This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration. Need a new registration confirmation email? Click here
Tower Group, Inc. (Tower)(Nasdaq: TWGP) announced today that it has committed to invest $75 million (based on the current exchange rate) in Canopius Group, Ltd. (Canopius), a privately owned Lloyd’s insurance holding company domiciled in Guernsey, Channel Islands. Canopius’s principal business is insurance and reinsurance underwriting through Lloyd’s syndicates managed by Canopius Managing Agents Limited (CMA) and reinsurance through Canopius Bermuda Limited (CBL). The investment is subject to completion of the acquisition by Canopius of Omega Insurance Holdings Limited (Omega), an international insurance and reinsurance group listed on the London Stock Exchange and domiciled in Bermuda. Canopius publicly announced an offer to acquire Omega earlier today.
Under the terms of the agreements executed by Tower and Canopius, should Canopius close its proposed acquisition of Omega, Tower would acquire 10.7% of the ordinary share capital of Canopius (the Investment) and have the right to appoint one member of the Canopius board of directors. Canopius has also committed to assist Tower, at Tower’s option, with the establishment of a presence at Lloyd’s (the Lloyd’s Transaction), subject to the required approval of Lloyd’s and the Financial Services Authority. Finally, Tower would acquire an option (the Option), exercisable in its sole discretion, to combine with the Bermuda reinsurance business currently operated by Canopius, which combination, if effected, is expected to enhance the profitability of Tower’s Bermuda reinsurance operations.
The Investment is subject to the completion of the acquisition of Omega by Canopius, which acquisition itself is subject to various conditions including the receipt of required regulatory approvals and the absence of any legal impediment to the Investment. The Lloyd’s Transaction and the exercise of the Option are subject to the execution of definitive documentation, to the approval of Tower’s Board of Directors, to the completion of the acquisition of Omega by Canopius and to any other applicable approvals including, with respect to the Lloyd’s Transaction, the approval of Lloyd’s and the FSA. Should Canopius’s acquisition of Omega not be completed, Tower would not be required to effect the Investment, but would remain a reinsurer of Canopius under its existing reinsurance arrangements.