Toronto-based Fairfax Financial Holdings Limited said it will make a formal offer of $686 million Canadian ($556.5 million U.S. dollars at current exchange rate), or $39 Canadian per common share, to acquire the remaining outstanding common shares of commercial insurer Northbridge Financial Corp.

Fairfax, a financial services holding company, currently owns 63.1 percent of Toronto-headquartered Northbridge's outstanding common shares. The firm said the price of $39 Canadian per Northbridge common share "represents a premium of approximately 28.9 percent over the Nov. 13 $30.25 Canadian closing price of Northbridge common shares on the Toronto Stock Exchange," which was the day Fairfax approached Northbridge's board of directors to consider the proposed transaction.

Should the transaction go through, Fairfax said it is expected that Northbridge, Canada's largest commercial property-casualty insurance group, would become a wholly-owned subsidiary of Fairfax.

Prem Watsa, chairman and chief executive officer of Fairfax, said, "The Fairfax proposal represents an excellent opportunity for Northbridge shareholders to realize a significant premium as well as immediate liquidity for their shares."

He said Northbridge president and CEO Mark Ram "has done an exceptional job, and we're very pleased with the leadership he has brought to Northbridge..."

Mr. Watsa said that as Fairfax has done with its decentralized U.S. insurance operation, Crum & Forster, the firm intends for Northbridge to continue operating on a standalone basis, with Mr. Ram and his team in charge of all aspects of Fairfax Canadian insurance operations.

Fairfax said it expects to send its formal offer to the shareholders of Northbridge "as soon as practicable and to make all necessary filings with the appropriate securities regulatory authorities."

Special Reports /

Fairfax To Complete Northbridge Takeover For $686 Million

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