Chubb to Vote Against Hiscox Rights Issue

September 25, 2002

Chubb Corp. issued a statement that its investment services subsidiary would vote its 54,529,566 ordinary shares in Hiscox plc against the shareholder resolutions seeking approval for the issuance of 96.4 million new shares in an effort to raise around £110.5 million ($171 million) in additional capital.

Chubb holds approximately 28.3% of Hiscox’ existing share capital, and is thus in a strong position to try and block the necessary resolutions. The U.S. giant was in talks with Hiscox in early 2001 about a possible takeover, but the discussions were abandoned.

The resolutions are scheduled to be voted on at an extraordinary general shareholders meeting scheduled for September 26.

Hiscox quickly issued a bulletin – reported by Dow Jones Newswires – which stated that “The company was informed by its Registrars that, as at 11 am on 24 September 2002, being the latest time and date by which valid proxy forms had to be returned to the Company’s Registrars, the following votes had been received:
Resolution 1 (to increase the authorized share capital in the company): For – 97,360,361, against – 54,533,448, discretionary – 12,997.
Resolution 2 (authorizing the board to allot the rights issue shares): For – 97,335,541, against – 54,533,968, discretionary – 37,297. ”

It went on to note that “The resolutions require a simple majority of those who vote. The votes in favor amount to over 50% of the shares in issue and over 64% of those who have voted. ” Both Chubb’s statement and Hiscox’ noted that “Chubb Investment Services Limited has not made any advance commitment in respect of its entitlement to take up shares under the Rights Issue.”

While no clear indication has been made as to whether or not Chubb has already voted its shares by proxy, the timing of the announcement seems to indicate that it hasn’t, and is therefore in a position to block the resolutions when a vote is taken at the Sept. 26 meeting.

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