Third Point Re reaches agreement with key Sirius investors ahead of potential merger
Third Point Reinsurance has entered into a definitive agreement with the holders of Sirius International Insurance Group’s series B preference shares that will see holders of that paper remain as investors following the closing of Third Point’s proposed merger with Sirius.
The agreement will see the four institutional investors holding Sirius's series B preference shares - Bain, Carlyle, Centerbridge Partners and GPC Partners Investments - convert their existing shares in Sirius into up to $260 million face value of newly-issued series B preference shares of SiriusPoint.
The new preference shares will be perpetual in nature and carry an 8.00 percent annual cumulative cash dividend. They will be callable by SiriusPoint on each fifth anniversary of the closing of the merger or upon certain other events.
At the time of issuance upon the closing of the merger, SiriusPoint will have the option to substitute up to $60 million in cash in lieu of an equal face amount of the new preferred stock, or pay in cash the agreed New Preference Shares face amount of $260 million in full.
The four institutional investors will toll certain potential claims they may have against Sirius from the date of the agreement until the closing of the merger, or the earlier termination of the agreement. Upon the closing of the merger, they will release such potential claims.
Sid Sankaran, currently chairman of Third Point who is slated to be chief executive officer of SiriusPoint, said the agreement marked an important milestone for SiriusPoint. “This agreement provides us with certainty regarding our capital position going forward, resolves amicably a potential litigation, and constitutes an important endorsement of SiriusPoint by sophisticated investors,” he said. “Having this impressive slate of investors in the combined company further reinforces our strong balance sheet as we support our clients and broker partners in the upcoming renewal season."