Watford Holdings’ board of directors has indicated an offer from Enstar to buy the company could constitute a “superior proposal” to the one that has been accepted from Arch Capital Group.
The board indicated that Enstar’s unsolicited, non-binding proposal to buy Watford’s common shares for $34.50 per share, subject to confirmatory diligence, could reasonably be expected to lead to a superior proposal, as defined in its merger agreement with Arch. It warned that failing to take action would be inconsistent with the directors’ exercise of their fiduciary duties under applicable law.
The board stopped short of saying Enstar’s proposal does constitute a superior proposal. It has not changed its recommendation in support of the merger with Arch.
Under the merger agreement with Arch, Watford is free to enter discussions with Enstar as long as Enstar enters into an acceptable confidentiality agreement, as defined in the merger agreement with Arch. That would see Watford provide information to and conduct discussions and negotiations with Enstar in relation to a possible sale.
Watford stressed discussions with Enstar would not necessarily result in the board determining that the Enstar proposal is a superior proposal.
Watford announced on October 9, 2020, that it had entered into a definitive merger agreement with Arch and Greysbridge, a wholly owned subsidiary of Arch.
Watford Holdings, Enstar, Arch Capital