Endurance Specialty Holdings to Acquire Montpelier Re Holdings
(Thomson Reuters ONE) -
Increases Endurance's Scale and Market Presence
Broadens Capabilities Through Addition of Lloyd's Franchise
Adds Established Third Party Capital Management Franchise
Accretive to Endurance Earnings Per Share and Return on Equity
PEMBROKE, Bermuda, March 31, 2015 - Endurance Specialty Holdings Ltd. (NYSE:
ENH) ("Endurance" or the "Company") and Montpelier Re Holdings Ltd. (NYSE: MRH)
("Montpelier") today announced that they have entered into a definitive merger
agreement pursuant to which Endurance will acquire Montpelier for consideration
of 0.472 shares of Endurance and $9.89 in cash for each Montpelier common share,
which represents $40.24 per Montpelier common share, or $1.83 billion in
aggregate, based on Endurance's closing price on March 30, 2015.
John R. Charman, Endurance's Chairman and Chief Executive Officer, said,
"Endurance's strategic acquisition of Montpelier represents a compelling value
creation opportunity for Endurance's shareholders, with accretion to earnings
per share and return on equity. As a result of the transaction, we expect to
achieve meaningful transaction synergies through cost savings and greater
capital efficiencies. Importantly, the acquisition materially increases our
breadth of distribution with the addition of a good-sized and scalable Lloyd's
platform and an attractive property catastrophe business that complements our
existing reinsurance portfolio. The acquisition also provides Endurance with a
natural introduction to the business of managing insurance and reinsurance
investment products for third-party capital investors. Montpelier's historic
high quality portfolio reflects a disciplined approach to underwriting that is
consistent with Endurance's strong risk management and underwriting culture."
Under the terms of the agreement, the aggregate consideration for the
transaction will consist of $450 million in cash and approximately 21.5 million
Endurance ordinary shares, which are valued at approximately $1.4 billion based
on Endurance's closing price on March 30, 2015. The cash portion of the
consideration will be funded through a pre-closing dividend paid by Montpelier
to its common shareholders. Following completion of the transaction,
Montpelier's existing shareholders will own approximately 32% of Endurance's
outstanding ordinary shares.
The acquisition price of $40.24 per Montpelier common share, based on
Endurance's closing price on March 30, 2015, represents a 19% premium to
Montpelier's unaffected closing price per common share as of the close of
business on December 10, 2014. The acquisition price also represents a multiple
of 1.21x Montpelier's fully converted book value per common share as of December
31, 2014.
Christopher Harris, Montpelier's President and Chief Executive Officer, said,
"This transaction with Endurance provides significant value for Montpelier
shareholders through up-front cash and an equity interest in a combined
Endurance with enhanced scale, greater market presence and substantial product
and geographic diversity. The combination of our balance sheets, our diverse
underwriting platforms and high-quality books of business is a compelling
opportunity for our shareholders, customers and distribution partners."
For the twelve months ended December 31, 2014, the two companies had pro forma
gross premiums written of $3.6 billion. Endurance common shareholders' equity
will increase from $2.8 billion to $4.1 billion, total capital will increase
from $3.7 billion to $5.5 billion, and total cash and invested assets will
increase from $6.7 billion to $9.3 billion on a pro-forma basis. Endurance
expects to achieve more than $60 million of annual run-rate cost savings and to
realize meaningful capital efficiencies from the acquisition. The transaction
is expected to be immediately accretive to earnings per share and return on
equity, excluding non-recurring integration and transaction costs.
Endurance's Board of Directors will be expanded at closing to include three of
Montpelier's current directors. Endurance's senior management team will lead
the combined company from its Bermuda headquarters.
The agreement has been unanimously approved by both companies' Boards of
Directors. The transaction is expected to be completed in the third quarter of
2015 and is subject to the approval of both companies' shareholders, regulatory
approvals and the satisfaction of customary closing conditions. Funds
affiliated with Charlesbank Capital Partners have agreed to vote their
Montpelier common share stake in favor of the proposed transaction.
Endurance's financial advisors in connection with the transaction are Morgan
Stanley & Co. LLC and Jefferies LLC, and its legal counsel is Skadden, Arps,
Slate, Meagher & Flom LLP. Montpelier's financial advisor in connection with
the transaction is Credit Suisse Securities (USA) LLC, and its legal counsel is
Cravath, Swaine & Moore LLP.
