the third business day prior
13
to the Closing Date in accordance with the terms of the Deposit Agreement. Following the Transaction, the Filing Persons interest in the Companys net book value of approximately
Ch$305,184,822,000 for the fiscal year ended December 31, 2014 will increase from approximately 93.2% to a maximum of approximately 94.7% and the Filing Persons interest in the Companys net earnings of approximately MCh$94,150 for
the fiscal year ended December 31, 2014 will increase from approximately 93.2% to a maximum of approximately 94.7%, each subject to prior surrenders of ADSs by the third business day prior to the Closing Date in accordance with the terms of the
Deposit Agreement.
Effect on the Company
As previously disclosed, MetLife may cause the Company to terminate the Companys registration under the Exchange Act and suspend the
Companys obligation to file reports under Section 15(d) of the Exchange Act. The Transaction will not, however, have the effect of causing the Common Shares to become eligible for deregistration pursuant to Section 12(g) of the
Exchange Act or the public reporting obligations of the Company pursuant to the Section 13(a) of the Exchange Act to be eligible for suspension or termination.
Following the Transaction, the Common Shares will continue to be listed on the Chilean Exchanges (as defined below) until consummation of the
Merger, after which the surviving entitys common stock will be listed on the Chilean Exchanges. The Common Shares are no longer listed on any other securities markets and no such listing is expected.
Effect of the Transaction on Unaffiliated Shareholders
Following the Transaction, unaffiliated shareholders of the Company who did not beneficially own Subject Shares will continue to hold their
Common Shares and may thereafter continue to hold them or sell them at any time in the open market or in privately negotiated transactions. Shareholders of the Company may be able to exercise limited withdrawal rights in accordance with Chilean law
if, at any time following the Transaction, MetLife directly or indirectly holds in the aggregate more than 95.0% of the then outstanding Common Shares. If MetLife holds more than 95.0% of the then outstanding Common Shares (i) the Company would
be required to give notice by means of a newspaper advertisement published in Chile and (ii) the unaffiliated shareholders would have the right to cause the Company to redeem any such shareholders Common Shares for an amount equal to
(1) if by then Common Shares have trading presence in the Chilean Exchanges, as defined by Chilean law, the weighted average trading price per Common Share as reported on the Chilean Exchanges for the 60-day trading period that was
between the 90th trading day and the 30th trading day preceding the date on which such 95.0% legal threshold is surpassed or (2) in case the Common Shares do not then have trading presence, the book value of such Common Shares.
Following the Transaction, the Filing Persons will directly or indirectly hold in the aggregate a maximum of approximately 94.7% of the Common Shares, subject to surrenders of ADSs in accordance with the terms of the Deposit Agreement. Under Chilean
law and the Companys bylaws, the Filing Persons are not currently permitted to squeeze out the remaining shareholders. Following the Merger, however, the bylaws of the surviving entity will contain a squeeze-out mechanism that will
apply to all shareholders of the surviving entity. Under this squeeze-out mechanism, if (i) the controlling shareholder of the surviving entity launches a tender offer for 100% of the shares of the surviving entity, (ii) in such tender
offer the controlling shareholder of the surviving entity acquires at least 15.0% of the issued and outstanding shares of the surviving entity from non-related shareholders, and (iii) as a result the controlling shareholder of the surviving
entity reaches 95.0% or more of the then outstanding shares of the surviving entity; then such controlling shareholder would be entitled to require that the remaining shareholders of the surviving entity sell their shares to such person in
accordance with Chilean law. The squeeze-out mechanism will not be available for MetLife.
Pursuant to the Deposit Agreement, unaffiliated
shareholders who beneficially own Subject Shares as of the Closing Date and have not surrendered their ADSs to the Depositary in accordance with the Deposit Agreement will no longer have a right to receive Common Shares upon surrender of their ADSs.
Instead they will be entitled to receive, upon surrender of their ADSs to the Depositary in accordance with the Deposit
14
Agreement, the Per Share Consideration net of any and all applicable taxes, including, as and when the Transaction occurs, a 35% Chilean Capital Gains Tax based on the total amount of the sale
and a 19% Chilean Value Added Tax on brokerage services fees, and government charges, commissions, fees and other expenses under applicable law and the Deposit Agreement. Any such taxes are not reclaimable from the Chilean authorities. In accordance
with the Deposit Agreement and the Purchase Agreement, unaffiliated beneficial owners of the Subject Shares will continue to have the right to receive Common Shares upon surrender of their ADSs at any time prior to the end of the 3rd business day
prior to the Closing Date.
United States Federal Income Tax Consequences of the Transaction
The following is a summary of the anticipated U.S. federal income tax consequences of the sale of the Subject Shares beneficially owned by a
U.S. Holder (as defined below) pursuant to the Transaction. This summary is based on the existing tax law under the Internal Revenue Code of 1986, as amended (the Code), its legislative history, applicable U.S. Treasury Regulations
promulgated thereunder, administrative rulings and court decisions, all as in effect as of the date hereof, and any of which may be repealed, revoked or modified (possibly with retroactive effect) so as to result in U.S. federal income tax
consequences different from those discussed below.
This summary is limited to U.S. Holders who beneficially own Subject Shares as capital
assets (generally, property held for investment purposes). This summary is not a complete description of all of the U.S. federal income tax consequences of the sale of Subject Shares, and in particular, may not address U.S. federal income tax
consequences applicable to persons subject to special treatment under U.S. federal income tax law, including, for example, brokers, dealers in securities or currencies, traders in securities that elect to use a mark-to-market method of accounting
for securities holdings, tax-exempt organizations (including private foundations), insurance companies, banks, thrifts and other financial institutions, real estate investment trusts, regulated investment companies, persons liable for the
alternative minimum tax, persons that hold an interest in an entity that beneficially owns the Subject Shares, persons that own, or have owned, directly, indirectly or constructively, 10% or more (by vote or value) of the Companys equity,
persons that hold Subject Shares as part of a hedge, wash sale, straddle, constructive sale, conversion transaction or other integrated transaction for U.S. federal income tax purposes, entities treated as partnerships for U.S. federal income tax
purposes and holders of interests therein, persons whose functional currency is not the U.S. dollar and certain former citizens or former long-term residents of the United States, all of whom may be subject to tax rules that differ significantly
from those summarized below. In addition, this summary does not discuss any aspect of any non-U.S., state, local or estate or gift taxation or the Medicare contribution tax on certain net investment income. Each beneficial owner of Subject Shares
is urged to consult its own tax advisor regarding the U.S. federal, state, local and non-U.S. income and other tax consequences of the sale of Subject Shares pursuant to the Transaction.
If a partnership (including an entity treated as a partnership for U.S. federal income tax purposes) is the beneficial owner of Subject
Shares, the U.S. federal income tax treatment of a partner will depend on the status of the partner and the activities of the partnership. A partner of a partnership that is the beneficial owner of Subject Shares should consult the partners
tax advisor regarding the U.S. federal income tax treatment to such partner of the tender of Subject Shares pursuant to the Transaction.
For purposes of this discussion, a U.S. Holder is a beneficial owner of Subject Shares that is, for U.S. federal income tax
purposes, (1) a citizen or individual resident of the United States, (2) a corporation, or entity treated as a corporation, organized in or under the laws of the United States or any state thereof or the District of Columbia, (3) a
trust that (i) is subject to (a) the primary supervision of a court within the United States and (b) the authority of one or more U.S. persons to control all substantial decisions of the trust or (ii) has a valid election in
effect under applicable U.S. Treasury Regulations to be treated as a U.S. person or (4) an estate that is subject to U.S. federal income tax on its income regardless of its source.
15
Sale of Subject Shares Pursuant to the Transaction
A U.S. Holder that beneficially owns Subject Shares that are sold pursuant to the Transaction generally will recognize capital gain or loss,
for U.S. federal income tax purposes, in an amount equal to the difference, if any, between (i) the amount realized in the Transaction and (ii) the U.S. Holders adjusted tax basis in the Subject Shares exchanged therefor. U.S.
Holders must calculate gain or loss separately for each block of Subject Shares exchanged (that is, those acquired at the same cost in a single transaction). A U.S. Holders adjusted tax basis in a Subject Share generally will equal the amount
paid therefor.
Subject to the passive foreign investment company (PFIC) rules discussed below, any gain or loss on the sale
of Subject Shares pursuant to the Transaction will be long-term capital gain or loss if the U.S. Holder beneficially owned the Subject Shares for more than one year. Long-term capital gains recognized by certain non-corporate U.S. Holders generally
are eligible for reduced rates of U.S. federal income taxation. The deductibility of capital losses is subject to limitations for U.S. federal income tax purposes.
Passive Foreign Investment Company Rules
A U.S. Holder may be subject to adverse U.S. federal income tax rules in respect of a disposition of Subject Shares pursuant to the Transaction
if the Company were classified as a PFIC for any taxable year during which such U.S. Holder has beneficially owned Subject Shares and did not have certain elections in effect. In general, a foreign corporation will be a PFIC for any taxable year in
which (1) 75% or more of its gross income constitutes passive income or (2) 50% or more of its assets produce, or are held for the production of, passive income. For this purpose, passive income is
defined to include income of the kind which would be foreign personal holding company income under Section 954(c) of the Code, and generally includes interest, dividends, rents, royalties and certain gains.
The Company does not believe that it is or has been treated as a PFIC. However, the determination as to whether the Company is a PFIC for any
taxable year is based on the application of complex U.S. federal income tax rules that are subject to differing interpretations, including uncertainties as to the composition, valuation and proper characterization of certain of the Companys
assets as passive or active (in particular, uncertainty as to the inclusion and characterization of certain reserves denominated as mandatory investments).
If the Company were treated as a PFIC for any taxable year during which a U.S. Holder beneficially owned Subject Shares, certain adverse
consequences could apply to the U.S. Holder, unless certain elections that may mitigate such adverse consequences have been made (including a mark-to-market election). Specifically, gain realized by a U.S. Holder on the sale of its Subject Shares
pursuant to the Transaction would be allocated ratably over the U.S. Holders holding period for such Subject Shares. The amounts allocated to the taxable year of the exchange and to any year before the Company was a PFIC would be taxed as
ordinary income in the current year. The amount allocated to each other taxable year would be subject to tax at the highest rate in effect for individuals or corporations, as appropriate, for such taxable year and an interest charge would be imposed
on the amount allocated to such taxable year. These rules would apply to a U.S. Holder that beneficially owned Subject Shares during any year in which the Company was a PFIC, even if the Company was not a PFIC in the year in which the Subject Shares
were sold pursuant to the Transaction. U.S. Holders should consult their own tax advisors regarding (i) the tax consequences that would arise if the Company were treated as a PFIC for any year, (ii) any applicable information reporting
requirements and (iii) the availability of any elections (including the mark-to-market election mentioned above) that may help mitigate the tax consequences to a U.S. Holder if the Company were a PFIC.
Foreign Tax Credit
If
any gain on the sale of Subject Shares pursuant to the Transaction is subject to Chilean income tax, U.S. Holders may not be able to credit such taxes against their U.S. federal income tax liability under the U.S. foreign tax credit limitations of
the Code because such gain would generally be U.S. source income, unless such
16
tax can be credited (subject to applicable limitations) against tax due on other income of the U.S. Holder that is treated as derived from foreign sources. Alternatively, the U.S. Holder may take
a deduction for the Chilean income tax if such holder does not take a credit for any foreign income tax during the taxable year. The foreign tax credit rules are complex, and U.S. Holders are urged to consult their own tax advisers regarding the
availability of the foreign tax credit based on their particular circumstances.
