StateGuard’s plan for Life
An independent report by KPMG has endorsed the merger of StateGuard and Lifeplan friendly societies.
The report says StateGuard members will enjoy fixed management fees for three years, will enjoy a special $8.8 million bonus distribution and will retain their voting rights in the merged entity.
The special distribution is to given to members in the form of reduced fees to avoid any capital gains tax problems that would have occurred if the money was paid direct.
The amount each StateGuard member will receive varies on the sums invested and the length of membership with the society. On average, each member will receive a discount on their fees of about 0.8 per cent per annum during the next three years.
Lifeplan is paying $6 million from its management fund to StateGuard for the right to merge with the Victorian friendly society.
As part of the merger agreement, StateGuard members will be entitled to any distribution of Lifeplan's management fund if it is taken over within the next five years.
In its report on the merger, KPMG looked at the value of acquiring StateGuard's $400 million of funds under management. Lifeplan is paying 1.48 per cent acquisition valuation. This is compared to Colonial's acquisition of Legal & General which was 0.86 per cent acquisition valuation of funds under management. At the top end there was a valuation of 2.39 per cent for Norwich acquiring Portfolio Partners.
The Lifeplan members will vote on the merger on March 8 and StateGuard members on March 18. Both sets of directors have recommended acceptance of the merger.
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