Gulf General gets offer from BlueFive to subscribe to new shares

Gulf General Cooperative Insurance Co. signed on Nov. 28 a non-binding offer (NBO) from investment firm BlueFive Capital (BlueFive), under which BlueFive intends to subscribe to new cash shares in the Saudi insurer by way of a capital increase with the suspension of pre-emptive rights.

 

The NBO requires Gulf General to reduce its capital to offset all or part of its accumulated losses, followed by a capital increase with the suspension of rights issue for existing shareholders, for an amount equivalent to the capital reduction.

 

BlueFive would subscribe in cash to new shares at SAR 10 per share, Gulf general said in a statement to Tadawul.

 

The NBO expires on the signing of binding agreements, or after two months from Nov. 24 (unless extended by written consent), or if the parties agree to end the negotiations on the proposed transaction.

 

The NBO is subject to necessary regulatory approvals, including from the Insurance Authority and the Capital Market Authority (CMA). It also requires shareholders’ approval and meeting other conditions that will be included in the binding agreements.

 

Gulf General stated that the terms, structure, and execution mechanism of the proposed transaction will be defined within the binding agreements, and that the financial impact will be announced later.

 

The Saudi-listed firm appointed GIB Capital as its financial advisor, while BlueFive appointed SNB Capital as its financial advisor.

 

The company further noted that there are no related parties involved in the proposed transaction, but there is a conflict of interest for one board member, Saud Alsulaiman, due to his minority stake in BlueFive.