View this article online: https://www.insurancejournal.com/news/international/2002/09/23/23254.htm
Bermuda-based RenaissanceRe Holdings Ltd. announced that it has reached an agreement with Platinum Underwriters Holdings, Ltd. to purchase 3,960,000 of its common shares in a private placement
Platinum was established in Bermuda by the St. Paul Cos. in a move that spun off St. Paul Re and other reinsurance operations into a separate company. The St. Paul will retain a 24.9 percent stake, but will have voting rights equivalent to 9.9 percent of the voting power.
RenRe said it would “purchase Platinum’s common shares at a price per share equal to the initial public offering price, less the underwriting discount.” The company’s investment will be in the range of $82 to $100 million, giving it approximately a 9.9 percent stake in Platinum – equal to that retained by the St. Paul. RenRe also acquired a ten-year option to purchase up to 2,500,000 common shares of Platinum at a per share price equal to 120 percent of the initial public offering price.
The St. Paul had planned an initial public offering of Platinum shares in July, but postponed the offering due to the sudden drop in the capital markets. It announced earlier this month that it would was planning to go ahead with it, but reduced the total number of shares offered from 40 million to 34 million. The offering price has been set at between $22.50 and $23.50 per share. No firm date for the IPO has been announced, but is expected to take place soon
As RenRe and Platinum are both Bermuda companies, and the share sale is a private placement outside of the U.S. it is not dependent on the IPO, except to establish the definitive price of the shares. RenRe said the shares would not initially be registered for sale under the Securities Act of 1933.