Transaction Provides Certainty and Speed of
Execution for Watford Shareholders
Ensures Continuity of Product and Service for
Watford Policyholders
Arch Capital Group Ltd. (NASDAQ: ACGL) (“Arch” or “the Company”)
and Watford Holdings Ltd. (NASDAQ: WTRE) (“Watford”) today
announced they have entered into a definitive agreement under which
Arch will acquire all the common shares of Watford in an all-cash
transaction valued at approximately $622 million. Following
closing, which is expected to occur in the first quarter of 2021,
Watford will continue to operate as a standalone business and
remain consolidated within Arch’s financials.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20201009005297/en/
Under the terms of the agreement, Watford shareholders will
receive $31.10 in cash for each Watford common share they hold.
This consideration represents a premium of approximately 74% to
Watford’s unaffected closing common share price on September 8,
2020, the last trading day prior to media reports about the
possibility of a transaction between Watford and Arch. Watford's
8.5% cumulative redeemable preference shares (NASDAQ: WTREP) will
remain outstanding and will be entitled to the same dividend and
other rights and preferences as are now provided to the preference
shares.
The independent members of Watford’s Board of Directors have
unanimously approved the agreement and recommended that Watford’s
shareholders vote in favor of the transaction. The agreement
requires approval by holders of the majority of Watford’s
outstanding shares. Arch, which currently owns approximately 13% of
Watford’s outstanding shares, has committed to vote in favor of the
transaction. In addition, Arch’s directors and executive officers
own approximately 2% of Watford’s outstanding shares.
“This represents a clear path forward for Watford, while also
delivering an attractive premium to shareholders in a transaction
with a high degree of certainty to close,” said Jon Levy, Watford’s
President and Chief Executive Officer. “We believe that Watford
will be better positioned as a standalone business within Arch to
execute its strategic priorities and growth plans. Importantly, we
expect a seamless transition for our clients, trading partners and
policyholders, who we think will benefit from Watford becoming part
of a larger organization with greater resources.”
“Since we launched Watford in 2014, the company has been a
valued part of the Arch story and we are pleased to deepen our
existing strategic and financial investment,” said Marc Grandisson,
Arch’s President and Chief Executive Officer. “Our longstanding
contractual partnership with and financial consolidation of Watford
expedited the due diligence process and should give all
stakeholders confidence in our ability to close this transaction
quickly. Watford’s policyholders and trading partners will benefit
from the continued underwriting strength and service they have come
to expect from Watford and Arch.”
The transaction, which will be funded through cash from Arch’s
balance sheet, is subject to customary closing conditions,
including regulatory and shareholder approval. Arch also retains
the flexibility to bring in additional investment partners as
co-investors in the transaction.
Advisors
Goldman Sachs is acting as financial advisor to Arch, and Cahill
Gordon & Reindel LLP is serving as the Company’s legal advisor.
Morgan Stanley is acting as financial advisor to Watford, and
Clifford Chance US LLP is serving as Watford’s legal advisor.
About Arch Capital Group Ltd.
Arch Capital Group Ltd., a Bermuda-based company with
approximately $14.7 billion in capital at June 30, 2020, provides
insurance, reinsurance and mortgage insurance on a worldwide basis
through its wholly owned subsidiaries.
About Watford Holdings Ltd.
Watford Holdings Ltd. is a global property and casualty
insurance and reinsurance company with approximately $1.0 billion
in capital as of June 30, 2020, comprised of $172.6 million of
senior notes, $52.4 million of contingently redeemable preference
shares and $776.2 million of common shareholders’ equity, and with
operations in Bermuda, the United States and Europe. Its operating
subsidiaries have been assigned financial strength ratings of “A-”
(Excellent) from A.M. Best and “A” from Kroll Bond Rating Agency.
On May 1, 2020, A.M. Best announced that it had placed under review
with negative implications the financial strength ratings of
Watford's operating subsidiaries. On May 7, 2020, Kroll Bond Rating
Agency affirmed the “A” insurance financial strength ratings of
Watford's operating subsidiaries as well as the “BBB+” credit
rating of Watford Holdings Ltd., with the outlook for all ratings
revised to negative.
Cautionary Note Regarding Forward-looking Statements
The Private Securities Litigation Reform Act of 1995 provides a
"safe harbor" for forward−looking statements. This release or any
other written or oral statements made by or on behalf of Arch
Capital Group Ltd. and its subsidiaries or Watford and its
subsidiaries may include forward−looking statements, which reflect
Arch's or Watford's current views with respect to future events and
financial performance. All statements other than statements of
historical fact included in or incorporated by reference in this
release are forward−looking statements, including statements
regarding the expected timing of the closing of the merger; the
ability of the parties to complete the merger considering the
various closing conditions; the expected benefits of the merger;
and any assumptions underlying any of the foregoing.
