RenRe responds to investor call to seek a buyer
RenaissanceRe Holdings has responded to a letter by its investor TimesSquare Capital Management, urging the Bermuda-based re/insurer to review its strategy and seek a buyer for the business.
TimesSquare, an institutional asset management firm with a significant stake in RenaissanceRe Holdings, has suggested that RenRe should explore a potential sale of the company.
In the letter, TimesSquare Capital Management argued that a structural transformation of RenRe’s core property catastrophe reinsurance business, driven by the growing participation of alternative capital has had an adverse impact on the long-term risk-adjusted returns achievable in this business.
The investor also suggested that the “premier position” that RenRe enjoys as a standalone reinsurer has not resulted in investors ascribing an improved valuation for the company, even as acquisitions of peer companies have been generally consummated at escalating valuation multiples over the past two years.
“We remain steadfast in our belief that an immediate review of strategic alternatives, including an exploration of a potential sale of the company, is imperative,” the investor said in a Sept. 7, 2018 dated letter to the RenRe management board.
In response to the letter and the investor’s recommendation, RenRe seemed to suggest that it is keeping its strategy.
“RenaissanceRe welcomes open and constructive communications with all shareholders and values their input,” the firm said in an official statement. “In this regard, members of our senior management team have held numerous meetings with TimesSquare over the past few years. In particular, both our chairman of the board and our chief executive officer have separately met with TimesSquare in recent months.
“We have considered fully TimesSquare’s views and have shared them with our board. Our board understands, and is committed to, its fiduciary duties to act in the best interests of all shareholders. Our board and management team continuously focus on enhancing shareholder value through execution of the company’s strategic plan. We will maintain an open and active dialogue with all of our shareholders as we continue to work to enhance shareholder value.”
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