Bermuda-based Platinum Underwriters Holdings Ltd. announced that it has amended the options issued to The St. Paul Travelers Companies, Inc., formerly The St. Paul Companies, Inc. at the time of Platinum’s initial public offering in November 2002. Platinum was formed through the spin-off of the St. Paul’s reinsurance operations prior to its merger with Travelers.
“The options originally required Platinum to issue up to 6 million common shares to St. Paul upon payment by St. Paul of an exercise price of $27.00 per common share,” said the announcement. “As a result of the amendment, in lieu of paying $27.00 per share, any exercise by St. Paul of its options will be settled on a net share basis, which results in Platinum issuing to St. Paul a number of common shares equal to the excess of the market price per share, determined in accordance with the amendment, over $27.00 less the par value per share multiplied by the number of common shares issuable upon exercise of the options, divided by that market price per share.”
The bulletin also noted that in November Platinum had “entered into a similar amendment of the option for 2.5 million common shares issued to RenaissanceRe Holdings Ltd. at the time of Platinum’s initial public offering.” RenRe has approximately a 10 percent stake in Platinum.
CEO Gregory Morrison commented: “We are pleased to have secured these amendments, which we believe will further reduce any market overhang associated with the options issued at the time of our public offering. The amendments decrease the negative impact on basic earnings per share that may have resulted from the original form of exercise.”
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