The combined company will be renamed and re-branded as Alterra Capital Holdings (Alterra) and after the consummation of the merger will trade on the NASDAQ global select market under the symbol ALTE.
Under the terms of the definitive amalgamation agreement, holders of Harbor Point common stock will each receive a fixed exchange ratio of 3.7769 Max common shares for each Harbor Point share.
In addition, both Max and Harbor Point intend for the board of directors of the combined company to declare a special cash dividend of $2.50 per share following closing to all shareholders of the combined company (approximately $300m in total).
Following the merger, Harbor Point shareholders will own approximately 52 percent of the combined company on a fully diluted basis, with Max shareholders owning approximately 48 percent.
Completion of the transaction is contingent upon customary closing conditions, including the approvals of shareholders and regulatory approvals and notices, and is expected to close in the second quarter of 2010.
Following the close of the transaction, Marston Becker, chairman and CEO of Max will be president and CEO of Alterra and serve as a director, while John Berger, director, CEO and president of Harbor Point will be CEO of reinsurance of Alterra and vice chairman of the board of directors. Mr Berger will also chair the board’s underwriting committee.
According to Max, the board of directors of Alterra will consist of fourteen directors, including Messrs. Mr Becker and Mr Berger, in addition to six directors appointed by each of Max and Harbor Point. Michael O’Reilly, chairman of Harbor Point’s board of directors and former vice chairman and CFO of The Chubb Corporation, will be the non-executive chairman of Alterra’s board of directors.
Marston Becker, chairman and CEO of Max, said: “Alterra will benefit from an exceptionally strong combination of global underwriting platforms with limited operating overlap, and outstanding management and underwriting teams. There are very few companies of Max’s size that have the diversification and global reach it enjoys.
“The combination of our companies will produce a highly diverse portfolio of specialty insurance and reinsurance business, including a mix of long and short-tail lines. As a result, we expect that Alterra will have less volatile underwriting results than either of its individual components, as well as more flexibility to efficiently manage capital.”
Will the companies benefit with the agreement?
Have your say and discuss with your peers on the InfoGrok community.
Participate by posting your comments now.
User Comments