By Lisa Kerner
Charlotte, N.C., Sept. 18 - Fairfax Financial Holdings Ltd. agreed to acquire Odyssey Re Holdings Corp. for $65 per share in a cash tender offer valued at approximately $1 billion, it was announced on Friday.
The per-share offer price is a 29.8% premium to Odyssey's closing share price on Sept. 4, the date Fairfax announced it wanted to buy Odyssey.
As previously reported, Odyssey appointed a special committee to review all Fairfax proposals, including its initial offer of $60 per share.
Odyssey said its board of directors will recommend that stockholders tender their shares in the offer. Stockholder Marshfield Associates, Inc. agreed to tender the approximately 2.7 million shares it controls.
Fairfax plans to fund the tender offer and subsequent merger using the $983 million net proceeds from its previously completed public offering of subordinate voting shares plus available cash on hand.
According to Fairfax chairman and chief executive officer Prem Watsa, there will be no strategic changes at Odyssey once the merger is completed. The company will continue to be led by president and CEO Andy Barnard, Watsa said in a news release.
Bank of America Merrill Lynch will be the dealer manager for the tender offer and is also advising Fairfax.
Sandler O'Neill & Partners, LP is advising Odyssey's special committee.
Odyssey, located in Stamford, Conn., provides property and casualty reinsurance products worldwide.
Fairfax is a Toronto-based property and casualty insurance and reinsurance company.
| Acquirer: | Fairfax Financial Holdings Ltd.
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| Target: | Odyssey Re Holdings Corp.
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| Announcement date: | Sept. 18
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| Transaction total: | $1 billion
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| Price per share: | $65.00
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| Expected closing: | Upon approvals
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| Stock price for target: | NYSE: ORH: $62.49 on Sept. 17
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