Tower Group Announces $75M Strategic Investment in Canopius
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.
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