Enstar has moved to acquire Watford Re for a per share price of $31.00.
Enstar sent a letter to Watford Re’s board on September 30 proposing to acquire 100 percent of Watford’s ordinary share capital for $31.00 per ordinary share at closing. This represents a premium to current market price of 35.1 percent.
Enstar currently holds a 9.1 percent stake in Watford Holdings, which is based by Arch Capital, having increased its shareholding in the first quarter of 2020.
Watford's board of directors has hired Morgan Stanley to help evaluate strategic options for the company. Enstar said it would be "pleased to engage with Watford and its Board to help provide a solution".
The acquiring entity will be a wholly-owned direct or indirect subsidiary of Enstar Group. Enstar said it is "willing to dedicate the necessary resources, including an experienced set of M&A professionals, to complete our due diligence and the negotiation of definitive documentation expeditiously".
Earlier in May, Watford Re's shareholder Capital Returns Management had written to the reinsurer's chairman Walter Harris to conduct a "strategic review" and consider selling itself after generating "extremely disappointing results" for its shareholders.
Enstar, Watford Re, Arch Capital, Morgan Stanley