State Farm backs RenRe as Bermuda reinsurer seeks almost $1bn in fresh capital
Bermuda-based RenaissanceRe Holdings is looking to raise around $907 million in a fresh capital raise by selling 5.5 million of its ordinary shares through a public offering. The reinsurer's existing stockholder State Farm has agreed to purchase approximately $75 million worth of the common shares.
The company plans to use the net proceeds from this offering for "general corporate purposes, which may include expanding existing business lines, entering new business lines, forming new joint ventures, or acquiring books of business from other companies".
The common shares are traded on the New York Stock Exchange (NYSE) under the symbol 'RNR'. The last reported sale price of common shares as of June 1, 2020 was $164.91 per share, according to RenRe.
State Farm Mutual Automobile Insurance Company, which currently owns approximately 4.4 percent of RenaissanceRe’s total common shares outstanding, has entered into an investment agreement to purchase approximately $75 million of the company’s common shares at the public offering price per share in a concurrent private placement exempt from the registration requirements of the US Securities Act of 1933. The agreement is subject to the consummation of the underwritten public offering and other customary conditions.
Morgan Stanley & Co. and Goldman Sachs & Co. are acting as joint book-running managers and representatives of the underwriters for the offering.
The underwriters will have the option to purchase up to an aggregate of 825,000 additional common shares from the company.