Investment Community Conference Call
Endurance will host a conference call beginning at 8:30 a.m. Eastern Time on
March 31, 2015 to discuss the transaction with interested investors and
shareholders. The conference call may be accessed by calling 888-256-9154
(international +1-913-312-0855) and entering passcode 9082882. Those who intend
to participate in the conference call should register at least ten minutes in
advance to ensure access to the call. A telephone replay of the conference call
will be available through April 14, 2015 by dialing 888-203-1112 or
+1-719-457-0820 (international) and entering the pass code: 9082882. The slides
for the presentation, as well as a webcast, can be accessed at the Investor
Relations section of the Endurance website, www.endurance.bm. An online replay
of the webcast will be available shortly following the conclusion of the live
broadcast.
About Endurance Specialty Holdings Ltd.
Endurance is a global specialty provider of property and casualty insurance and
reinsurance. Through its operating subsidiaries, Endurance writes agriculture,
casualty and other specialty, professional lines and property, marine and energy
lines of insurance and catastrophe, property, casualty, professional lines and
specialty lines of reinsurance. We maintain excellent financial strength as
evidenced by the ratings of A (Excellent) from A.M. Best (XV size category) and
A (Strong) from Standard and Poor's on our principal operating subsidiaries.
Endurance's headquarters are located at Waterloo House, 100 Pitts Bay Road,
Pembroke HM 08, Bermuda and its mailing address is Endurance Specialty Holdings
Ltd., Suite No. 784, No. 48 Par-la-Ville Road, Hamilton HM 11, Bermuda. For
more information about Endurance, please visit http://www.endurance.bm/.
About Montpelier Re Holdings Ltd.
Montpelier, through its operating subsidiaries, is a premier provider of global
property and casualty reinsurance and insurance products. Additional information
can be found in Montpelier's public filings with the Securities and Exchange
Commission.
Cautionary Note Regarding Forward-Looking Statements
Some of the statements in this press release may include, and Endurance may make
related oral, forward-looking statements which reflect our current views with
respect to future events and financial performance. Such statements may include
forward-looking statements both with respect to us in general and the insurance
and reinsurance sectors specifically, both as to underwriting and investment
matters. These statements may also include assumptions about our proposed
acquisition of Montpelier (including its benefits, results, effects and timing).
Statements which include the words "should," "would," "expect," "intend,"
"plan," "believe," "project," "anticipate," "seek," "will," and similar
statements of a future or forward-looking nature identify forward-looking
statements in this press release for purposes of the U.S. federal securities
laws or otherwise. We intend these forward-looking statements to be covered by
the safe harbor provisions for forward-looking statements in the Private
Securities Litigation Reform Act of 1995.
All forward-looking statements address matters that involve risks and
uncertainties. Accordingly, there are or may be important factors that could
cause actual results to differ materially from those indicated in the forward-
looking statements. These factors include, but are not limited to, the effects
of competitors' pricing policies, greater frequency or severity of claims and
loss activity, changes in market conditions in the agriculture insurance
industry, termination of or changes in the terms of the U.S. multiple peril crop
insurance program, a decreased demand for property and casualty insurance or
reinsurance, changes in the availability, cost or quality of reinsurance or
retrocessional coverage, our inability to renew business previously underwritten
or acquired, our inability to maintain our applicable financial strength
ratings, our inability to effectively integrate acquired operations,
uncertainties in our reserving process, changes to our tax status, changes in
insurance regulations, reduced acceptance of our existing or new products and
services, a loss of business from and credit risk related to our broker
counterparties, assessments for high risk or otherwise uninsured individuals,
possible terrorism or the outbreak of war, a loss of key personnel, political
conditions, changes in accounting policies, our investment performance, the
valuation of our invested assets, a breach of our investment guidelines, the
unavailability of capital in the future, developments in the world's financial
and capital markets and our access to such markets, government intervention in
the insurance and reinsurance industry, illiquidity in the credit markets,
changes in general economic conditions and other factors described in our Annual
Report on Form 10-K for the year ended December 31, 2014.