Information Reporting and Backup Withholding
Payments made to U.S. Holders pursuant to the Transaction generally will be subject to information reporting and may be subject to backup
withholding. To avoid backup withholding, U.S. Holders that do not otherwise establish an exemption should complete and return to the Depositary or other applicable withholding agent a U.S. Internal Revenue Service (the IRS) Form W-9 (or
applicable substitute form) certifying that such holder is a U.S. person, the taxpayer identification number provided is correct and such holder is not subject to backup withholding. Certain holders (including corporations) are generally exempt from
backup withholding provided that they appropriately establish an exemption. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against a U.S. Holders U.S.
federal income tax liability provided that the required information is correctly and timely furnished to the IRS.
Item 8. |
Fairness of the Transaction |
(a) (b) Fairness; Factors Considered in Determining
Fairness.
The Filing Persons reasonably believe that the Transaction is fair to the unaffiliated beneficial owners of the Subject
Shares. In making this determination, the Filing Persons considered the factors set forth below. In view of the wide variety of factors considered by the Filing Persons, and the complexity of these matters, the Filing Persons did not find it
practicable to, and did not, quantify or otherwise assign relative weights to the factors set forth below.
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The fact that the purchase price payable by Purchaser in the Transaction is determined by reference to the volume weighted average price at which the Common Shares have traded on the Santiago Stock Exchange (Bolsa de
Comercio de Santiago) over a time period of no less than 30 days, including trading days elapsing after the date of announcement of the Transaction, the release of the Companys consolidated financial results for the period ended
March 31, 2015, the announcement of the amount of the Companys mandatory annual dividend distribution to be paid on May 28, 2015 and the date of payment thereof and the filing and distribution of this Transaction Statement.
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The current and historical trading prices of the Common Shares. In the past two years the closing price of the Common Shares has fluctuated between a high of Ch$3,690.40 per Common Share in September 2014, and a low of
Ch$2,900.00 per Common Share in March 2015. The closing price of the Common Shares on May 11, 2015, the last trading day prior to the public announcement of the Transaction, was Ch$3,100.00 per Common Share. The Per Share Consideration
(i) at the minimum price of Ch$3,092.05 represents a 0.26% discount to the closing price of the Common Shares on such date and represents a 2.7% premium to the volume weighted average price at which the Common Shares have traded during the 90
day period immediately prior to the public announcement of the Transaction and (ii) at the maximum price of Ch$3,300.00 represents a 6.45% premium to the closing price of the Common Shares on such date and represents a 9.7% premium to the
volume weighted average price at which the Common Shares have traded during the 90 day period immediately prior to the public announcement of the Transaction. |
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|
The minimum price is equal to the Ch$ equivalent at the time of the Offers of the U.S. dollar denominated per Common Share tender offer price offered in the Offers, and the ceiling is equal to a further 6.7% premium to
such price. |
17
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The fact that the unaffiliated beneficial owners of the Subject Shares as of May 22, 2015 will be entitled to receive a dividend of Ch$174.00 per Common Share represented by the Subject Shares. |
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The fact that the ADSs have been delisted from the New York Stock Exchange (the NYSE) and no longer trade on the NYSE. |
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The fact that the ADR Program has been terminated and the Depositary is no longer obligated to continue the registration of transfers of ADSs or give certain notices, including notices with respect to shareholders
meeting. |
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The fact that beginning as early as June 6, 2014, the Company and the Depositary have made public disclosure regarding the termination of the ADR Program and the options available to unaffiliated beneficial owners
of the Subject Shares following the termination of the ADR Program, including the opportunity to surrender their ADSs to the Depositary and receive the underlying Common Shares. |
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The fact that if unaffiliated beneficial owners of the Subject Shares duly complete the process of surrendering their ADSs to the Depositary at any time prior to the end of the 3rd business day prior to the Closing
Date, subject to any requirements under applicable Chilean law, such unaffiliated beneficial owners may continue to hold their beneficial ownership of the Common Shares instead of receiving their pro rata portion of the net proceeds of the
Transaction from the Depositary. |
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The fact that the Common Shares have limited liquidity, due in part to the small remaining percentage of outstanding Common Shares held by unaffiliated shareholders. |
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The fact that the Depositary informed the Filing Persons that if it does not sell the Subject Shares in the Transaction, the Depositary will sell the Subject Shares on the open market and the Filing Persons belief
that the market price of the Common Shares may be negatively impacted by such sale, potentially reducing it below the minimum Per Share Consideration of Ch$3,092.05 per Common Share. The closing price and trading volume of the Common Shares on
May 11, 2015, the last trading day prior to the public announcement of the Transaction, were Ch$3,100.00 per Common Share and 29,460 Common Shares, respectively. The Transaction provides a minimum price per Subject Share of Ch$3,092.05 and
allows the unaffiliated beneficial owners of the Subject Shares to realize certain value for their Common Shares, with such value based on the publicly-traded market value of Common Shares on the Santiago Stock Exchange (Bolsa de Comercio de
Santiago), the principal market in which Common Shares are traded. |
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The ability of the Depositary, in certain circumstances prior to the Closing Date, to terminate the Purchase Agreement to accept a Superior Proposal or increase the Per Share Consideration under the Purchase Agreement
in response to a Superior Proposal, subject to compliance with the terms and conditions of the Purchase Agreement. |
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The fact that the Purchase Agreement was negotiated with BNY Mellon, a party unaffiliated with the Filing Persons, and is the result of an arms length negotiation among sophisticated parties. |
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As discussed in more detail below, Purchaser received a written opinion, dated May 11, 2015, of an independent financial advisor, EYIA, as to the fairness, as of such date, to the unaffiliated beneficial owners of
the Subject Shares, from a financial point of view, of the Per Share Consideration to be paid by Purchaser to the Depositary. The full text of the written opinion of EYIA, which describes the assumptions made, procedures followed, matters considered
and limitations on the review undertaken, is filed as an exhibit to this Transaction Statement. See also Item 9. Reports, Opinions, Appraisals and Negotiations beginning on page 20. |
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The fact that the Company is not a party to the Transaction, and no funds of the Company will be used in connection therewith, and the consummation of the Transaction does not impact the capitalization of the Company.
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The fact that the Filing Persons are not aware of any offers by any unaffiliated person during the past two years for a merger or consolidation of the Company with or into another company, the sale or other transfer of
all or any substantial part of the assets of the Company or a purchase of the Companys securities or of any offers by any unaffiliated persons to purchase any or all of the Subject Shares. |
18
As a result of the foregoing factors, the Filing Persons believe that the Transaction is fair to
the unaffiliated beneficial owners of the Subject Shares.
In addition to the foregoing factors and analyses that support the Filing
Persons belief that the Transaction is fair to the unaffiliated beneficial owners of the Subject Shares, the Filing Persons also considered a variety of risks and other potentially negative factors concerning the Purchase Agreement and the
Transaction, including the following:
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The fact that the unaffiliated beneficial owners of the Subject Shares who have not validly surrendered their ADSs in exchange for Common Shares by the 3rd business day prior to the Closing Date will cease to
participate in the future earnings or growth, if any, of the Company, or benefit from an increase, if any, in the value of their holdings in the Company. |
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The fact that following the completion of the Offers, MetLife, through its affiliates, has purchased an aggregate of 6,179,493 Common Shares, at prices ranging from $6.1476 to $6.1679 per Common Share.
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The fact that the Company is not a party to the Transaction, and the Transaction is not subject to shareholder approval or approval of the board of directors of the Company or any independent committee thereof.
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The fact that whether or not the Transaction is consummated, the Filing Persons and their affiliates may seek to cause the Company to cease to be registered under the Exchange Act. |
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The fact that the proceeds to be received by unaffiliated beneficial owners of the Subject Shares as of the Closing upon surrender of their ADSs to the Depositary in accordance with the Deposit Agreement shall be equal
to the Per Share Consideration net of any and all applicable taxes, including, as and when the Transaction occurs, a 35% Chilean Capital Gains Tax based on the total amount of the sale and a 19% Chilean Value Added Tax on brokerage services fees,
and government charges, commissions, fees and other expenses under applicable law and the Deposit Agreement. |
After giving
due consideration to these factors, the Filing Persons have concluded that none of these factors, alone or in the aggregate, is significant enough to outweigh the factors and analyses that the Filing Persons have considered to support their belief
that the Transaction is fair to the unaffiliated beneficial owners of the Subject Shares.
Although potentially relevant to a
determination of fairness of the Transaction, except as otherwise disclosed in Item 9. Reports, Opinions, Appraisals and Negotiations beginning on page 20 with respect to the fairness opinion of EYIA, the factors listed below, for the
reasons given, were determined by the Filing Persons not to be applicable to the fairness of the Transaction and were not considered or were not given any weight by the Filing Persons.
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Liquidation Value. The Filing Persons viewed the liquidation value of the Company to be an inappropriate measure for the purpose of evaluating the fairness to the unaffiliated beneficial owners of the Subject
Shares of the Per Share Consideration to be paid by Purchaser to the Depositary. There is no present intention of liquidating the Company. A liquidation process would also involve additional legal fees, costs of sale and other expenses that would
reduce any amounts that the unaffiliated beneficial owners of the Subject Shares might receive upon a liquidation. Given these and other factors considered by the Filing Persons as described in this Transaction Statement, the Filing Persons did not
pursue a liquidation value approach. |
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Net Book Value. The Filing Persons viewed the net book value of the Company, which is based upon the historical cost of the Companys assets, to be an inappropriate measure for the purpose of evaluating the
fairness to the unaffiliated beneficial owners of the Subject Shares of the Per Share Consideration to be paid by Purchaser to the Depositary. Net book value does not take into account the future prospects of the Company and the fee-based
characteristics of the Companys business. Given these and other factors considered by the Filing Persons as described in this Transaction Statement, the Filing Persons did not pursue a net book approach. |
19
In view of the number and wide variety of other factors considered in connection with making the
determination as to the fairness of the Transaction, and the complexity of these matters, the Filing Persons did not find it practicable to, nor did they attempt to, quantify, rank or otherwise assign relative weights to the other specific factors
considered.
The Filing Persons have not considered any factors, other than as stated above, regarding the fairness of the Transaction to
the unaffiliated beneficial owners of the Subject Shares, as it is their view that the factors they considered provided a reasonable basis to form their belief.
(c) Approval of Security Holders.
The
Transaction requires no shareholder approval, so the Transaction is not structured so that approval of at least a majority of unaffiliated shareholders is required. Pursuant to the terms of the Deposit Agreement, at any time after March 18,
2015, the Depositary may sell at public or private sale, at such place or places and upon such terms as it may deem proper, the Common Shares held by it as depositary of the ADR Program.
(d) Unaffiliated Representative.
The
Transaction is not a corporate action on the part of the Company, so a majority of the directors who are not employees of the Company have not retained an unaffiliated representative to act solely on behalf of unaffiliated shareholders for the
purpose of negotiating the terms of the Transaction or preparing a report concerning the fairness of the Transaction.
(e) Approval of Directors.
The Transaction is not a corporate action on the part of the Company, so the Transaction was not approved by a majority of the directors
of the Company who are not employees of the Company.
