On 22 August 2008, Aon Corporation (Aon) and Benfield Group Limited (Benfield) announced that the boards of both companies had unanimously approved an agreement under which Aon will acquire Benfield for £3.50 per share in cash and assume approximately £91 million of Benfield's net debt, representing an enterprise value of £935 million ($1.75 billion) on a fully diluted basis.
Under the UK's Takeover Code, which will apply as Benfield's shares are listed on the London Stock Exchange, Aon must now post an offer document to Benfield's shareholders within 28 days of the announcement, ie by 19 September 2008. The offer must initially be open for at least 21 days following the date on which the offer document is posted. Aon must make an announcement as to acceptance levels on the business day following the day on which the offer is due to expire or is declared unconditional as to acceptances (meaning that a level of acceptances by Benfield's shareholders has been reached such that Aon agrees to buy their shares), or is revised or extended. After 60 days Aon must announce whether the offer has lapsed or become unconditional as to acceptances.
Aon has received undertakings to accept the offer from 25.4% of Benfield's shareholders. It is likely that these undertakings will only be released in the event of a materially higher offer for Benfield from a third party.
The acquisition will be subject to the usual conditions, in particular the approval of Benfield's regulators, including the Financial Services Authority in the UK, and any necessary antitrust approvals or filings.