Forward−looking statements can generally be identified by the
use of forward−looking terminology such as "may," "will," "expect,"
"intend," "estimate," "anticipate," "believe" or "continue" or
their negative or variations or similar terminology.
Forward−looking statements involve Arch’s or Watford’s current
assessment of risks and uncertainties. Actual events and results
may differ materially from those expressed or implied in these
statements. A non-exclusive list of the important factors that
could cause actual results to differ materially from those in such
forward-looking statements includes the following: one or more
closing conditions to the merger, including certain regulatory
approvals, may not be satisfied or waived, on a timely basis or
otherwise, including that a governmental entity may prohibit, delay
or refuse to grant approval for the consummation of the merger, or
that the required approval of the merger agreement by the
shareholders of Watford may not be obtained; the business of
Watford may suffer as a result of uncertainty surrounding the
merger and there may be challenges with employee retention as a
result of the pending merger; the merger may involve unexpected
costs, liabilities or delays; legal proceedings may be initiated
related to the merger; an event, change or other circumstance may
occur that could give rise to the termination of the merger
agreement (including circumstances requiring a party to pay the
other party a termination fee pursuant to the merger
agreement);adverse general economic and market conditions;
increased competition; pricing and policy term trends; fluctuations
in the actions of rating agencies and the Company’s or Watford’s
ability to maintain and improve its ratings; investment
performance; the loss of key personnel; the adequacy of the
Company’s or Watford’s loss reserves, severity and/or frequency of
losses, greater than expected loss ratios and adverse development
on claim and/or claim expense liabilities; greater frequency or
severity of unpredictable natural and man-made catastrophic
events, including pandemics such as COVID-19; the impact of
acts of terrorism and acts of war; changes in regulations and/or
tax laws in the United States or elsewhere; the Company’s or
Watford’s ability to successfully integrate, establish and maintain
operating procedures as well as integrate the businesses the
Company or Watford has acquired or may acquire into its existing
operations (including in connection with the merger);; changes in
accounting principles or policies; material differences between
actual and expected assessments for guaranty funds and mandatory
pooling arrangements; availability and cost to the Company or
Watford of reinsurance to manage the Company’s or Watford’s gross
and net exposures; the failure of others to meet their obligations
to the Company or Watford; changes in the method for determining
the London Inter-bank Offered Rate (“LIBOR”) and the potential
replacement of LIBOR and other factors identified in the Company’s
and Watford’s filings with the U.S. Securities and Exchange
Commission (“SEC”).
The foregoing review of important factors should not be
construed as exhaustive and should be read in conjunction with
other cautionary statements that are included herein or elsewhere.
All subsequent written and oral forward−looking statements
attributable to us or persons acting on our behalf are expressly
qualified in their entirety by these cautionary statements. Neither
the Company nor Watford undertakes any obligation to publicly
update or revise any forward−looking statement, whether as a result
of new information, future events or otherwise.
Additional Information and Where to Find It
In connection with the proposed merger, Watford intends to file
relevant materials with the SEC, including a preliminary proxy
statement on Schedule 14A, and Watford and certain other persons,
including Arch, intend to file a Schedule 13E-3 transaction
statement with the SEC. Following the filing of the definitive
proxy statement with the SEC, Watford will mail the definitive
proxy statement and a proxy card to each shareholder entitled to
vote at the special meeting relating to the proposed merger.
INVESTORS ARE URGED TO READ THE PROXY STATEMENT AND THE SCHEDULE
13E-3 WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION. Investors may obtain the proxy statement, as
well as other filings containing information about Watford, free of
charge, from the SEC’s web site (www.sec.gov). Investors may also
obtain Watford’s SEC filings in connection with the transaction,
free of charge, by directing a request to Watford Holdings Ltd.,
Waterloo House, 1st Floor, 100 Pitts Bay Road, Pembroke HM 08,
Bermuda.
Participants in the Solicitation
Watford and its directors, executive officers and employees and
certain other persons may be deemed to be participants in the
solicitation of proxies in respect of the transaction. Information
regarding Watford’s directors and executive officers is available
in its definitive proxy statement for its 2020 annual meeting of
shareholders filed with the SEC on April 14, 2020. This document
can be obtained free of charge from the sources indicated above.
Other information regarding the interests of the participants in
the proxy solicitation will be included in the proxy statement
relating to the transaction when it becomes available. This
document does not constitute a solicitation of a proxy, an offer to
purchase or a solicitation of an offer to sell any securities.
arch-corporate
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201009005297/en/
Arch Capital Group Ltd. Greg Hare 678 462 8647
ghare@archcapservices.com Watford Holdings Ltd. Laurence B.
Richardson LBR@WatfordHoldings.com
Arch Capital (NASDAQ:ACGL)
Graphique Historique de l'Action
De Juin 2024 à Juil 2024
Arch Capital (NASDAQ:ACGL)
Graphique Historique de l'Action
De Juil 2023 à Juil 2024