(f) Other Offers.
None.
Item 9. |
Reports, Opinions, Appraisals and Negotiations |
(a) - (c) Report, Opinion or Appraisal; Preparer
and Summary of the Report, Opinion or Appraisal; Availability of Documents.
Opinion of EYIA
Purchaser retained EYIA to render an opinion to Purchaser as to the fairness, from a financial point of view, to the unaffiliated beneficial
owners of the Subject Shares, of the Per Share Consideration. EYIA did not act as financial advisor to the Filing Persons in connection with the Transaction and was only engaged to render its opinion. The Purchase Price was determined through
arms length negotiations between Purchaser and the Depositary and not by EYIA.
On May 11, 2015, EYIA delivered its written
opinion to Purchaser that, as of that date and based upon and subject to the assumptions and other matters described in the written opinion, the Per Share Consideration was fair, from a financial point of view, to the unaffiliated beneficial owners
of the Subject Shares. The EYIA opinion is addressed to Purchaser, is directed only to the financial terms of the Purchase Agreement, and does not constitute advice or a recommendation to any unaffiliated beneficial owner of the Subject Shares as
to any matter or course of action available to such beneficial owner relating to the transactions contemplated by the Purchase Agreement or the effects thereof.
The complete text of the EYIA opinion, which sets forth the assumptions made, matters considered, limitations on and scope of the review
undertaken by EYIA, is attached to this Transaction Statement as Exhibit (c)(1). The summary of the EYIA opinion set forth in this Transaction Statement is qualified in its entirety by reference to the EYIA opinion. Unaffiliated beneficial owners
of the Subject Shares should read the EYIA opinion carefully and in its entirety for a description of the procedures followed, the factors considered, and the assumptions made by EYIA.
20
In arriving at its opinion, EYIA, among other things:
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reviewed a draft dated as of May 11, 2015 of the Purchase Agreement; |
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reviewed certain publicly available information concerning the Filing Persons and the Company that it believed to be relevant to its analysis, including, without limitation, (a) the August 6, 2013 MetLife
Schedule TO and related amendments and financial projections filed in connection with the U.S. Offer, (b) the September 3, 2013 Company Solicitation/Recommendation Statement on Schedule 14D-9 filed in connection with the U.S. Offer,
(c) the March 11, 2015 Company Form 6-K disclosing the Companys financial results for the fiscal year ended December 31, 2014, (d) the October 11, 2013 MetLife Schedule 13D and
related amendments (the Schedule 13D) relating to the beneficial ownership of MetLife and its affiliates of Common Shares, (e) the November 19, 2014 MetLife Chile Acquisition Form F-4 and related amendment, (f) the
March 11, 2015 MetLife Form 8-K and related materials presented at MetLifes March 11, 2015 Latin America Investor Day Conference, (g) the Company Annual Report on Form 20-F for fiscal year ended December 31, 2014, and
(h) the May 1, 2015 Company Form 6-K disclosing the Companys financial results for the first quarter of 2015; |
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reviewed the Deposit Agreement; |
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held discussions with members of management of the Filing Persons and their legal counsel regarding the Transaction, the information provided by Purchaser and management of MetLife, as well as publicly available
information; |
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reviewed certain financial information provided to EYIA by the Filing Persons and the management of MetLife; |
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reviewed and compared the Per Share Consideration to (a) the purchase price paid by affiliates of MetLife in private acquisitions of Shares since the completion of the Offers as disclosed in the Schedule 13D,
(b) the withdrawal price paid by the Company pursuant to the limited withdrawal rights for holders of Common Shares in connection with the Merger under Chilean law as described by MetLife and (c) alternative redemption prices, including
book value per Common Share, that would be available to holders of Common Shares under certain circumstances, including in connection with MetLife directly or indirectly holding in the aggregate more than 95.0% of the then outstanding Common Shares;
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conducted a market analysis for Common Shares on a fair market value basis using a dividend discount model (DDM), based on prospective Company financial information for the years 2015 to 2017 provided to
EYIA by management of MetLife; |
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reviewed the financial terms of certain other unrelated third party precedent business combinations that EYIA deemed generally relevant; |
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compared certain publicly available financial data of companies whose securities are traded in the public markets and that EYIA deemed relevant to similar data for the Company; |
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reviewed the historical stock prices and trading volumes of Common Shares; and |
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reviewed such other financial studies and analyses and considered such other matters as EYIA deemed appropriate. |
For purposes of its review and in arriving at its opinion, EYIA relied upon publicly available information and non-public information
regarding the Filing Persons or the Company that was provided by management of the Filing Persons. EYIA did not review analyses, opinions or board presentations from the U.S. Offer, and EYIA did not have any discussions with management of the
Company.
In connection with its review and in arriving at its opinion, EYIA assumed and relied upon the accuracy and completeness of all
of the financial, legal, regulatory, tax, accounting and other information discussed with, made available to, or used by it for purposes of its opinion and it neither attempted to verify
21
independently nor assumed responsibility for verifying any of such information. In addition, EYIA assumed, with the Filing Persons consent, that the Transaction would be consummated upon
the terms and subject to the conditions set forth in the draft dated as of May 11, 2015 of the Purchase Agreement, without waiver, modification or amendment of any material term, condition or agreement thereof. It also assumed, with the Filing
Persons consent, that all governmental, regulatory or other consents and approvals necessary for the consummation of the Transaction would be obtained without any adverse effect on the Company or on the expected benefits of the Transaction in
any way meaningful to its analysis. EYIA was not requested to solicit, and did not solicit, interest from other parties with respect to an acquisition of the Subject Shares or for any other security of the Company. EYIA did not assume any
responsibility for or make or obtain any independent evaluation, appraisal or physical inspection of the assets or liabilities of the Company nor did it evaluate the solvency or fair value of the Company under any state, federal or foreign laws
relating to bankruptcy, insolvency or similar matters. EYIAs opinion was based on economic, monetary and market conditions as they existed and can only be evaluated as of the date of the opinion, and EYIA assumed no responsibility to update or
revise its opinion based upon circumstances and events occurring after the date of its written opinion. With respect to the prospective financial information provided to it by management of MetLife, EYIA assumed, with the Filing Persons
consent and based upon discussions with MetLifes management, that such forecasts had been reasonably prepared on bases reflecting the best currently available estimates and judgments of such management, at the time of preparation, of the
future operating and financial performance of the Company. EYIA did not express any opinion with respect to any of such forecasts or the assumptions on which they were based.
In preparing its opinion, EYIA performed a variety of financial and comparative analyses. The following paragraphs summarize the material
financial analyses performed by EYIA in arriving at its opinion. Some of the summaries of the financial analyses include information presented in tabular format. The tables are not intended to stand alone, and in order to more fully understand the
financial analyses used by EYIA, the tables must be read together with the full text of each summary.
Market Validation
EYIA has taken the position that the Standard of Value is fair market value, defined as follows:
the price at which an entity (asset) would change hands between a willing buyer and willing seller, neither being under compulsion to
buy or sell and both having reasonable knowledge of all relevant facts as of the Date(s) of Valuation.
Since the Offers, MetLife has
purchased the Companys ADSs and Common Shares in private and open market transactions. EYIA has noted 30 separate transactions since March 28, 2014 which were completed prior to the expiration of the 1-year limitation to match the U.S.
Offer price. EYIA further noted that 28 of the 30 transactions completed were for ADSs in US Dollars. Finally, EYIA noted that the Common Shares are listed on the Santiago Stock Exchange.
Considering that (i) the Common Shares are still listed, (ii) the Common Shares have very limited trading volumes, and
(iii) there have been limited private transactions in Common Shares without MetLife as a buyer, EYIA felt it appropriate to first observe both these public and private transactions. As such, as part of its fairness analyses, EYIA completed the
following:
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reviewed current pricing of Common Shares as well as private transactions completed in ADS and Common Shares; |
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compared ranges of value indicated by historical and current market multiples to the Per Share Consideration; |
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considered the termination of the ADS program under the Deposit Agreement and subsequent ability of the Depositary to sell the Common Shares underlying any ADS that have not been surrendered for Common Shares, plus
accrued dividends; |
22
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considered the payment of dividends announced and declared for the fiscal year ended December 31, 2014 to the unaffiliated beneficial owners of the Subject Shares, to be paid on May 28, 2015;
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examined the prices that would be paid in the event of a redemption event, although management of MetLife and Purchaser has represented that there are currently no plans to increase their ownership; and
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Conducted certain market validation analyses including: |
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reviewed valuation metrics of publicly traded market comparables, |
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developed valuation metrics for observed transactions in companies deemed similar to the Company, and |
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compared ranges of value calculated under the DDM to the Per Share Consideration. |
Market
Comparable(s). Using publicly available information, EYIA compared and benchmarked certain trading multiples of selected publicly traded pension fund administrators (administradoras de fondos de pensiónes) (known as
AFPs) operating in Latin America that EYIA deemed relevant. These companies, referred to as the Guideline Companies, consisted of the following:
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Administradora de Fondos de Pensiones Capital S.A. (AFP Capital); |
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AFP Cuprum S.A. (AFP Cuprum); |
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Administradora de Fondos de Pensiones Habitat S.A. (AFP Habitat); |
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Administradora de Fondos de Pensiones y Cesantías Protección S.A. (AFP Protección); and |
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Administradora de Fondos de Pensiones Provida S.A. (AFP Provida) |
The table below sets forth
information concerning the observed multiples for the Guideline Companies and for the Company:
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Enterprise value as a percent of assets under management, or AUM; |
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Enterprise value as a multiple of last twelve months revenue, or LTM revenue; |
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Enterprise value as a multiple of last twelve months earnings before interest, taxes, depreciation and amortization, or LTM EBITDA; and |
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Price as a multiple of last twelve months earnings per share, or LTM earnings per share. |
EYIA calculated and benchmarked observed trading multiples for the Guideline Companies as of May 4, 2015 as well as key dates relating to
the U.S. Offer, specifically February 1, 2013, July 17, 2013 and October 1, 2013.
EYIA deemed that AFP Habitat was
the most liquid of the Guideline Companies in terms of trading activity and also deemed it among the most comparable to the Company in terms of size, growth, and various operating metrics.
However, no company or transaction or business used in the preceding Market Comparables Analysis, or the following Market
Transaction Analysis is identical to the Company or the Transaction. Accordingly, an evaluation of the results of these analyses is not entirely mathematical; rather, it involves complex considerations and judgments concerning differences in
the financial and operating characteristics and other factors that could affect the acquisition, public trading or other values of the Guideline Companies or Market Transactions or the company or transaction to which they are being compared.
23
The following table sets forth information concerning the multiples observed for the Guideline
Companies as of May 4, 2015 and the multiples implied by the Transaction:
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Guideline Company Median/Mean Multiples1 |
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AFP Habitat2 |
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Company Public Multiple3 |
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Implied Multiples from the Transaction4 |
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Enterprise value to AUM |
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3.2% / 3.0% |
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3.2% |
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3.3% |
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3.3% / 3.5% |
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Enterprise value to LTM revenue |
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4.4x / 4.3x |
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4.9x |
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4.2x |
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4.2x / 4.5x |
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Enterprise value to LTM EBITDA |
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7.2x / 8.2x |
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7.4x |
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7.0x |
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7.0x / 7.5x |
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Price as a multiple of LTM earnings per share |
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10.2x / 10.5x |
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9.8x |
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10.1x |
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10.1x / 10.7x |
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Notes:
1) |
Based on LTM metrics as of May 4, 2015. |
2) |
AFP Habitat is the most liquid of the group in terms of trading activity among the group and is also considered among the most comparable to the Company in terms of size, growth, and various operating metrics.
