BF&M strategic partnership with Argus shareholder Equilibria
BF&M, the holding company of the BF&M group of Bermuda-based insurance companies, has unveiled a strategic partnership with Equilibria Capital Management, a Bermuda-headquartered global asset management company and the largest shareholder of Argus.
Under the terms of the strategic partnership, Equilibria will grant BF&M an exclusive option to acquire a 13.7% stake in Argus. BF&M is not obliged to exercise its right under the option but may choose to do so.
Additionally, BF&M will invest in a dedicated fund which will hold a 16.3% stake in Argus.
The partnership also has several other strategic implications. These include a sale-leaseback transaction whereby Equilibria will acquire BF&M’s headquarters and adjoining building on Pitts Bay Road (110 Pitts Bay Road and 112 Pitts Bay Road) and enter into a long-term lease agreement with BF&M for the buildings. This transaction will enable BF&M to further strengthen its balance sheet whilst allowing the company to continue to serve its clients from its historical headquarters.
The deal will also have implications for asset management. Equilibria will provide BF&M with access to a range of investment opportunities to further diversify its portfolio and achieve enhanced returns. As part of this agreement, BF&M has committed to a significant investment in a dedicated Equilibria investment fund which will focus on projects of mutual interest. This will include the initial investment in respect of a 16.3% stake in Argus.
Notably, BF&M will not require any external financing to either exercise its option or to fund its investment in the Equilibria-dedicated fund.
Anthony Joaquin, chairman of BF&M, said: “Our Board and leadership team have carefully considered this transaction to ensure it was in our shareholders’ best interests in light of the proposed transaction between Camellia and Argus. With this multifaceted strategic partnership and stock purchase right, BF&M believes it is well positioned to add significant and sustained value for shareholders, clients, employees, and the broader insurance sector in Bermuda.”
Abigail Clifford (pictured), BF&M Group president and CEO, said: “We are excited to establish an expansive relationship with Equilibria on multiple fronts to enhance BF&M’s strategic positioning and ability to lead the continued growth of Bermuda’s insurance sector. We look forward to collaborations geared towards realising further capital efficiencies and gaining access to additional asset allocation opportunities through a trusted capital management partner.”
Daniel Tafur, partner of Equilibria, stated: “We believe that this strategic partnership sets the stage for the creation of significant shareholder value for both BF&M and Equilibria as well as all other Argus shareholders. BF&M has a storied history spanning over 120 years and is uniquely positioned financially and strategically to lead the growth of Bermuda’s insurance sector in the coming years. We look forward to working with BF&M and its management team on a range of important initiatives.”
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