Renaissance Re Buys Managing Agent Spectrum For $709 M

NU Online News Service, June 8, 12:31 p.m. EDT

Bermuda Based RenaissanceRe Holdings Ltd., announced today it has agreed to acquire Spectrum Partners, Ltd., in a stock deal worth approximately $709 million at current prices.

Spectrum has as its principal operating subsidiary Spectrum Syndicate Management Ltd., a Lloyd's Managing Agent.

No other terms were announced for the transaction, approved by Lloyd's in April 2009, which will see RenaissanceRe establish RenaissanceRe Syndicate 1458, for which Spectrum serves as the Managing Agent.

RenaissanceRe said its syndicate operations began last month, with underwriting of property and specialty business beginning June 1.

Richard Murphy, chief executive officer of Spectrum, will continue in his current capacity and Spectrum's management team will remain in place. The transaction is subject to approval by Lloyd's and the Financial Services Authority.

Neill Currie, RenaissanceRe Holdings president and CEO, said, "Over the last year we have had the opportunity to work with Spectrum and recognize the value and experience that they bring to RenaissanceRe and our new Lloyd's Syndicate.

"Consistent with our strategy to better serve our customers through our presence in the Lloyd's market, we believe a combination would enable us to operate effectively and efficiently in London and to meet the growing demand for our products and services. We look forward to welcoming the management and staff of Spectrum to the RenaissanceRe organization."

The parties have entered into definitive transaction documents granting RenaissanceRe an option to purchase all of the outstanding shares of Spectrum Partners.

If the option is exercised and, subject to customary conditions, the transaction is completed, as part of the consideration for their shares Mr. Murphy and Kim Fox, Spectrum chief operating officer, will receive an aggregate of 105,689 and 42,275 common shares of RenaissanceRe.

Renaissance Holdings Ltd., closing price Friday on the New York Stock Exchange was $47.92

Those shares would be subject to certain vesting conditions based in part upon continued performance of services to Spectrum. Other terms of the arrangement were not disclosed.