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3) |
Based on trading of Common Shares on the Santiago Stock Exchange. |
4) |
Multiple range presented based on the lower and upper bound Per Share Consideration (i.e., Ch$3,092.05 to Ch$3,300). |
Market Transactions.
EYIA
analyzed publicly available financial information for the following transactions which represent transactions since July 2006 involving publicly traded Latin American AFPs EYIA considered relevant.
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Target |
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Acquirer |
AFP Capital S.A. |
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Grupo de Inversiones Suramericana S.A. |
AFP Habitat S.A. |
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Prudential Financial, Inc. |
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AFP PlanVital S.A. |
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Unknown |
AFP Protección S.A. |
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C.F.N.S Infraestructura S.A.S |
AFP Horizonte S.A. |
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AFP Integra, Profuturo AFP S.A. |
AFP Cuprum S.A. |
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Principal Financial Group Inc. |
ING Groep NV., Latin American Operations |
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Grupo de Inversiones Suramericana S.A., others |
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AFP Union Vida SA |
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PRIMA AFP S.A. |
In examining the market transactions, EYIA developed the following multiples for each observed transaction:
|
|
|
Enterprise value as a multiple of LTM revenue, and |
|
|
|
Enterprise value as a multiple of LTM EBITDA. |
EYIA further developed multiples for the
Transaction based on the lower and upper bound Per Share Consideration (i.e., Ch$3,092.05 to Ch$3,300.00).
The following table sets forth
information concerning the multiples of enterprise value to LTM revenue and enterprise value to LTM EBITDA for the guideline transactions for the period following 2013 and for all guideline transactions and the same multiples implied by the
Transaction:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013 to Present Guideline Transactions |
|
|
|
|
|
|
High |
|
|
Median |
|
|
Mean |
|
|
Low |
|
|
Transaction |
|
Enterprise value to LTM revenue |
|
|
5.6x |
|
|
|
4.7x |
|
|
|
4.1x |
|
|
|
1.3x |
|
|
|
4.2x 4.5x |
|
Enterprise value to LTM EBITDA |
|
|
11.5x |
|
|
|
7.7x |
|
|
|
7.6x |
|
|
|
3.3x |
|
|
|
7.0x 7.5x |
|
24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Guideline Transactions |
|
|
|
|
|
|
High |
|
|
Median |
|
|
Mean |
|
|
Low |
|
|
Transaction |
|
Enterprise value to LTM revenue |
|
|
7.0x |
|
|
|
4.3x |
|
|
|
4.4x |
|
|
|
1.3x |
|
|
|
4.2x 4.5x |
|
Enterprise value to LTM EBITDA |
|
|
12.0x |
|
|
|
9.2x |
|
|
|
8.7x |
|
|
|
3.3x |
|
|
|
7.0x 7.5x |
|
Dividend Discount Model Analysis. EYIA was informed by the Filing Persons that the Company is required under Chilean
law and its own by-laws to make a minimum 30.0% annual distribution of net profits in the form of dividends. Historical payouts made by the Company and other Chilean AFPs have been generally higher than the minimum threshold.
As such, EYIA reviewed the income approach, which is a method often utilized to estimate enterprise and/or equity value by identifying the
future economic benefits to be generated by an entity and comparing them with a required rate of return, through a DDM, which focuses on the dividend-producing capability of the Company by incorporating the specific operating characteristics of the
Company in a prospective analysis. EYIA utilized two versions of the model in its analysis, a constant growth model and a 2-stage growth model. EYIAs inputs and formula related to each model are as follows:
Constant growth model
A constant growth model is
utilized when a companys dividends per share are assumed to grow by a specific and constant percent annually.
2-stage growth model
A 2-stage growth model divides growth into two phases: an initial phase which may generate higher growth, followed by a constant growth phase that is
sustainable into perpetuity.
Constant Growth Model EYIA utilized 2014 reported earnings per share of Ch$313.12 and the reported and
declared dividends for 2014. This results in a dividend payout ratio to net income of 55.0% for 2014. Following that, EYIA assumed a long-term dividend growth rate of 5.5%, which is reflective of the Companys historical growth rates, the
growth rate of AUMs in the AFP industry (5-year compounded annual growth rate of 9.8%) and growth of Chilean GDP and wages over the longer term.
2-Stage Growth Model Utilizing projections provided by MetLife management over the period of 2015 2017 (see Item 15. Additional
Information Other Material Information beginning on page 29), EYIA utilized the following inputs for the 2-stage growth model:
|
|
|
Payout ratio as a percent of net profit rising to 80.0% over the discrete projection period (i.e., by 2017), reverting to a longer term level of 55.0% based on discussions with MetLife management, the current payout
target, historical payouts, and general AFP industry payouts. |
|
|
|
A terminal year dividend growth rate of 4.2% was utilized based on projected long-term GDP growth rate for Chile, as provided by Business Monitor International. |
Further, an assessment is made of an appropriate risk-adjusted discount rate to apply to all the estimates of dividend payouts. The required
rate of return was measured through the use of the capital asset pricing model (CAPM). In each of the foregoing, EYIA utilized a cost of equity of 12.0% based on the CAPM.
EYIA also considered the following facts:
|
|
|
The Deposit Agreement allows the Depositary, at any time after March 18, 2015, to sell at public or private sale, at such place or places and upon such terms as it may deem proper, the Common Shares held by BNY
Mellon in its capacity as depositary of the ADR Program and thereafter hold the net proceeds of such sale, together with any other cash then held by the Depositary under the Deposit Agreement, for the pro rata benefit of holders of ADSs which have
not been surrendered; and |
25
|
|
|
The Purchase Agreement and the Deposit Agreement allow unaffiliated beneficial owners of the Subject Shares to continue to have the right to receive Common Shares upon surrender of their ADSs at any time prior to the
end of the 3rd business day prior to the Closing Date. |
In addition, EYIA conducted sensitivity analyses around different
payout ratios, cost of equity requirements, and long-term dividend growth rates.
The summary set forth above does not purport to be a
complete description of the analyses performed by EYIA in connection with the rendering of its opinion. The preparation of a fairness opinion involves various determinations as to the most appropriate and relevant quantitative and qualitative
methods of financial analyses and the application of those methods to the particular circumstances and, therefore, such an opinion is not readily susceptible to summary description. Accordingly, EYIA believes that its analyses must be considered as
a whole and that selecting portions of its analyses or the factors it considered, without considering all analyses and factors, could create a misleading or incomplete view of the process underlying its opinion.
In its analyses, EYIA made numerous assumptions with respect to industry performance, general business and economic and other matters, many of
which are beyond the control of the Filing Persons or the Company. Any estimates contained in these analyses are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less
favorable. Accordingly, these analyses and estimates are inherently subject to substantial uncertainty. EYIAs opinion and related analyses were only one of many factors considered by the Filing Persons in each of its evaluation of the proposed
Transaction.
Under the terms of Purchasers engagement letter with EYIA, Purchaser has paid EYIA a flat fee of $300,000 for
rendering the EYIA opinion. No portion of EYIAs fee is contingent on consummation of the Transaction. Whether or not the Transaction is consummated, Purchaser has agreed to reimburse EYIA for certain out-of-pocket expenses and to indemnify it
against specified liabilities relating to or arising out of services performed by EYIA in rendering its opinion.
EYIA and its affiliates
have in the past provided, currently are providing and in the future may provide assurance, tax, transaction and advisory services and other consulting services to the Filing Persons, the Company and certain of their respective affiliates, for which
EYIA and its affiliates have received, and may receive, compensation. In addition, certain of EYIAs affiliates maintain significant commercial (including customer) relationships with MetLife and certain of its affiliates, and certain of
EYIAs affiliates and their members also purchase insurance services from MetLife and its affiliates in the ordinary course of business. During the two years preceding the date of EYIAs opinion, certain of its affiliates have provided,
currently are providing and in the future may provide assurance, tax, transaction and advisory services and other consulting services to the Company for which compensation has been received or is intended to be received for the rendering of such
services. In the ordinary course of their respective businesses, EYIA, its affiliates, and their respective employees may have long or short positions, either on a discretionary or non-discretionary basis, for their own account or for those of their
clients, in the securities of the Filing Persons, the Company or various entities which might enter into a transaction with respect to the Transaction.
Item 10. |
Source and Amounts of Funds or Other Consideration |
(a) Source of Funds.
Purchaser will use its existing cash balance to fund the maximum amount of Ch$16,431,871,500.00 to be paid to the Depositary for the Subject
Shares in the Transaction, based on a maximum price per Common Share of Ch$3,300.00 pursuant to the Purchase Agreement.
(b) Conditions.
None.
26
(c) Expenses.
Estimated expenses related to the Transaction include:
|
|
|
Financial advisory fee: $300,000.00 |
|
|
|
Legal fees and expenses: $650,000.00 |
|
|
|
Printing and mailing costs: $18,000.00 |
MetLife and Purchaser have paid or will be responsible for paying all
of these expenses. No expenses related to the Transaction will be borne by the Company. The Depositary will pay any and all taxes or government charges, commissions, fees and other expenses under applicable law and the Deposit Agreement related to
the sale of the Subject Shares from the proceeds of such sale and will hold the net proceeds thereof for the benefit of the ADSs holders who do not surrender their ADSs by the third business day prior to the Closing Date.
(d) Borrowed Funds.
Not applicable.
Item 11. |
Interest in Securities of the Company |
(a) Securities Ownership.
The following table sets forth certain information regarding the beneficial ownership of Common Shares as of May 12, 2015 by the Filing
Persons (including the executive officers of MetLife and Purchaser and the directors of MetLife) and their majority-owned subsidiaries (where appropriate).
|
|
|
|
|
|
|
|
|
|
|
Common Shares |
|
Filing Person |
|
Amount and Nature of
Beneficial Ownership |
|
|
Percent of Class |
|
MetLife, Inc. |
|
|
308,928,816 |
(1) |
|
|
93.2 |
% |
MetLife Chile Inversiones Limitada |
|
|
|
|
|
|
|
|
MetLife, Inc. Executive Officers and Directors |
|
|
|
|
|
|
|
|
MetLife Chile Inversiones Limitada Executive Officers |
|
|
|
|
|
|
|
|
(1) |
MetLifes beneficial ownership includes 308,928,816 Common Shares beneficially owned by MetLife Chile Acquisition Co. S.A., an indirect wholly-owned subsidiary with address Agustinas 640, 22nd floor, Santiago,
Chile 8320219. |
(b) Securities Transactions.
Following the approval of the Merger by the shareholders of the Company at the Companys special shareholders meeting on
December 29, 2014, the dissenting shareholders of the Merger properly exercised withdrawal rights with respect to 3,295,861 Common Shares. Between February 27, 2015 and May 15, 2015, the Company made a cash payment to such dissenting
shareholders of Ch$3,555.28 per Common Share. Such Common Shares are considered outstanding under Chilean law until the earlier of (i) one year from the date in which the Company acquired them (when in accordance with Chilean law such treasury
shares are automatically deemed cancelled and no longer issued and outstanding) or (ii) the date on which the Company retires them as a result of the shareholders of the Company approving a resolution to such effect by means of a majority vote.
