Fairfax Financial to Acquire American Safety Insurance Holdings, Ltd. for $29.25 Per Share in Cash
June 03 2013 - 8:00AM
Marketwired
Fairfax Financial Holdings Limited (TSX:FFH)(TSX:FFH.U) and
American Safety Insurance Holdings, Ltd. (NYSE:ASI) today announced
that Fairfax and American Safety have entered into a merger
agreement pursuant to which Fairfax will acquire all of the
outstanding shares of American Safety common stock. American Safety
stockholders will receive $29.25 per share in cash, representing an
aggregate transaction value of approximately $306 million. The
price represents a premium of 22.1% to the closing price of
American Safety common stock on May 31, 2013, the last trading day
prior to this announcement. The transaction is expected to close in
the fourth quarter of 2013.
The board of directors of American Safety, after unanimously
determining that the merger is in the best interest of American
Safety and its stockholders, unanimously approved the merger
agreement and resolved to recommend that American Safety's
stockholders vote to approve the merger. Certain of the directors
and executive officers of American Safety, who beneficially own
approximately 10% of the outstanding shares of American Safety
common stock, have agreed to vote their shares in favor of the
merger.
The transaction is subject to customary conditions, including
approval by American Safety's stockholders and regulatory
approvals. There is no financing condition to consummate the
transaction.
Concurrent with the execution of the merger agreement with
American Safety, Fairfax entered into a purchase and sale agreement
with Tower Group International, Ltd. pursuant to which Fairfax
agreed to sell the Bermuda subsidiary, American Safety Reinsurance,
Ltd. promptly upon acquiring it from American Safety. Such
transaction is subject to customary conditions including regulatory
approvals.
The acquisition is expected to be financed using internal
resources and is not expected to require Fairfax holding company
cash. Fairfax expects several of the American Safety specialty
lines groups to move to Crum & Forster and Hudson. The
acquisition is expected to provide the Fairfax group with $480
million of additional investable assets.
Prem Watsa, Chairman and Chief Executive Officer of Fairfax,
said: "We look forward to working with the talented professionals
in the American Safety team. We expect to enhance our insurance
operations in certain specialty lines of business with American
Safety's expertise."
Stephen R Crim, President and Chief Executive Officer of
American Safety said "We are excited to become part of the Fairfax
organization, which is highly regarded in the insurance industry.
Our specialty insurance platform will fit well into subsidiaries
Crum & Forster and Hudson Insurance Group, facilitating a
seamless transition for our customers. I want to express my deep
gratitude to our employees, business partners, management and board
for their role in building our successful specialty insurance
company."
BofA Merrill Lynch is acting as exclusive financial advisor to
American Safety and Shearman & Sterling LLP is acting as legal
counsel to American Safety.
Torys LLP is acting as legal counsel to Fairfax.
Background
Fairfax is a financial services holding company which, through
its subsidiaries, is engaged in property and casualty insurance and
reinsurance and investment management.
American Safety is a Bermuda-based holding company offering
innovative insurance solutions for underserved specialty risks
through its U.S.-based program administrator, American Safety
Insurance Services, Inc., and its U.S. insurance and Bermuda
reinsurance companies.
Forward-looking Statements
This press release includes certain forward-looking statements.
Such forward-looking statements are subject to known and unknown
risks, uncertainties and other factors which may cause the actual
results, performance or achievements of Fairfax or American Safety
to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements. Such factors include, among others, the timing and
completion of the merger, the outcome of any legal proceedings
relating to the merger, the effect of the announcement on American
Safety's customer relationships, operating results and business
generally. Such factors also include, but are not limited to, the
risks and uncertainties described in Fairfax's reports filed with
the SEC and securities regulatory authorities in Canada, which are
available at www.sec.gov and www.sedar.com, and in American
Safety's reports, including its Annual Report on Form 10-K for the
year ended December 31, 2012, filed with the SEC, which are
available at www.sec.gov. Fairfax and American Safety disclaim any
intention or obligation to update or revise any forward- looking
statements, except as required by law.
Additional Information
In connection with the proposed transaction, American Safety
will file a proxy statement with the Securities Exchange Commission
("SEC"). AMERICAN SAFETY'S INVESTORS AND SHAREHOLDERS ARE ADVISED
TO READ THE PROXY STATEMENT AND OTHER RELEVANT DOCUMENTS FILED WITH
THE SEC AS THEY BECOME AVAILABLE, AS THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE TRANSACTION AND THE PARTIES TO THE
TRANSACTION.
Investors and shareholders may obtain free copies of the proxy
statement and other documents filed by American Safety (when
available) at the SEC's web site at www.sec.gov. or at American
Safety's web site at www.asih.bm. The proxy statement and other
documents may also be obtained, when available, at no charge from
American Safety by directing such request to American Safety
Insurance Holdings, Ltd., the Boyle Building, 2nd Floor, 31 Queen
Street, Hamilton HM11, Bermuda, Attn: Corporate Secretary,
telephone: (441) 542-7938.
American Safety and its directors, executive officers and other
members of its management and employees may be deemed to be
participants in the solicitation of proxies from American Safety
shareholders in connection with the proposed transaction.
Information concerning the interests of those persons is set forth
in American Safety's annual report on Form 10-K and amendment
thereto on Form 10-K/A for the year ended December 31, 2012, both
filed with the SEC, and will also be included in the proxy
statement relating to the transaction, when available.
Contacts: Fairfax Financial Holdings Limited John Varnell Vice
President, Corporate Development 416-367-4941 Media Contact Paul
Rivett Vice President, Operations 416-367-4941 Contacts: American
Safety Financial Corporation Investor Relations Stephen R.
CrimScrim@amsafety.bm (441) 296-8560
Fairfax Financial (TSX:FFH.U)
Historical Stock Chart
From Apr 2024 to May 2024
Fairfax Financial (TSX:FFH.U)
Historical Stock Chart
From May 2023 to May 2024