Trade Indemnity agrees pounds 177m offer from French

JOHN EISENHAMMER

Financial Editor

Trade Indemnity, the British credit risk insurance company, has agreed a pounds 177m cash offer from the French Compagnie Financiere SFAC, continuing the international consolidation in the sector.

The offer is 97p in cash a share, and shareholders in Trade Indemnity will be entitled to a second interim dividend of 1.4p net per share.

SFAC said the offer represented a 33 per cent premium over Trade Indemnity's share price at the close of business on 31 January 1995.

SFAC's biggest shareholder is the French insurance company, AGF, which owns a direct 49.9 per cent stake.

The main company in the SFAC group specialises in domestic credit transactions in the French commercial market.

Trade Indemnity is a UK market leader in the provision of domestic short- term trade credit insurance and has a growing export credit insurance book.

Both companies have reacted to growing demand from customers for cover outside domestic areas of operation.

"Our clients are becoming increasingly global in the scope and scale of their operations. It is essential that the credit insurance industry develops to meet these demands," said John Bishop, chief executive of Trade Indemnity, who will join the new group's management board.

"We have been working closely with Compagnie Financiere SFAC for many years and are convinced that a partnership with them provides the best way to achieve this objective."

Undertakings to accept the offer have been received from Commercial Union, Guardian Royal Exchange, Munich Re and Swiss Re in respect of 53 per cent of Trade Indemnity's share capital.

The boards of the two companies said the creation of the new group would bring strong commercial benefits and create new opportunities, building on their respective market positions in the UK and France.

Trade Indemnity's performance in the second half of 1995 has continued in line with management expectations, following good first-half interims, the company said.

Preliminary full-year results will be published in the middle of this month.

Paul Henri Denieuil, chairman and chief executive of SFAC, said:

"We have recognised that the successful future development of international trade credit insurance requires the capability to deliver genuinely multi- national risk coverage combined with locally provided service."