Additionally, the proposed transaction is subject to risks and uncertainties,
including: (A) that Endurance and Montpelier may be unable to complete the
proposed transaction because, among other reasons, conditions to the closing of
the proposed transaction may not be satisfied or waived; (B) uncertainty as to
the timing of completion of the proposed transaction; (C) uncertainty as to the
actual premium of the Endurance share component of the proposal that will be
realized by Montpelier shareholders in connection with the transaction; (D)
uncertainty as to the long-term value of Endurance ordinary shares; (E) failure
to realize the anticipated benefits and synergies from the proposed transaction,
including as a result of failure or delay in integrating Montpelier's businesses
into Endurance; (F) the risk that regulatory or other approvals required for the
transaction are not obtained or are obtained subject to conditions that are not
anticipated; (G) the inability to retain key personnel; (H) any changes in
general economic and/or industry specific conditions; and (I) the outcome of any
legal proceedings to the extent initiated against Endurance, Montpelier and
others following the announcement of the proposed transaction, as well as
Endurance and Montpelier management's response to any of the aforementioned
factors.
The foregoing review of important factors should not be construed as exhaustive
and should be read in conjunction with the other cautionary statements that are
included herein and elsewhere, including the risk factors included in
Endurance's most recent report on Form 10-K and the risk factors included in
Montpelier's most recent report on Form 10-K and other documents of Endurance
and Montpelier on file with the Securities and Exchange Commission ("SEC"). Any
forward-looking statements made in this press release are qualified by these
cautionary statements, and there can be no assurance that the actual results or
developments anticipated by Endurance will be realized or, even if substantially
realized, that they will have the expected consequences to, or effects on,
Endurance or its business or operations. Except as required by law, the parties
undertake no obligation to update publicly or revise any forward-looking
statement, whether as a result of new information, future developments or
otherwise.
Additional Information about the Proposed Transaction and Where to Find It
The issuance of Endurance ordinary shares to Montpelier shareholders in the
merger will be submitted to shareholders of Endurance for their consideration.
The proposed merger will be submitted to shareholders of Montpelier for their
consideration. This press release is not a solicitation of any vote or approval
and is not a substitute for the joint proxy statement/prospectus or any other
documents which Endurance or Montpelier may send to their respective
shareholders in connection with the proposed merger.
This press release does not constitute an offer to sell or the solicitation of
an offer to sell or the solicitation of an offer to buy any securities, nor
shall there be any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of such jurisdiction. No offering of securities shall
be made except by means of a proxy statement/prospectus meeting the requirements
of the Securities Act of 1933, as amended.
Endurance and Montpelier shareholders are urged to read the joint proxy
statement/prospectus for the proposed MERGER when it is filed, and any amendment
or supplement thereto that may be filed, with the SEC because they will contain
important information. All such documents, when filed, are available free of
charge at the SEC's website (www.sec.gov) or by directing a request to Endurance
at the Investor Relations contact below.
Participants in the Solicitation
Endurance and Montpelier and their directors and executive officers are deemed
to be participants in any solicitation of Endurance and Montpelier shareholders
in connection with the proposed merger. Information about Endurance's directors
and executive officers is available in Endurance's Definitive Proxy Statement,
dated April 9, 2014, for its 2014 Annual General Meeting of shareholders and
Form 8-K, dated November 26, 2014. Information about Montpelier's directors and
executive officers is available in Montpelier's Definitive Proxy Statement,
dated March 26, 2014, for its 2014 Annual General Meeting of shareholders and
Form 8-K, dated May 15, 2014.
All references in this press release to "$" refer to United States dollars.
The contents of any website referenced in this press release are not
incorporated by reference herein.
Contacts:
For Endurance Specialty Holdings Ltd.
Investor Relations
Phone: +1 441 278 0988
Email: investorrelations(at)endurance.bm
Media Relations
Mark Semer and Thomas Davies
Kekst and Company
Phone: 212 521 4802/4873
Email: mark-semer(at)kekst.com and tom-davies(at)kekst.com
For Montpelier Re Holdings Ltd.
Ruth Pachman and James David
Kekst and Company
Phone: 212 521 4891/4825
Email: ruth-pachman(at)kekst.com and james-david(at)kekst.com
# # #
This announcement is distributed by GlobeNewswire on behalf of
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(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Endurance Specialty Holdings Ltd via GlobeNewswire
[HUG#1907730]
Unternehmensinformation / Kurzprofil:
Datum: 31.03.2015 - 13:00 Uhr
Sprache: Deutsch
News-ID 382458
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contact information:
Town:
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Kategorie:
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