Third Point Reinsurance Ltd., which counts hedge-fund manager Daniel Loeb as a founding shareholder, said it plans to raise as much as $322.2 million in an initial public offering.
The reinsurer, almost all of whose assets are managed by Loeb’s Third Point LLC, is selling 21.5 million shares for $12.50 to $14.50 apiece, according to a document filed with the U.S. Securities and Exchange Commission today. Third Point Re’s shareholders are offering a further 697,730 shares.
Third Point Re will target “stable underwriting profits,” according to today’s filing, giving Loeb, 51, access to a pool of funds that is less tied to natural disasters than many reinsurers’ portfolios. Rather than selling coverage for catastrophes, Third Point focuses on assuming casualty risks from primary insurers.
“The level of volatility in our reinsurance portfolio will be determined by market conditions but will typically be lower than that of most other reinsurance companies,” Third Point Re said in the filing. “Most of our clients buy reinsurance from us for capital-management purposes, primarily to increase their capacity to write insurance premium.”
The sale is set to give the Bermuda-based reinsurer a market value of about $1.4 billion if shares are sold at the middle of the price range used to canvass investor interest in the IPO. The pricing is expected on Aug. 14, according to data compiled by Bloomberg.
JPMorgan, Credit Suisse
JPMorgan Chase & Co., Credit Suisse Group AG, Morgan Stanley, Bank of America Corp. and Citigroup Inc. are among the banks managing the sale, according to the filing. They have an option to purchase a further 3.3 million shares if they exercise the overallotment option in full.
Third Point Re had net income of $26.2 million in the second quarter, compared with a loss of $31.1 million in the year-earlier period, according to today’s filing.
Loeb focuses on so-called event-driven investing, buying and selling stocks or bonds of companies going through changes like spinoffs or mergers. He has pushed companies, including Yahoo! Inc. and Sony Corp., to make changes with the goal of driving up share prices.
His main fund returned 3.3 percent in the second quarter and 12.6 percent in the first half of the year, according to a letter from the billionaire to investors. The fund returned an average of 17.8 percent a year since inception in late 1996.