While such treasury shares are deemed issued and outstanding under Chilean law and counted as such for, among other things, the limited withdrawal rights of shareholders upon accumulation of more than 95.0% of the shares of the Company by the
controlling shareholder, they do not have voting rights, do not have rights to receive dividends or preemptive rights in connection with a capital increase and are not counted for shareholders meetings quorum purposes.
27
Item 12. |
The Solicitation or Recommendation |
(d) (e) Intent to Tender or Vote in a Going-Private
Transaction; Recommendations of Others.
Not applicable.
Item 13. |
Financial Statements |
(a) Financial Information.
The following table presents summary financial information for the Company as of and for the years ended December 31, 2014 and 2013 and as
of and for the three-month periods ended March 31, 2015 and March 31, 2014, specifically the statements of comprehensive income and cash flows, and has been derived from the audited consolidated financial statements of the Company included
in the Companys Annual Report on Form 20-F for the fiscal year ended December 31, 2014 filed with the SEC on April 30, 2015 and which is incorporated herein by reference. The summary financial information of the Company for the
three-month period as of, and ended on, March 31, 2015 has been derived from the Companys unaudited consolidated interim financial information for the three-month periods as of, and ended on, March 31, 2015 and March 31, 2014
previously furnished to the SEC on Form 6-K, dated May 1, 2015 and which is incorporated herein by reference.
The Companys
audited Consolidated Financial Statements as of and for the years ended December 31, 2014 and 2013 and the unaudited consolidated financial information for the three-month periods as of, and ended on, March 31, 2015 and March 31, 2014
are prepared in accordance with International Financial Reporting Standards, as issued by the International Accounting Standards Board.
The financial data as of and for each of the years ended December 31, 2014 and 2013 and for the three-month periods ended March 31,
2015 and March 31, 2014 in the table below are presented in nominal pesos. In general, amounts are expressed in millions of Chilean pesos except for ratios, operating data, Common Shares and ADS data.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of and for three months ended March 31, |
|
|
As of and for fiscal years ended December 31, |
|
|
|
2015
MCh$ |
|
|
2014
MCh$ |
|
|
2014
MCh$ |
|
|
2013
MCh$ |
|
Current assets |
|
|
87,684 |
|
|
|
93,906 |
|
|
|
94,196 |
|
|
|
62,976 |
|
Noncurrent assets |
|
|
340,380 |
|
|
|
328,757 |
|
|
|
328,757 |
|
|
|
293,020 |
|
Current liabilities |
|
|
64,125 |
|
|
|
68,866 |
|
|
|
69,156 |
|
|
|
79,202 |
|
Noncurrent liabilities |
|
|
50,740 |
|
|
|
48,612 |
|
|
|
48,612 |
|
|
|
34,787 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of and for three months ended March 31, |
|
|
As of and for fiscal years ended December 31, |
|
|
|
2015
MCh$ |
|
|
2014
MCh$ |
|
|
2014
MCh$ |
|
|
2013
MCh$ |
|
Revenues from operations (1) |
|
|
58,932 |
|
|
|
54,584 |
|
|
|
219,139 |
|
|
|
186,753 |
|
Expenses from operations (2) |
|
|
(24,495 |
) |
|
|
(21,067 |
) |
|
|
(96,861 |
) |
|
|
(95,236 |
) |
Income or loss from continuing operations before extraordinary items and cumulative effect of a change in accounting principle |
|
|
36,007 |
|
|
|
35,613 |
|
|
|
127,513 |
|
|
|
169,653 |
|
Net income or loss |
|
|
28,012 |
|
|
|
30,062 |
|
|
|
94,150 |
|
|
|
140,086 |
|
|
|
|
|
|
Income per Common Share from continuing operations (basic and diluted) (in Ch$) (3)(4) |
|
|
109 |
|
|
|
107 |
|
|
|
385 |
|
|
|
512 |
|
Net income per Common Share (basic and diluted) (in Ch$) (3)(4) |
|
|
85 |
|
|
|
91 |
|
|
|
284 |
|
|
|
423 |
|
|
|
|
|
|
Weighted average number of shares outstanding (in thousands) |
|
|
331,317 |
|
|
|
331,317 |
|
|
|
331,317 |
|
|
|
331,317 |
|
|
|
|
|
|
Ratio of earnings to fixed charges (5) |
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
Book value per Common Share as of March 31, 2015 (the date of the most recent balance sheet) |
|
|
945 |
|
|
|
|
|
|
|
|
|
|
|
|
|
28
(1) |
Revenues from operations include revenues from fee income, gains (losses) on mandatory investments and other revenues. |
(2) |
Expenses from operations include life and disability insurance premium expense, employee expenses, depreciation and amortization, impairment losses and miscellaneous other operating expenses. |
(3) |
Profit per share and per ADS data have been calculated on the basis of the weighted average number of shares outstanding during each fiscal year. |
(4) |
There have been no dilutive effects during all years presented, thus, basic and dilutive earnings per Common Share have the same value. |
(5) |
This ratio is not applicable to the Company. |
(b) Pro Forma Information.
Not applicable.
Item 14. |
Persons/Assets, Retained, Employed, Compensated or Used |
(a) (b) Solicitations or
Recommendations; Employees and Corporate Assets.
None.
Item 15. |
Additional Information |
(b) Golden Parachute Compensation.
Not applicable.
(c) Other Material
Information.
Certain Projections
On October 24, 2014, the Company provided MetLife and Purchaser with certain non-public projected and budgeted unaudited financial
information of the Company as of October 24, 2014, which was provided by MetLife and Purchaser to EYIA. A summary of the projections is set forth below.
The financial projections cover multiple years, and such information by its nature becomes subject to greater uncertainty with each successive
year. The projections reflect numerous variables and assumptions that are inherently uncertain and may be beyond the control of the Company, including but not limited to, meeting certain performance criteria and implementing certain cost saving
initiatives. In the projections, fee revenue is primarily driven by mandatory fee income that is charged on contributions. The fee rate is assumed to remain flat during the projection period, but mandatory fee income is projected to grow at a
compound annual growth rate of 9.7%, based on assumed salary inflation of 6.7% and growth in the actual number of contributors of 2.8%. Contributors are assumed to grow as Transfers In exceed Transfers Out, continuing a trend
that started with the initial acquisition of 91.38% of the total outstanding shares of the Company by MetLife in October, 2013. The two other sources of fee income are programmed withdrawals and voluntary fees, which are projected to grow at a
compound annual growth rate of between 9 and 10%. Employee and operating expenses are assumed to decline as a percentage of revenues from 2015-2017 due to operating efficiencies. There is a miscellaneous operating expense charge in 2015 due to
integration costs primarily related to information technology and re-branding. In addition, the projections do not take into account, among other things, events occurring after, or not known to the Companys management as of, the date such
projections were made. Important factors that may affect actual results and result in projected results not being achieved include, but are not limited to, general economic conditions in Chile and Ecuador; the monetary and interest rate policies of
the Chilean Central Bank (Banco Central de Chile); unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices; changes in Chilean and foreign laws, regulations and taxes; changes in competition
and pricing environments; natural disasters; the inability to hedge certain risks economically; the adequacy of loss reserves; technological changes; changes in consumer spending and saving habits and the Companys success in managing
29
the risks involved in the foregoing. The projections also may be affected by the Companys ability to achieve strategic goals, objectives and targets over the applicable period. The
assumptions upon which the projections were based necessarily involve judgments with respect to, among other things, future economic and competitive conditions which are difficult to predict and many of which are beyond the Companys control.
Moreover, the assumptions are based on certain business decisions that are subject to change. Therefore, there can be no assurance that the projections will be realized, and actual results may materially differ from those contained in the
projections.
The inclusion of the projections in this Transaction Statement should not be regarded as an indication that any of MetLife,
Purchaser or the Company or their respective affiliates, advisors or representatives considered or consider the projections to be necessarily predictive of actual future events, and the projections should not be relied upon as such. None of MetLife,
Purchaser or the Company or their respective affiliates, advisors, officers, directors or representatives can give any assurance that actual results will not differ from the projections, and none of them undertake any obligation to update or
otherwise revise or reconcile the projections to reflect circumstances existing after the date such projections were generated or to reflect the occurrence of future events even in the event that any or all of the assumptions underlying the
projections are shown to be in error. None of MetLife, Purchaser or the Company intend to make publicly available any update or other revisions to the projections. None of MetLife, Purchaser or the Company or their respective affiliates, advisors,
officers, directors or representatives have made or make any representation to any shareholder or other person regarding the ultimate performance of the Company compared to the information contained in the projections or that forecasted results will
be achieved. Neither the Company, MetLife, Purchaser nor their respective affiliates, advisors, officers, directors or representatives has made any representation to EYIA, in this Transaction Statement or otherwise, concerning the projections.
Neither MetLife nor Purchaser nor any of their respective affiliates or representatives makes any representation to any other person regarding the projections. The projections are included only because the projections were made available by MetLife
and Purchaser to EYIA prior to the date hereof.
READERS OF THIS TRANSACTION STATEMENT ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THE
PROJECTED INFORMATION PROVIDED IN THIS TRANSACTION STATEMENT
Below is a summary of the projected financial information of the Company
as of October 24, 2014 provided by the Company to MetLife and Purchaser on October 24, 2014, which was provided by MetLife and Purchaser to EYIA.
