SET-listed Sri Ayudhya Capital Plc (AYUD) is continuing talks with Allianz SE on integrating the two insurance firms after the deal hit a snag when AYUD earlier this year failed to win the minimum votes required from shareholders.
AYUD chairman Veraphan Teepsuwan believes that the company's shareholders will manage to push the merger plan in the future and the company's shares at that time will be more promising as insurance giant Allianz will hold a sizeable stake and play a vital role in AYUD.
But he did not disclose when the merger plan will be brought to shareholders for approval again.
The company's extraordinary shareholder meeting was held in January, in which 67.7% of AYUD shareholders who attended the meeting approved the acquisition plan, below the 75% required minimum of shareholders at the meeting, while 27.4% of shareholders voted against the plan, 4.9% abstained and the remainder were invalid ballots.
As the acquisition agenda failed to win shareholder approval, other agenda matters related to the plan, including recapitalisation, were not brought forward at the meeting.
Allianz SE and AYUD late last year announced that they had entered into agreements worth a combined 5.15 billion baht to swap Allianz Ayudhya Assurance shares for AYUD shares and let AYUD's wholly owned subsidiary SAGI acquire the entirety of Allianz General Insurance.
The share swap and acquisition deals are aimed at improving services for insurers and winning a larger slice of the Thai insurance market.
Under the plan, AYUD will raise capital by issuing 96.5 million shares, of which 73 million shares worth 3.9 billion baht will be offered to Allianz and its affiliate CPRN Thailand (CPRNT) for a 11.8% stake in Allianz Ayudhya Assurance.
The remaining 23.5 million shares will be sold to CPRNT for 1.25 billion baht, at a price of 53.43 baht.
Proceeds from the newly issued shares sold to CPRNT will be used to buy newly issued shares of SAGI, which in turn will be used to acquire Allianz General Insurance.
Allianz, together with CPRNT, will become the largest shareholder in AYUD -- the insurance holding firm -- with a 40% stake, while AYUD's share in Allianz Ayudhya Assurance will be raised to 32%. Allianz owns a 16.8% stake in AYUD.
In the meantime, Mr Veraphan said the company's free warrants to be offered to shareholders at a ratio of two held shares for a unit of warrant can yield higher returns than interim dividends.
The company plans to issue up to 125 million units of warrants to shareholders. Each warrant can be converted into one common share at a price of 39 baht each.
The warrant issuance is subject to approval from shareholders at a meeting this Friday.
AYUD shares closed yesterday on the Stock Exchange of Thailand at 47.25 baht, up 25 satang, in trade worth 2.49 million baht.
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