Enstar turns up pressure on Watford Re, points to higher takeover offer

Bermuda-based re/insurer Enstar has followed up its interest in  acquiring Watford Re in a "mutually beneficial transaction that provides a fair price to Watford’s shareholders", saying that it could propose a higher offer once the due diligence has been finalised.

On September 30, Enstar proposed to acquire 100 percent of Watford Holding’s ordinary share capital for $31.00 per ordinary share at closing, which represents a premium to current market price of 35.1 percent.

In a second letter sent to Watford Re's board on October 5, the company reconfirmed its "continued interest in a potential transaction".

Enstar stated that it is seeking to enter into a non-disclosure agreement with the Arch Capital-backed reinsurer for due diligence.

"We believe that the appropriate next step would be to enter into a non-disclosure agreement to allow us to complete our due diligence in an expeditious manner," the company said in a US Securities and Exchange Commission filing.

Enstar added that on completion of due diligence, it is likely that it may be able to increase its offer.

"We look forward to working with Watford and engaging in next steps towards the agreement of a mutually beneficial transaction that provides a fair price to Watford’s shareholders," it said.

Earlier last week, the company said that it is "willing to dedicate the necessary resources, including an experienced set of M&A professionals, to complete our due diligence and the negotiation of definitive documentation expeditiously".