|
|
|
|
|
|
|
|
|
|
|
|
|
PROJECTED STATUTORY INCOME STATEMENT |
|
|
|
|
|
|
|
|
|
(in MCh$) |
|
2015 |
|
|
2016 |
|
|
2017 |
|
Revenues |
|
|
192,225 |
|
|
|
210,168 |
|
|
|
229,385 |
|
Gain on mandatory investments |
|
|
23,889 |
|
|
|
26,562 |
|
|
|
29,511 |
|
Employee expenses (less) |
|
|
(44,472 |
) |
|
|
(45,354 |
) |
|
|
(47,537 |
) |
Other operating expenses (less) |
|
|
(45,299 |
) |
|
|
(31,754 |
) |
|
|
(32,805 |
) |
Other income statement items (1) |
|
|
1,307 |
|
|
|
(2,250 |
) |
|
|
(2,014 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
STATUTORY PROFIT (LOSS) BEFORE TAX |
|
|
127,650 |
|
|
|
157,371 |
|
|
|
176,541 |
|
Income tax expense |
|
|
(28,160 |
) |
|
|
(36,595 |
) |
|
|
(42,469 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
STATUTORY PROFIT (LOSS) |
|
|
99,489 |
|
|
|
120,776 |
|
|
|
134,071 |
|
(1) |
Other income statement items include life and disability insurance premium expense, impairment losses, depreciation and amortization, finance costs, income (loss) from investments, share of the profit (loss) from equity
accounted associates, exchange differences, other non-operating income and other non-operating expenses. Share of the profit (loss) from equity accounted associates includes Genesis for 2015, but not for 2016 and 2017. |
30
|
|
|
|
|
|
|
|
|
|
|
|
|
PROJECTED CASH FLOW SCHEDULE |
|
|
|
|
|
|
|
|
|
(in MCh$) |
|
2015 |
|
|
2016 |
|
|
2017 |
|
EBIT (before Encaje income) |
|
|
103,761 |
|
|
|
130,810 |
|
|
|
147,030 |
|
Tax (excluding Encaje deferred taxes) |
|
|
(22,188 |
) |
|
|
(29,955 |
) |
|
|
(35,091 |
) |
Depreciation & amortization |
|
|
7,377 |
|
|
|
7,504 |
|
|
|
7,715 |
|
Profit from related companies (1) |
|
|
(6,409 |
) |
|
|
(4,387 |
) |
|
|
(4,826 |
) |
Dividends from related companies |
|
|
6,124 |
|
|
|
4,486 |
|
|
|
3,071 |
|
Capex |
|
|
(11,100 |
) |
|
|
(4,400 |
) |
|
|
(4,400 |
) |
Other investments (Encaje) |
|
|
(6,500 |
) |
|
|
(7,085 |
) |
|
|
(7,723 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flow |
|
|
71,065 |
|
|
|
96,973 |
|
|
|
105,775 |
|
(1) |
Includes Genesis for 2015, but not for 2016 and 2017. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROJECTED DIVIDENDS |
|
|
|
|
|
|
|
|
|
|
|
|
(in MCh$ except for percentages) |
|
2014 |
|
|
2015 |
|
|
2016 |
|
|
2017 |
|
Month of payment |
|
|
May 2015 |
|
|
|
May 2016 |
|
|
|
May 2017 |
|
|
|
May 2018 |
|
STATUTORY PROFIT |
|
|
103,757 |
|
|
|
99,489 |
|
|
|
120,776 |
|
|
|
134,071 |
|
ENCAJE RESULT |
|
|
(35,046 |
) |
|
|
(23,889 |
) |
|
|
(26,562 |
) |
|
|
(29,511 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STATUTORY PROFIT EXCL. ENCAJE INCOME |
|
|
77,472 |
|
|
|
81,573 |
|
|
|
100,855 |
|
|
|
111,938 |
|
|
|
|
|
|
DIVIDENDS |
|
|
57,068 |
|
|
|
74,800 |
|
|
|
96,500 |
|
|
|
107,238 |
|
DIVIDENDS AS A PERCENTAGE OF STATUTORY PROFIT |
|
|
55.00 |
% |
|
|
75.18 |
% |
|
|
79.90 |
% |
|
|
79.99 |
% |
DIVIDENDS AS A PERCENTAGE OF STATUTORY PROFIT EXCL. ENCAJE INCOME |
|
|
73.66 |
% |
|
|
91.70 |
% |
|
|
95.68 |
% |
|
|
95.80 |
% |
The above projections reflect the Companys forecasted results relating to its businesses existing as of
October 24, 2014 and new businesses then under development. In addition, the projections assumed the implementation of certain profitability improvement drivers and did not assume any new acquisitions or divestures. As noted above, the
projections for 2016 and 2017 were also prepared excluding the interests then held by the Company in Genesis.
The projections should be
read together with the Companys financial statements that can be obtained from the SEC. The projections should also be read together with the discussion under Risk Factors and the other cautionary statements contained in the
Companys Form 20-F for the fiscal year ended December 31, 2014 filed with the SEC on April 30, 2015, and subsequent SEC reports.
The projections were not prepared with a view to public disclosure or compliance with published guidelines of the SEC or the guidelines
established by the American Institute of Certified Public Accountants regarding projections or forecasts. The projections do not purport to present operations in accordance with International Financial Reporting Standards and the Companys
independent auditors have not examined, compiled or performed any procedures with respect to the projections presented in this Transaction Statement, nor have they expressed any opinion or any other form of assurance of such information or the
likelihood that the Company may achieve the results contained in the projections, and accordingly assume no responsibility for them.
Item 16.
Exhibits
|
|
|
(a) |
|
None. |
|
|
(b) |
|
None. |
|
|
(c)(1) |
|
Opinion of Ernst & Young Investment Advisers LLP, dated as of May 11, 2015.* |
31
|
|
|
|
|
(d)(1) |
|
Share Purchase Agreement, dated as of May 12, 2015, by and between The Bank of New York Mellon and MetLife Chile Inversiones Limitada (incorporated herein by reference to Exhibit 16 to the Companys Schedule 13D/A filed with
the U.S. Securities and Exchange Commission on May 12, 2015). |
|
|
(d)(2) |
|
American Depositary Share Purchase Agreement, dated as of March 28, 2014, by and between Little Oak Asset Management, LLC and MetLife Chile Acquisition Co. S.A. (incorporated herein by reference to Exhibit 6 to the
Companys Schedule 13D/A filed with the U.S. Securities and Exchange Commission on August 28, 2014). |
|
|
(d)(3) |
|
American Depositary Share Purchase Agreement, dated as of March 31, 2014, by and between CIBC World Markets Inc. and MetLife Chile Acquisition Co. S.A. (incorporated herein by reference to Exhibit 7 to the Companys Schedule
13D/A filed with the U.S. Securities and Exchange Commission on August 28, 2014). |
|
|
(d)(4) |
|
American Depositary Share Purchase Agreement, dated as of May 16, 2014, by and between Rangeley Capital Partners, L.P. and MetLife Chile Acquisition Co. S.A. (incorporated herein by reference to Exhibit 8 to the Companys
Schedule 13D/A filed with the U.S. Securities and Exchange Commission on August 28, 2014). |
|
|
(d)(5) |
|
American Depositary Share Purchase Agreement, dated as of August 22, 2014, by and between Rangeley Capital Partners, L.P. and MetLife Chile Acquisition Co. S.A. (incorporated herein by reference to Exhibit 9 to the Companys
Schedule 13D/A filed with the U.S. Securities and Exchange Commission on August 28, 2014). |
|
|
(d)(6) |
|
American Depositary Share Purchase Agreement, dated as of September 26, 2014, by and between CIBC World Markets Inc. and MetLife Chile Acquisition Co. S.A. (incorporated herein by reference to Exhibit 12 to the Companys
Schedule 13D/A filed with the U.S. Securities and Exchange Commission on November 17, 2014). |
|
|
(d)(7) |
|
American Depositary Share Purchase Agreement, dated as of September 26, 2014, by and between Rangeley Capital Partners, LLC and MetLife Chile Acquisition Co. S.A. (incorporated herein by reference to Exhibit 13 to the Companys
Schedule 13D/A filed with the U.S. Securities and Exchange Commission on November 17, 2014). |
|
|
(d)(8) |
|
American Depositary Share Purchase Agreement, dated as of September 26, 2014, by and between Andrew Lichtenstein, Inc. and MetLife Chile Acquisition Co. S.A. (incorporated herein by reference to Exhibit 14 to the Companys
Schedule 13D/A filed with the U.S. Securities and Exchange Commission on November 17, 2014). |
|
|
(f) |
|
None. |
|
|
(g) |
|
None. |
|
Schedules have been omitted. MetLife hereby undertakes to furnish supplementally copies of any of the omitted schedules upon request by the U.S. Securities and Exchange Commission. |
32
SIGNATURE
After due inquiry and to the best of each of the undersigneds knowledge and belief, each of the undersigned certifies that the
information set forth in this statement is true, complete and correct.
Dated as of: May 18, 2015
|
|
|
METLIFE, INC. |
|
|
By: |
|
/s/ William J. Wheeler |
Name: |
|
William J. Wheeler |
Title: |
|
President, Americas |
|
METLIFE CHILE INVERSIONES LIMITADA |
|
|
By: |
|
/s/ Randal W. Haase |
Name: |
|
Randal W. Haase |
Title: |
|
Authorized Representative |
33
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF METLIFE
The following table sets forth the name, business address, material occupations, positions, offices and employment during the past five years,
the starting and ending dates of each occupation, position, office or employment and the name, principal business and address of any corporation or other organization in which such occupation, position, office or employment is conducted of each
director and executive officer of MetLife. Each such person is a citizen of the United States of America, with the exception of John C.R. Hele, Franciscus Hijkoop, Michel Khalaf and Christopher G. Townsend, who are citizens, respectively, of Canada,
the Netherlands, the Republic of Lebanon and the United Kingdom of Great Britain and Northern Ireland.
|
|
|
|
|
|
|
|
|
|
|
Name of Director
or Executive |
|
Business
Address |
|
Present
Principal Occupation or Employment |
|
Name, Principal Business and Address of
Present Employment |
|
Material Occupations,
Positions, Offices or Employment During
the Past Five Years |
|
Name, Principal Business and Address of Past
Employment |
|
|
|
|
|
|
Steven A. Kandarian |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
Chairman of the Board, Chief Executive Officer and President |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
Chairman of the Board, MetLife, Inc.
(January 2012-present)
President and Chief Executive Officer of MetLife, Inc. (May 2011-present)
Executive Vice
President and Chief Investment Officer, MetLife, Inc. (April 2005-April 2011) |
|
MetLife, Inc.
200 Park Avenue New York, N.Y. 10166 |
|
|
|
|
|
|
Ricardo A. Anzaldua |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
Executive Vice President and General Counsel |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
Executive Vice President and General Counsel, MetLife, Inc. (December 2012-present) |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Associate General Counsel and Senior Vice President, director of Commercial and Consumer Markets Law, The
Hartford Financial Services Group, Inc. (October 2010-December 2012) |
|
The Hartford Financial Services Group, Inc. (an insurance and financial services company)
2 Park Avenue New York, N.Y.
10016 |
34
|
|
|
|
|
|
|
|
|
|
|
Name of Director
or Executive |
|
Business
Address |
|
Present
Principal Occupation or Employment |
|
Name, Principal Business and Address of
Present Employment |
|
Material Occupations,
Positions, Offices or Employment During
the Past Five Years |
|
Name, Principal Business and Address of Past
Employment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Associate General Counsel and Senior Vice President, Director of Corporate Law, The Hartford Financial
Services Group, Inc. (February 2007-October 2010); Corporate Secretary (February 2008-October 2010) |
|
|
|
|
|
|
|
|
Steven J. Goulart |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
Executive Vice President and Chief Investment Officer |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
Executive Vice President and Chief Investment Officer, MetLife, Inc. (May 2011-present) |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Head of the Portfolio Management Unit as Senior Managing Director, Metropolitan Life Insurance Company
(January 2011-April 2011) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior Vice President and Treasurer, MetLife, Inc. (July 2009-April 2011) |
|
|
|
|
|
|
|
|
John C.R. Hele |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
Executive Vice President and Chief Financial Officer |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
Executive Vice President and Chief Financial Officer, MetLife, Inc. (September 2012-present) |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Vice President, Chief Financial Officer and Treasurer, Arch Capital Group Ltd (April
2009-August 2012) |
|
Arch Capital Group Ltd. (an insurance and reinsurance company)
45 Reid Street 5th Floor
Hamilton, Bermuda
HM12 |
35
|
|
|
|
|
|
|
|
|
|
|
Name of Director
or Executive |
|
Business
Address |
|
Present
Principal Occupation or Employment |
|
Name, Principal Business and Address of
Present Employment |
|
Material Occupations,
Positions, Offices or Employment During
the Past Five Years |
|
Name, Principal Business and Address of Past
Employment |
|
|
|
|
|
|
Franciscus Hijkoop |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
Executive Vice President and Chief Human Resources Officer |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
Executive Vice President and Chief Human Resources Officer, MetLife,
Inc. (August 2011-present)
Chief Personnel Officer and Senior Vice President of Human Resources, American Foods
division, PepsiCo Inc., (January 2008-August 2011) |
|
PepsiCo Inc. (a food and beverage company) 700
Anderson Hill Road Purchase New York, N.Y.
