Third point re, the reinsurer launched by billionaire hedge investment supervisor daniel loeb, has agreed to combine with swedish opponent sirius in a $3.3bn offer that seeks to mitigate capital dangers amid a potential trend of claims as a result of the fallout associated with the coronavirus pandemic.
As part of the cash-and-stock deal, mr loeb, who is third point res biggest individual shareholder, features consented to get $50m worth of stocks when you look at the blended entity if the package closes.
This transaction fulfils our eyesight to move third aim re up the standard curve with the addition of diversified insurance coverage lines to our present company, mr loeb said. he included that price would help boost returns on capital and would assist produce vital mass to aid both internal development and future acquisitions.
The tie-up could be the first of numerous into the sector, as insurance professionals and dealmakers expect coronavirus to advance expedite dealmaking plans to offer non-core business units or purchase possessions to achieve scale.
The pandemic is intensifying the limelight for a passing fancy structural weaknesses in insurance coverage sector that have driven consolidation along with other m&a task in recent years, said david lambert, which heads eys worldwide insurance deals unit.
Third point re will use a combination of cash, equity and debt, if required, to finance the exchange. siddhartha sankaran, who has been recently named as non-executive president to third point res board, will lead the latest team, that will be renamed siriuspoint.
Mr sankaran was once the main monetary officer and main risk officer during the us insurance carrier aig. kip oberting, siriuss leader, will step down from his role.
Investors in sirius has a number of choices they are able to work out, such as the power to receive $9.50 per share or 0.743 of third aim re shares and a contingent worth right that 2 yrs will guarantee all of them equity and cash at least of $13.73 per share.
Asia minsheng investment group, that will be siriuss bulk shareholder, has plumped for a third choice. the shanghai-based financial investment team will receive $100m in money and more or less 58m third point re shares plus a portion of series a preference shares, warrants as well as other securities.
Within the arrangement, third point re investors may be protected from up to $100m of web progressive covid-19 related losses at sirius which can be sustained, using cases, for approximately three-years following the finishing of the package.