Canopius Merger With Tower Completed

Tower Group, Inc. today [Mar. 13] announced the closing of its merger with Canopius Holdings Bermuda Limited which will become effective this evening following the close of trading on The NASDAQ Global Select Market.

Upon closing of the merger, Tower will become an indirect wholly-owned subsidiary of Canopius Bermuda, which will change its name effective at the closing to Tower Group International, Ltd.

Under the terms of the merger agreement, Tower stockholders will receive 1.1330 common shares of Tower Ltd. for each outstanding share of Tower common stock held. Tower Ltd. common shares will be listed on NASDAQ under the symbol “TWGP,” which is the same trading symbol as is currently used by Tower, and are expected to begin trading at the market opening tomorrow.

The opening price of Tower Ltd. common shares will be reduced by 13.3 percent to account for the 13.3 percent increase in shares received by existing Tower stockholders as a result of the merger.

Michael H. Lee, President and Chief Executive Officer, said, “After working diligently on the merger with Canopius Bermuda for more than one year, we are very pleased with the successful completion of this transformative and strategically important transaction. We expect this merger to be immediately accretive and to eventually allow us to achieve our long-term ROE target of 13 to 15 percemt. From a strategic standpoint, we believe this merger will position Tower to build a profitable, diversified international specialty business that has the potential to create substantial long-term value for our stockholders.

“As a result of the merger, we will create an efficient Bermuda-domiciled holding company structure that will combine Tower’s businesses with certain of Canopius’s reinsurance business and give us access to US, Bermuda and Lloyd’s markets. Finally, we also want to thank everyone who worked on this transaction, including the bankers and attorneys as well the staff and Board members from Canopius Group Limited and Tower Group.”

Canopius owns two companies in Bermuda: Canopius Bermuda Limited and Canopius Underwriting Bermuda Limited. The Chief Executive Officer of both companies is Susan Patschak.

Canopius Bermuda Limited is a Class 3A reinsurance company with capital of approximately $340 million. It writes Structured Reinsurance treaty business sourced via Canopius Ireland. In addition, the company provides capital support to Canopius Group’s underwriting operations at Lloyd’s.

Canopius Underwriting Bermuda Limited is a wholly-owned Bermuda-based underwriting agency that operates as a Lloyd’s-approved coverholder for Syndicate 4444. It underwrites Excess Casualty and Property Catastrophe Treaty
business.

Last month Canopius Group Limited announced Ms Patschak would be stepping down from her CEO position with effect from 31 May 2013. This move is driven by her decision to assume a new role within the US insurance industry.

Stephen Hartwig, Senior Vice President, Canopius Underwriting Bermuda Limited has been named Ms Patschak’s successor, subject to the necessary regulatory consents

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Category: All, Business