Prem Watsa’s Fairfax to sell Odyssey Group stake worth $900m

Prem Watsa’s  Fairfax Financial Holdings, the property and casualty re/insurance conglomerate which includes OdysseyRe, Allied World and Brit, has agreed to sell its $900 million worth of shareholding in Odyssey Group Holdings.

The firm has entered into an agreement to offload its 9.99 percent interest in Odyssey Group to Canadian pension fund CPPIB Credit Investments and Ontario Municipal Employees Retirement System (OMERS).

Under the deal, an affiliate of CPPIB and OMERS, a defined benefit pension plan for Ontario’s municipal sector employees, will each acquire 100 percent of a new series of securities representing a 4.995 percent interest in Odyssey.

After closing, Fairfax will retain the flexibility to repurchase the interests of OMERS and CPPIB Credit Investments in Odyssey Group over time.

Fairfax has revealed its intention to commence an issuer bid to repurchase for cancellation up to $1 billion of its subordinate voting shares from shareholders for cash.

The deal will proceed by way of a “modified Dutch auction”, which allows shareholders to select the price, within the specified range, at which each shareholder is willing to sell all or a portion of their shares.

Prices ranges from $425 to $500 per share, for up to a maximum of 2,352,941 shares, or approximately 8.72 percent of Fairfax’s total issued and outstanding stake.

Closing of the Odyssey Group transaction is subject to customary closing conditions and is expected to occur during the fourth quarter of 2021.

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