Bermuda-based specialty P&C insurer Argo has announced that its shareholders have voted to approve an agreement for the company to be acquired by Brookfield Reinsurance, the operator of a financial services business providing capital-based solutions to the insurance industry.
The all-cash acquisition proposal, made by Brookfield Reinsurance back in February, values Argo at approximately $1.1 billion and has already been approved by Board members.
The consideration per Argo common share represents a 6.7% premium to the firm’s closing share price on February 7th, 2023, and a 48.7% premium over its closing share price on September 7th, 2022.
Going forward, the deal still remains subject to other customary closing conditions, including the receipt of required regulatory approvals, but Argo and Brookfield Reinsurance expect to complete in the second half of 2023.
After a challenging period for the specialty insurer and reinsurer, Argo announced in April of last year that its board had begun to explore ‘strategic alternatives’ including a potential sale, merger, or other strategic transaction.
Later in the year, the firm defended its strategic review process amid mounting pressure from activist investor Capital Returns and its allies, who were seeking to replace two directors on Argo’s Board at the annual general meeting (AGM).
In the end, Argo’s nominations for members of its Board where “overwhelmingly” voted in favour of by shareholders, after the withdrawal of two board nominations by Capital Returns Master just days before.
Following the original announced, Argo’s Executive Chairman and CEO Thomas Bradley noted that the agreement with Brookfield Reinsurance “brings a successful conclusion to Argo’s strategic alternatives review process and represents the best path forward for Argo, our employees and policyholders while also maximizing value for our shareholders.”
“By joining Brookfield Reinsurance, Argo will continue to serve our brokers with greater financial strength and opportunities to grow as a U.S.-focused specialty insurer,” he added.
For Brookfield Reinsurance, which launched in 2020, the agreement comes less than a year after it completed its acquisition of American National in an all-cash transaction, valued at approximately $5.1 billion.
