By Lisa Kerner
Charlotte, N.C., June 11 - James River Group, Inc. agreed to be acquired by a Bermuda-based holding company led by the D.E. Shaw group for $34.50 per share, or approximately $575 million.
"We are pleased to have entered into a transaction that will offer liquidity to all of our stockholders at a price which is over 90% above the price at which our common stock was first offered to the public a little less than two years ago," Dick Wright, chairman of the board of James River, said in a company news release.
James River said it will pay regular quarterly cash dividends until the transaction closes.
The transaction is expected to be completed in the second half of 2007, subject to shareholder approval. James River's board unanimously approved the merger agreement. Equity commitments for the full amount of the merger consideration have been received from affiliates of the D. E. Shaw group.
James River has a 55-day go-shop period and will solicit superior proposals from third parties until Aug. 5. A $7.2 million termination fee is included in the agreement.
"We are pleased with the prospect of having such a well capitalized and committed partner as we go forward. The D.E. Shaw group understands and has embraced our business model and shares our company's approach to the business.
"After the transaction closes, we anticipate that a new Bermuda-based reinsurance company will be added to our group," James River president and chief executive officer J. Adam Abram added.
"The inclusion of this entity, and the additional capital associated with it, will add to our group's capabilities as well as our financial strength."
J.P. Morgan Securities Inc. advised the board and provided a fairness opinion.
James River is an insurance holding company based in Chapel Hill, N.C.
| Acquirer: | D.E. Shaw group
|
| Target: | James River Group, Inc.
|
| Transaction value: | $575 million
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| Price per share: | $34.50
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| Announcement date: | June 11
|
| Termination fee: | $7.2 million
|
| Expected closing: | Second half of 2007
|
| Stock price for target: | Nasdaq: JRVR: $35.18 on June 8
|
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