Third Point Re unveils 'important milestone' in $788m Sirius merger deal

Bermuda-based specialty reinsurer Third Point Re and multi-line re/insurer Sirius Group have reached a major  merger milestone in relation to their preference shareholders.

Shareholders of Sirius International Insurance Group have agreed to remain investors in the joint company, to be renamed SiriusPoint, following the closing of their cash and stock merger deal, valuing at approximately $788 million.

Under the agreement, the four institutional investors that hold Sirius's Series B preference shares have agreed that upon the closing of the merger, they will convert their existing shares of Sirius into up to $260 million face value of newly-issued Series B preference shares of SiriusPoint.

The four shareholders are Bain Capital Special Situations Asia, CCOF Master (Carlyle), Centerbridge Credit Partners Master, and Centerbridge Special Credit Partners III, and GPC Partners Investments (Canis).

The new preference shares will be perpetual in nature, carry an 8.00 percent annual cumulative cash dividend, and will be callable by SiriusPoint on each fifth anniversary of the closing of the merger.

At the time of issuance, SiriusPoint will have the option to substitute up to $60 million in cash in lieu of an equal face amount of the new preferred stock, or pay in cash the agreed face amount of $260 million in full.

In exchange for the new preference shares, the Cornerstone Investors have also agreed to toll certain potential claims they may have against Sirius from the date of the agreement until the closing of the merger or the earlier termination of the agreement, and upon the closing of the merger agree to release such potential claims.

"Reaching an agreement with the Cornerstone Investors is an important milestone for SiriusPoint," said Sid Sankaran, currently chairman of the company and slated to be chief executive officer of SiriusPoint.

"This agreement provides us with certainty regarding our capital position going forward, resolves amicably a potential litigation, and constitutes an important endorsement of SiriusPoint by sophisticated investors. Having this impressive slate of investors in the combined company further reinforces our strong balance sheet as we support our clients and broker partners in the upcoming renewal season."