10577 |
|
|
|
|
|
|
Michel Khalaf |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
President, EMEA |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
President, EMEA (Europe, Middle East and Asia), MetLife, Inc. (November 2011-present) |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Vice President, Metropolitan Life Insurance Company
(January 2011-November 2011)
Regional President, Middle East, Africa and South Asia, Alico (November 2008-November
2011) (Mr. Khalaf joined MetLife as a result of the acquisition of ALICO) |
|
|
|
|
|
|
|
|
Esther S. Lee |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
Executive Vice President and Global Chief Marketing Officer |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
Executive Vice President and Global Chief Marketing Officer, MetLife, Inc. (January
2015-present) |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
36
|
|
|
|
|
|
|
|
|
|
|
Name of Director
or Executive |
|
Business
Address |
|
Present
Principal Occupation or Employment |
|
Name, Principal Business and Address of
Present Employment |
|
Material Occupations,
Positions, Offices or Employment During
the Past Five Years |
|
Name, Principal Business and Address of Past
Employment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior Vice President, Brand Marketing, Advertising and Sponsorships, AT&T, Inc. (August
2011-December 2014) |
|
AT&T, Inc. (a communications company) 208
S. Akard St. Dallas, TX 75202 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior Vice President, Brand Marketing and Advertising, AT&T, Inc. (June 2009-July 2011) |
|
|
|
|
|
|
|
|
Martin J. Lippert |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
Executive Vice President and Head of Global Technology and Operations |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
Executive Vice President and Head of Global Technology and Operations,
MetLife, Inc. (November 2011-present)
Executive Vice President and Head of Global Technology, MetLife, Inc. (September
2011-November 2011) |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
|
|
|
|
|
Maria R. Morris |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
Executive Vice President, Global Employee Benefits |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
Executive Vice President and Head of Global Employee Benefits, MetLife, Inc. (November
2011-present) |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Vice President, Global Operations, Integration, MetLife, Inc. (September 2011-November
2011) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Vice President, Technology and Operations, MetLife, Inc. (January 2008-September 2011) |
|
|
37
|
|
|
|
|
|
|
|
|
|
|
Name of Director
or Executive |
|
Business
Address |
|
Present
Principal Occupation or Employment |
|
Name, Principal Business and Address of
Present Employment |
|
Material Occupations,
Positions, Offices or Employment During
the Past Five Years |
|
Name, Principal Business and Address of Past
Employment |
|
|
|
|
|
|
Christopher G. Townsend |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
President, Asia |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
President, Asia, MetLife, Inc. (August 2012-present) |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
|
|
|
|
|
|
|
Chief Executive Officer of the Asia Pacific Region, Chartis (January 2010-April 2012) |
|
Chartis Asia Pacific (a unit of AIG, an insurance and financial services company)
Chartis Building, 78 Shenton Way #11-16 Singapore
079120 |
|
|
|
|
|
|
William J. Wheeler |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
President, Americas |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
President, Americas, MetLife, Inc. (November 2011-present)
Executive Vice
President and Chief Financial Officer, MetLife, Inc. (December 2003-November 2011) |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
|
|
|
|
|
Cheryl W. Grisé |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
Former Executive Vice President, Northeast Utilities |
|
N/A |
|
None |
|
N/A |
|
|
|
|
|
|
Carlos M. Gutierrez |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
Co-Chair, Albright Stonebridge Group |
|
Albright Stonebridge Group 601 13th Street, NW,
Suite 500 Washington, D.C. 20005 |
|
Co-Chair, The Albright Stonebridge Group (February 2014-present)
Vice Chair, The
Albright Stonebridge Group (April 2013-February 2014) |
|
Albright Stonebridge Group (a consulting firm) 601 13th Street, NW, Suite 500
Washington, D.C. 20005 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vice Chairman, Institutional Client Group, Citigroup Inc. (January 2011 February 2013) |
|
Citigroup Inc. (a financial services corporation)
399 Park Avenue New York, N.Y.
10043 |
38
|
|
|
|
|
|
|
|
|
|
|
Name of Director
or Executive |
|
Business
Address |
|
Present
Principal Occupation or Employment |
|
Name, Principal Business and Address of
Present Employment |
|
Material Occupations,
Positions, Offices or Employment During
the Past Five Years |
|
Name, Principal Business and Address of Past
Employment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chairman and Founding Consultant of Global Political Strategies, a division of APCO Worldwide, Inc.
(2010-2011) |
|
APCO Worldwide (a consulting firm) 700 12th
Street, NW, STE 800 Washington, D.C. 20005 |
|
|
|
|
|
|
R. Glenn Hubbard |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
Dean and Russell L. Carson Professor of Economics and Finance, Graduate School of Business, Columbia University |
|
Graduate School of Business Columbia
University 3022 Broadway Uris Hall, Room 101
New York, N.Y. 10027 |
|
Dean, Graduate School of Business, Columbia University
(2004-present)
Russell L. Carson Professor of Economics and Finance, Graduate School of Business,
Columbia University (1994-present) |
|
Columbia Business School 3022 Broadway
Uris Hall, Room 101 New York, N.Y.
10027-6902 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Professor of Economics, Faculty of Arts and Sciences, Columbia University (1997-present) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Co-Chair, Committee on Capital Markets Regulation (2006-present) |
|
Committee on Capital Markets Regulation (an independent nonprofit research organization)
125 Mt. Auburn St., 3rd Floor Cambridge, MA 02138 |
|
|
|
|
|
|
Alfred F. Kelly, Jr. |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
Former Chairman of the Board, President and Chief Executive Officer, NY/NJ Super Bowl Host Company |
|
N/A |
|
Chairman of the Board, President and Chief Executive Officer, NY/NJ Super Bowl Host Company (April
2011-August 2014) |
|
NY/NJ Super Bowl Host Company (a nonprofit fundraising and planning organization)
680 Fifth Avenue 5th Floor
New York, N.Y.
10019 |
39
|
|
|
|
|
|
|
|
|
|
|
Name of Director
or Executive |
|
Business
Address |
|
Present
Principal Occupation or Employment |
|
Name, Principal Business and Address of
Present Employment |
|
Material Occupations,
Positions, Offices or Employment During
the Past Five Years |
|
Name, Principal Business and Address of Past
Employment |
|
|
|
|
|
|
Edward J. Kelly, III |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
Former Chairman, Institutional Clients Group, Citigroup, Inc. |
|
N/A |
|
Chairman, Institutional Clients Group, Citigroup Inc. (January
2011-July 2014)
Chairman, Global Banking, Citigroup Inc. (April 2010-January 2011)
Vice Chairman,
Citigroup Inc. (July 2009- March 2010) |
|
Citigroup Inc. (a financial services corporation)
399 Park Avenue New York, N.Y. 10043 |
|
|
|
|
|
|
William E. Kennard |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
Former Senior Advisor, Grain Management, LLC |
|
Velocitas Partners LLC 160 Greentree
Drive, Suite 101 Dover, DE 19904 |
|
Co-Founder and Non-Executive Chairman, Velocitas Partners LLC (November 2013-present) |
|
Velocitas Partners LLC (an asset management firm)
160 Greentree Drive, Suite 101 Dover, DE 19904 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Member of Operating Executive Board, Staple Street Capital (November 2013-present) |
|
Staple Street Capital (a private equity firm)
590 Madison Avenue 22nd Floor
New York, N.Y. 10022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States Ambassador to the European Union (December 2009-August 2013) |
|
United States Department of State 1600 Pennsylvania Avenue NW
Washington, D.C. 20500 |
|
|
|
|
|
|
James M. Kilts |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
Partner, Centerview Capital |
|
Centerview Capital 3 Greenwich Office Park,
2nd Floor Greenwich, CT 06831 |
|
Partner, Centerview Capital (October 2006-present) |
|
Centerview Capital (a private equity firm) 3
Greenwich Office Park, 2nd Floor Greenwich, CT
06831 |
40
|
|
|
|
|
|
|
|
|
|
|
Name of Director
or Executive |
|
Business
Address |
|
Present
Principal Occupation or Employment |
|
Name, Principal Business and Address of
Present Employment |
|
Material Occupations,
Positions, Offices or Employment During
the Past Five Years |
|
Name, Principal Business and Address of Past
Employment |
|
|
|
|
|
|
Catherine R. Kinney |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
Former President and Co-Chief Operating Officer, New York Stock Exchange, Inc. |
|
N/A |
|
None |
|
N/A |
|
|
|
|
|
|
Denise M. Morrison |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
President and Chief Executive Officer, Campbell
Soup Company |
|
Campbell Soup Company 1 Campbell Place
Camden, N.J. 08103-1701 |
|
President and Chief Executive Officer, Campbell Soup Company (August
2011-present)
Executive Vice President and Chief Operating Officer, Campbell Soup Company (October
2010-July 2011)
President, North America Soup, Sauces and Beverages, Campbell Soup Company (October
2007-September 2010) |
|
Campbell Soup Company (a food and beverage company)
One Campbell Place Camden, N.J.
08103 |
|
|
|
|
|
|
Kenton J. Sicchitano |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
Former Global Managing Director, Pricewaterhouse Coopers LLP |
|
N/A |
|
None |
|
N/A |
|
|
|
|
|
|
Lulu C. Wang |
|
MetLife, Inc. 200 Park Avenue
New York, N.Y. 10166 |
|
Chief Executive Officer, Tupelo Capital Management LLC |
|
Tupelo Capital Management LLC
340 Madison Avenue, 19th Floor
New York, N.Y. 10173 |
|
Founder and Chief Executive Officer, Tupelo Capital Management LLC (1997-present) |
|
Tupelo Capital Management L.L.C. (an investment management firm)
340 Madison Avenue 19th Floor
New York, N.Y. 10173 |
41
SCHEDULE II
OFFICERS OF PURCHASER
The following table sets forth the name, business address, material occupations, positions, offices and employment during the past five years,
the starting and ending dates of each occupation, position, office or employment and the name, principal business and address of any corporation or other organization in which such occupation, position, office or employment is conducted of each
executive officer of Purchaser. Each such person is a citizen of Chile, with the exception of Randal William Haase, who is a citizen of the United States of America. As a Chilean limited liability company (sociedad de responsabilidad
limitada), Purchaser does not have any directors and MetLife acts as managing member (socio administrador) of Purchaser.
