RenaissanceRe to Purchase Platinum Underwriters in $1.9B Deal
RenaissanceRe Holdings Ltd., a provider of reinsurance, insurance and other related business services, and Platinum Underwriters Holdings Ltd., Bermudian provider of property, casualty and finite risk, reinsurance coverages, through reinsurance intermediaries, announced that the companies have entered into a definitive merger agreement under worth at 1.9 billion which RenaissanceRe will acquire Platinum.
The
deal values Platinum at $76 a share, 24 percent more than its closing
price on Nov. 21, RenaissanceRe said in a statement today. The buyer
will pay 7.5 million of its shares and about $1.16 billion in cash,
according to the statement.
RenaissanceRe
Chief Executive Officer Kevin O’Donnell will expand in sales of
reinsurance for casualty and specialty lines of coverage. That will
diversify a company that mostly sells property-catastrophe reinsurance
against events such as hurricanes.
“This
is a big strategic surprise for a company like RenRe, but confirms the
structural pressures in its core property-cat business,” Josh Stirling,
an analyst at Sanford C. Bernstein & Co. said today in a research
note. “RenRe will no longer be a focused pure play on the property-cat
business.”
RenaissanceRe
slipped 2.7 percent to $98.76 at 4:15 p.m. in New York, erasing most of
its gain for the year. Platinum rallied 21 percent to $74.19.
Source: Businessweek
