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Tower Group Announces Stock Conversion Number For Pending Merger With Canopius Holdings Bermuda Limited

Stocks in this article: TWGP

Tower Group, Inc. ( NASDAQ:TWGP ) has been informed by Canopius Group Limited (“CGL”) that in conjunction with the pending merger between Canopius Holdings Bermuda Limited (“Canopius Bermuda”) and Tower, CGL has priced on March 6, 2013 its private sale of 100% of the shares of Canopius Bermuda to third party investors for an aggregate consideration of $216,697,637. As a result, subject to the approval of the merger by Tower stockholders at Tower’s special meeting of stockholders on March 12, 2013, Tower expects the merger to close on or about March 13, 2013.

Upon the closing of the merger Tower stockholders will receive 1.1330 shares of Canopius Bermuda for each outstanding share of Tower common stock held (referred to in Tower’s proxy statement relating to the merger as the “stock conversion number”).

Concurrent with the closing of the proposed merger, Canopius Bermuda will change its name to Tower Group International, Ltd. (“Tower Ltd.”), and its shares are expected to be listed on NASDAQ under the symbol “TWGP,” which is the same trading symbol as Tower. The opening price of shares of Tower Ltd. will be adjusted to account for the larger number of shares issued to existing Tower stockholders as a result of the conversion ratio.

The table below presents various financial highlights as of December 31, 2012 for Tower Group, Inc. and pro forma to include Canopius Bermuda as of the closing date of the pending merger.

Tower Group, Inc.    
Unaudited Selected Financial Information
Pro Forma and December 31, 2012
(000's except per share amounts)
     
December 31, 2012
As Reported       Pro Forma (1)(2)       Pro Forma (1)(3)
 
Tower Group, Inc. Stockholders' Equity $

980,836

$

1,186,678

$

1,186,678

 

Tangible Tower Group, Inc. Stockholders' Equity* $

639,464

$

814,999

$

814,999

 
Shares Outstanding

38,406

50,785

57,540

 
Tower Book Value per Share $

25.54

$

23.37

$

20.63

 
Tower Tangible Book Value per Share* $

16.65

$

16.05

$

14.16

 
Annual Dividends per Share

$

0.75

$

0.75

$

0.66

 
Tower 2013 Operating EPS Forecast

$2.55-$2.75

$2.75-$2.95

$2.43-$2.60

 
Tower 2014 Operating EPS Forecast

$3.05-$3.25

$3.65-$3.85

$3.22-$3.40

 

(1) Includes Tower Group, Inc. at Dec. 31, 2012 and Canopius Holdings Bermuda Limited estimated as ofclosing date of merger

(2) Pro Forma Dec. 31, 2012 with Canopius Holdings Bermuda Limited shares divided by stock conversion factor

(3) Pro Forma Dec. 31, 2012 with Tower Group, Inc. shares multiplied by stock conversion factor* Pro forma includes estimate of $30.3 million for closing adjustments

 

Canopius Holdings Bermuda Limited (CHBL) Pricing Information

(000's except number of shares sold, per share amounts and stock conversion number)
CHBL Tangible Net Asset Value

$

197,970

Value of the Retained Business of CHBL

7,893

Aggregate amount of Placement Fees

10,835

Investment discount for third partyinvestors acquiring CHBL shares

 

16,469

Total

$

233,167

 

Aggregate number of CHBL shares sold

14,025,737

 

Adjusted CHBL Price per share

$

16.62

 

Tower Closing Share Price on NASDAQ on 3/6/13

$

18.83

 

Stock Conversion Number

1.1330

 




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