|
|
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|
|
|
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Name of Director or
Executive |
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Business
Address |
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Present
Principal Occupation or Employment |
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Name, Principal Business and Address of Employment |
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Material Occupations, Positions, Offices or Employment During the Past Five Years |
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Name, Principal Business and Address of Past Employment |
Randal William Haase |
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MetLife, Inc. 1095 Avenue of the Americas
New York, N.Y. 10036 |
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Vice President, New Business Development |
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MetLife, Inc. 1095 Avenue of the Americas
New York, N.Y. 10036 |
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Vice President, Corporate Development, Mergers &
Acquisitions (through December 2012)
Vice President, New Business Development (January 2013-current) |
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MetLife, Inc. 1095 Avenue of the Americas
New York, N.Y. 10036 |
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Pablo Iacobelli del Río |
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Isidora Goyenechea 2800, piso 43, Las Condes, Santiago, Chile |
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Partner |
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Carey y Cía Ltda. Isidora Goyenechea
2800, piso 43 Las Condes, Santiago, Chile |
|
Partner |
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Carey y Cía Ltda. Isidora Goyenechea
2800, piso 43 Las Condes, Santiago, Chile |
|
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Jaime Carey Tagle |
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Isidora Goyenechpea 2800, piso 43, Las Condes, Santiago, Chile |
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Partner |
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Carey y Cía Ltda. Isidora Goyenechea
2800, piso 43 Las Condes, Santiago, Chile |
|
Partner |
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Carey y Cía Ltda. Isidora Goyenechea
2800, piso 43 Las Condes, Santiago, Chile |
42
Exhibit (c)(1)
11 May 2015
MetLife Chile Inversiones
Limitada
Att: Mr. Randal Haase
1095 Avenue of the Americas
New York, New York 10036
Ladies and Gentlemen:
We understand that MetLife Chile Inversiones Limitada (Purchaser, you or Client), a Chilean limited
liability company and indirect wholly-owned subsidiary of MetLife, Inc., a Delaware corporation (MetLife) proposes to enter into a Share Purchase Agreement (the Purchase Agreement) whereby, upon the terms and
subject to the conditions set forth in the Purchase Agreement, you will purchase all of the Common Shares (the Subject Shares) of Administradora de Fondos de Pensiones Provida S.A. (Provida or the
Company), a Chilean corporation indirectly controlled (through a 93.2% equity interest) by MetLife, held by The Bank of New York Mellon (the Depositary), as depositary of the American Depositary Shares
(ADSs) of the Company that are subject to that certain terminated deposit agreement, dated as of 22 November 1994, as amended and restated as of 7 February 1996, as further amended and restated as of 19 August 1999
(the Deposit Agreement), among the Company, the Depositary and all holders from time to time of the ADSs issued thereunder. We refer to the acquisition by Purchaser of the Subject Shares pursuant to the Transaction Agreement as
the Transaction and to the unaffiliated beneficial owners of the Subject Shares as the Unaffiliated ADS Holders. The terms and conditions of the Transaction will be set forth more fully in the Purchase Agreement
to be executed by Purchaser and the Depositary.
Pursuant to the Purchase Agreement, the purchase price per Common Share of Provida (the Provida
Common Shares) to be paid by Purchaser in the Transaction will be equal to the volume weighted average price at which the Provida Common Shares have settled in the Santiago Stock Exchange (Bolsa de Valores) during the period beginning on
7 May 2015 and ending on the third (3rd) business day prior to the Closing Date (as defined in the Purchase Agreement), except that the purchase price per Common Share shall in no event be less than CLP$3,092.05 or, subject to the terms of
the Purchase Agreement, more than CLP$3,300.00 (the Purchase Price), without interest or adjustment.
You have asked Ernst &
Young Investment Advisers LLP (we or EYIA) to advise you as to the fairness to the Unaffiliated ADS Holders, from a financial point of view, of the Purchase Price to be paid by Purchaser to the Depositary
pursuant to the Purchase Agreement.
MetLife Chile Inversiones Limitada
11 May 2015
Page
2
For the purpose of this opinion, we have, among other things:
1. |
reviewed a draft dated as of 11 May 2015 of the Purchase Agreement, |
2. |
reviewed certain publicly available information concerning Purchaser, MetLife and Provida that we believe to be relevant to our analysis, including, without limitation, (a) the 6 August 2013 MetLife Schedule
TO and related amendments and financial projections filed in connection with MetLifes acquisition of a majority of the Provida Common Shares (including Provida Common Shares represented by ADSs) (Initial Transaction),
(b) the 3 September 2013 Provida Schedule 14D-9 filed in connection with the Initial Transaction, (c) the 11 March 2015 Provida Form 6-K disclosing Providas financial results for the Fiscal Year ended 31 December 2014,
(d) the 11 October 2013 MetLife Schedule 13D and related amendments (the Schedule 13D) relating to the beneficial ownership of MetLife and its affiliates of shares of Provida, (e) the 19 November 2014 MetLife
Chile Acquisition Co. S.A. Form F-4 and related amendments (the F-4), (f) the 11 March 2015 MetLife Form 8-K and related materials presented at MetLifes 11 March 2015 Latin America Investor Day Conference,
(g) the Provida Annual Report on Form 20-F for Fiscal Year ended 31 December 2014, and (h) the 1 May 2015 Provida Form 6-K disclosing Providas financial results for the first quarter of 2015, |
3. |
reviewed the Deposit Agreement, |
4. |
held discussions with members of management of MetLife and Purchaser and its legal counsel regarding the Transaction, the information provided by you and management of MetLife, and publicly available information,
|
5. |
reviewed certain financial information provided to us by you and management of MetLife, |
6. |
reviewed and compared the Purchase Price to (a) the purchase price paid by affiliates of MetLife in private acquisitions of ADSs and Provida Common Shares since the Initial Transaction as disclosed in the Schedule
13D, (b) the withdrawal price paid by Provida pursuant to the limited withdrawal rights for holders of Provida Common Shares in connection with the proposed merger described in the F-4 under Chilean law as described by MetLife and
(c) alternative withdrawal prices, including book value per Provida Common Share, that would be available to holders of Provida Common Shares under certain circumstances, including in connection with MetLife acquiring 95.0% or more of the
equity of Provida, |
7. |
conducted a market analysis for Provida Common Shares on a fair market value basis using a dividend discount model (DDM), based on prospective Provida financial information for the years 2015 to 2017
provided to us by management of MetLife, |
8. |
reviewed the financial terms of certain other unrelated third party precedent business combinations that we deemed generally relevant, |
9. |
compared certain publicly available financial data of companies whose securities are traded in the public markets and that we deemed relevant to similar data for Provida, |
MetLife Chile Inversiones Limitada
11 May 2015
Page
3
10. |
reviewed the historical stock prices and trading volumes of Provida Common Shares, and |
11. |
reviewed such other financial studies and analyses and considered such other matters as we have deemed appropriate. |
For purposes of our review and in arriving at our opinion, we have relied upon publicly available information and non-public information regarding you,
MetLife or the Company that was provided by you or management of MetLife. We did not review analyses, opinions or board presentations from the Initial Transaction, and we did not have discussions with management of Provida.
In connection with our review and in arriving at our opinion, we have assumed and relied upon the accuracy and completeness of all of the financial, legal,
regulatory, tax, accounting and other information discussed with, made available to, or used by us for purposes of this opinion and have neither attempted to verify independently nor assumed responsibility for verifying any of such information. In
addition, we have assumed, with your consent, that the Transaction will be consummated upon the terms and subject to the conditions set forth in the draft dated as of 11 May 2015 of the Purchase Agreement, without waiver, modification or
amendment of any material term, condition or agreement thereof. We have, with your and MetLifes consent, assumed that all governmental, regulatory or other consents and approvals necessary for the consummation of the Transaction will be
obtained without any adverse effect on Provida or on the expected benefits of the Transaction in any way meaningful to our analysis. We were not requested to solicit, and did not solicit, interest from other parties with respect to an acquisition of
the Subject Shares or for any other security of Provida. We have not assumed any responsibility for or made or obtained any independent evaluation, appraisal or physical inspection of the assets or liabilities of Provida nor have we evaluated the
solvency or fair value of Provida under any state, federal or foreign laws relating to bankruptcy, insolvency or similar matters. Our opinion is based on economic, monetary and market conditions as they exist and can be evaluated as of the date
hereof and we assume no responsibility to update or revise our opinion based upon circumstances and events occurring after the date hereof. With respect to the prospective financial information provided to us by management of MetLife, we have
assumed, with your consent and based upon discussions with such management, that such forecasts have been reasonably prepared on bases reflecting the best currently available estimates and judgments of such management, at the time of preparation, of
the future operating and financial performance of Provida. We express no opinion with respect to any of such forecasts or the assumptions on which they were based.
Our opinion as expressed herein is limited to the fairness to the Unaffiliated ADS Holders, from a financial point of view, of the Purchase Price to be paid
by Purchaser to the Depositary pursuant to the Purchase Agreement, and we express no opinion as to the fairness of any other agreement, arrangement, transaction or understanding among any of MetLife, the Purchaser, Provida, any of their respective
affiliates, the Depositary and the Unaffiliated ADS Holders, or any consideration received in connection therewith by the Unaffiliated ADS Holders or the holders of any other securities of Provida, creditors or other constituencies of Provida, or
the relative merits of the Transaction as compared to alternative transactions that might be available to Purchaser, the Unaffiliated ADS Holders or the Depositary. We are not expressing any opinion as to the prices at which the Subject Shares or
any other securities of Provida will actually trade at any time. Our opinion does not constitute advice or a recommendation to any holder of Provida Common Shares as to any matter or course of action available to such holder relating to the
Transaction or the effects thereof. The opinion should not be construed by Provida or Providas stockholders as constituting investment advice.
We
have not acted as financial advisor to MetLife, the Purchaser or the Depositary in connection with the Transaction, and were only engaged to render this opinion. We will receive a fee for our services, a portion of which is payable upon the
rendering of this opinion. No part of our fee is contingent on the conclusions of this opinion. In addition, MetLife and Purchaser have agreed to indemnify us and certain related parties for certain liabilities and other matters arising out of or
related to our engagement and to reimburse us for certain out of pocket expenses.
MetLife Chile Inversiones Limitada
11 May 2015
Page
4
We and our affiliates have in the past provided, currently are providing and in the future may provide
assurance, tax, transaction and advisory services and other consulting services to MetLife, Purchaser and certain of their respective affiliates, for which we and such affiliates have received, and may receive, compensation. In addition, certain of
our affiliates maintain significant commercial (including customer) relationships with MetLife and certain of its affiliates, and certain our affiliates and their members also purchase insurance services from MetLife and its affiliates in the
ordinary course of business. During the two years preceding the date of this opinion, certain of our affiliates have provided, currently are providing and in the future may provide assurance, tax, transaction and advisory services and other
consulting services to Provida for which compensation has been received or is intended to be received for the rendering of such services. In the ordinary course of their respective businesses, we, our affiliates, and their respective employees may
have long or short positions, either on a discretionary or non-discretionary basis, for their own account or for those of their clients, in the securities of MetLife, Provida or other persons who may have an interest in connection with the
Transaction.
This letter and the opinion expressed herein are provided at the request of Purchaser and for the benefit and use of each of MetLife and
Purchaser, including, without limitation, as filing persons of the Schedule 13E-3 to be filed with the U.S. Securities and Exchange Commission (the SEC) in connection with the Transaction and only in connection with consideration
of the Transaction and may not be quoted or referred to or used for any purpose without our prior written consent, except that this letter and the opinion expressed herein may be reproduced and included in a Schedule 13E-3 filing and any subsequent
amendments to such Schedule 13E-3 filing made by Purchaser and MetLife, or any other filing required to be made by MetLife or Purchaser as required under Chilean law in connection with the Transaction and in materials required to be delivered to
shareholders of Provida which are part of such filings, if and only if this opinion is reproduced in such document in its entirety. This opinion has been approved by our authorized internal review committee.
Based upon and subject to the foregoing, it is our opinion that, as of the date hereof, the Purchase Price to be paid by Purchaser to the Depositary pursuant
to the Purchase Agreement is fair to the Unaffiliated ADS Holders from a financial point of view.
/s/ Ernst & Young Investment Advisers LLP