Tower Group merger triggers put option on 5% convertibles due 2014

By Toni Weeks

San Luis Obispo, Calif., March 22 - Tower Group, Inc. distributed to holders of its 5% convertible senior notes due 2014 a fundamental change company notice allowing the holders to exercise the put option on the notes, according to an 8-K filing with the Securities and Exchange Commission.

A fundamental change occurred on March 13 as the consequence of the company's merger with and into an indirect subsidiary of Canopius Holdings Bermuda Ltd., which is now known as Tower Group International, Ltd.

As a result of the merger, the holders of the notes have the right to require Tower Group to purchase their notes at par plus accrued interest in accordance with the terms of the indenture. Holders may put back the notes until April 26.

Holders may instead convert their notes. The current conversion rate is 42.2491 shares per note.

U.S. Bank NA is the trustee for the notes.

Tower Group is a New York-based provider of commercial, personal and specialty property and casualty insurance products and services.

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