Brookfield deal ‘best path’ for Argo, says CEO
The CEO of Bermuda-based reinsurer Argo has described its acquisition by Brookfield Reinsurance, in an all-cash transaction that values the business at some $1.1 billion, as the best path forward for the company following a strategic review.
As part of the agreement, each issued and outstanding Argo common share will be converted into the right to receive $30.00 in cash at closing of the merger, funded by existing cash on hand and liquidity available to Brookfield Reinsurance.
The merger consideration per Argo common share represents a 6.7% premium to Argo’s closing share price on February 7, 2023, and a 48.7% premium over Argo’s closing share price on September 7, 2022, the last full trading day prior to Argo announcing the sale of Argo Underwriting Agency and its Lloyd’s Syndicate 1200 and the continuation of its strategic alternatives review process.
Each of Brookfield Reinsurance’s and Argo’s boards of directors unanimously approved the merger agreement. The merger is expected to close in the second half of 2023, subject to approval by Argo shareholders and other closing conditions customary for a transaction of this type.
In connection with the execution of the merger agreement, Voce Capital Management entered into a voting and support agreement whereby Voce Capital Management agreed to vote all of the common shares held by it in favour of the merger and take certain other actions, subject to the terms and conditions of the voting and support agreement.
Under the terms of the merger agreement, Argo has agreed to suspend the payment of dividends on its common shares through the closing of the transaction.
Sachin Shah, CEO of Brookfield Reinsurance, said, “The acquisition of Argo represents another milestone in the continued expansion of our insurance solutions business. Argo’s leading US specialty platform adds a foundational piece to our expanding US P&C operations. We look forward to partnering with the Argo team to support the growth of its core businesses, build on its strong franchise, and deliver value for policyholders.”
Thomas Bradley, Argo’s executive chairman and CEO, said: “This transaction brings a successful conclusion to Argo’s strategic alternatives review process and represents the best path forward for Argo, our employees and policyholders while also maximizing value for our shareholders. By joining Brookfield Reinsurance, Argo will continue to serve our brokers with greater financial strength and opportunities to grow as a US-focused specialty insurer.”
