Richmond, Va.-based insurer James River Group Inc. said it hassigned an agreement to be acquired by D. E. Shaw group, aBermuda-based private equity firm, in a transaction valued atapproximately $575 million.

In a statement, James River said stockholders would receive$34.50 in cash per share for the purchase. The company is listed onthe NASDAQ Exchange.

The company said it expects the transaction to be completed inthe second half of 2007, subject to stockholder and regulatoryapprovals and other closing conditions.

Under the terms of the merger agreement, James River and acommittee of the board of directors will solicit superior bids fromthird parties during the next 55 calendar days until Aug. 5.

If there is a superior bid, D. E. Shaw group will receive atermination fee of approximately $7.2 million. The company may alsorespond to unsolicited bids during that period.

"We are pleased with the prospect of having such awell-capitalized and committed partner as we go forward," said J.Adam Abram, president and chief executive officer of JamesRiver.

He said after the transaction closes, the company expects a newBermuda-based reinsurance company will be added to its group.

James River Group is an insurance holding company that owns andmanages specialty property-casualty insurance companies: JamesRiver Insurance Company, an excess and surplus lines carrier, andStonewood Insurance Company, a workers' compensation carrier.

The D. E. Shaw Group is a global investment and technologydevelopment firm with more than 1,100 employees and approximately$30 billion in aggregate investment capital.