Tower Group Announces Stock Conversion Number for Pending Merger with Canopius Holdings Bermuda Limited

  Tower Group Announces Stock Conversion Number for Pending Merger with
  Canopius Holdings Bermuda Limited

Business Wire

NEW YORK -- March 8, 2013

Tower Group, Inc. ( NASDAQ:TWGP ) has been informed by Canopius Group Limited
(“CGL”) that in conjunction with the pending merger between Canopius Holdings
Bermuda Limited (“Canopius Bermuda”) and Tower, CGL has priced on March 6,
2013 its private sale of 100% of the shares of Canopius Bermuda to third party
investors for an aggregate consideration of $216,697,637. As a result, subject
to the approval of the merger by Tower stockholders at Tower’s special meeting
of stockholders on March 12, 2013, Tower expects the merger to close on or
about March 13, 2013.

Upon the closing of the merger Tower stockholders will receive 1.1330 shares
of Canopius Bermuda for each outstanding share of Tower common stock held
(referred to in Tower’s proxy statement relating to the merger as the “stock
conversion number”).

Concurrent with the closing of the proposed merger, Canopius Bermuda will
change its name to Tower Group International, Ltd. (“Tower Ltd.”), and its
shares are expected to be listed on NASDAQ under the symbol “TWGP,” which is
the same trading symbol as Tower. The opening price of shares of Tower Ltd.
will be adjusted to account for the larger number of shares issued to existing
Tower stockholders as a result of the conversion ratio.

The table below presents various financial highlights as of December 31, 2012
for Tower Group, Inc. and pro forma to include Canopius Bermuda as of the
closing date of the pending merger.

Tower Group, Inc.                                                         
Unaudited Selected Financial Information
Pro Forma and December 31, 2012
(000's except per share amounts)
                  
                      December 31, 2012
                      As Reported    Pro Forma        Pro Forma
                                        (1)(2)              (1)(3)
                                                                             
Tower Group,
Inc.                  $   980,836       $  1,186,678        $  1,186,678
Stockholders'
Equity
                                                            
Tangible Tower
Group, Inc.           $   639,464       $  814,999          $  814,999
Stockholders'
Equity*
                                                                             
Shares                    38,406           50,785              57,540
Outstanding
                                                                             
Tower Book            $   25.54         $  23.37            $  20.63
Value per Share
                                                                             
Tower Tangible
Book Value per        $   16.65         $  16.05            $  14.16
Share*
                                                                             
Annual
Dividends per         $   0.75          $  0.75             $  0.66
Share
                                                                             
Tower 2013
Operating EPS         $2.55-$2.75       $2.75-$2.95         $2.43-$2.60
Forecast
                                                                             
Tower 2014
Operating EPS         $3.05-$3.25       $3.65-$3.85         $3.22-$3.40
Forecast
                                                                             
(1) Includes Tower Group, Inc. at Dec. 31, 2012 and Canopius Holdings
Bermuda Limited estimated as of
closing date of merger
(2) Pro Forma Dec. 31, 2012 with Canopius Holdings Bermuda Limited
shares divided by stock conversion factor
(3) Pro Forma Dec. 31, 2012 with Tower Group, Inc. shares multiplied by
stock conversion factor
* Pro forma includes estimate of $30.3 million for closing adjustments
                                                                             
Canopius Holdings Bermuda Limited (CHBL) Pricing
Information
(000's except number of shares sold, per share
amounts and stock conversion number)
CHBL Tangible                           $  197,970
Net Asset Value
Value of the
Retained                                   7,893
Business of
CHBL
Aggregate
amount of                                  10,835
Placement Fees
Investment
discount for
third party                               16,469
investors
acquiring CHBL
shares
Total                                   $  233,167
                                                                             
Aggregate
number of CHBL                             14,025,737
shares sold
                                                                             
Adjusted CHBL                           $  16.62
Price per share
                                                                             
Tower Closing
Share Price on                          $  18.83
NASDAQ on
3/6/13
                                                                             
Stock
Conversion                                 1.1330
Number
                                                                             

Forward-Looking Statements

This press release contains forward-looking statements, including, but not
limited to, statements about the anticipated consummation of the proposed
merger and other statements that are not historical facts. These
forward-looking statements are based on Tower’s current expectations and
inherently involve significant risks and uncertainties. Actual results and the
timing of events could differ materially from those anticipated in such
forward-looking statements as a result of these risks and uncertainties, which
include, without limitation, risks related to Tower’s ability to complete the
transaction on the proposed terms and schedule, including risks and
uncertainties related to the satisfaction of the closing conditions related to
the proposed merger. There can be no assurance that Tower will be able to
complete the proposed merger on the anticipated terms, or at all.

Additional Information and Where to Find It

In connection with the proposed merger, Tower and Canopius Bermuda have filed
documents with the Securities and Exchange Commission (“SEC”), including the
filing by Tower of a definitive proxy statement/prospectus relating to the
merger, and the filing by Canopius Bermuda of a registration statement on Form
S-4 (File No.333-183661) (the “Registration Statement”) that includes the
proxy statement/prospectus relating to the merger. The Registration Statement
has been declared effective by the SEC and a definitive proxy
statement/prospectus has been filed with the SEC by Tower and has been mailed
to Tower’s stockholders in connection with the merger. INVESTORS AND SECURITY
HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND THE RELATED
DEFINITIVE PROXY STATEMENT/PROSPECTUS BECAUSE THEY CONTAIN IMPORTANT
INFORMATION ABOUT TOWER, CANOPIUS BERMUDA, THE PROPOSED MERGER AND THE MATTERS
DESCRIBED ABOVE. Investors and security holders may obtain free copies of
these documents and other related documents filed with the SEC at the SEC’s
website at www.sec.gov, by directing a request to Tower’s Secretary at Tower
Group, Inc., Attention: Secretary, 120 Broadway, 31st Floor, New York, New
York 10271, or by calling Tower at 212-655-2000. Investors and security
holders may obtain free copies of the documents filed with the SEC on Tower’s
website at www.twrgrp.com under the heading “Investors” and then under the
heading “SEC Filings.”

About Tower Group, Inc.

Tower Group, Inc. offers diversified property and casualty insurance products
and services through its operating subsidiaries.

Our Commercial Insurance Segment offers a broad range of commercial lines
property and casualty insurance products to small to mid-sized businesses
distributed through a network of retail, wholesale and program underwriting
agents on both an admitted and non-admitted basis. This segment also provides
reinsurance, primarily on a quota share basis, to other insurance providers.

Our Personal Insurance Segment offers a broad range of personal lines property
and casualty insurance products to individuals distributed through a network
of retail and wholesale agents.

Our Insurance Services Segment provides underwriting, claims and reinsurance
brokerage services to insurance companies.

For more information visit Tower’s website at http://www.twrgrp.com/

Contact:

Tower Group, Inc.
Bernie Kilkelly, 212-655-8943
Managing Vice President, Investor Relations
bkilkelly@twrgrp.com
 
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