Third Point CEO Daniel Loeb has said he will explore options to take specialty re/insurer SiriusPoint private, in an effort to improve the company’s financial position and better execute on its turnaround strategy.
Loeb outlined his plans in a regulatory filing this week, explaining that Third Point will look at “a potential acquisition of all or substantially all of the outstanding Common Shares” of SiriusPoint.
The hedge fund boss currently owns a 9.34% stake in SiriusPoint, having previously overseen the merger of his reinsurance unit, Third Point Re, with international multi-line re/insurer Sirius Group, which completed in February 2021.
Valued at around $1.4 billion, this stake makes Loeb the second largest investor in SiriusPoint after China Minsheng Investment Group, which owned a 33.75% stake as of March 1, 2022.
Since the creation of SiriusPoint, Loeb acknowledges that its management team has taken adequate steps to position the company for long-term success and says he remains “fully supportive” of the strategy and plan currently being pursued, in particular the approach to de-risking its investment portfolio and to strengthening its balance sheet and capital position.
“However,” Loeb’s filing continued, “[SiriusPoint] may be best positioned to execute on its turnaround strategy as a privately held company while continuing to strengthen its financial position, enhance its credit ratings, and adhere to the highest regulatory standards.”
While no potential price or timeline were offered, the filing adds that a special committee consisting of independent members of the Board could be formed to oversee the exploration of an acquisition deal.
For its part, SiriusPoint has officially acknowledged the indication of interest from Third Point and Loeb, and says it will “carefully evaluate” any acquisition proposal if and when one is received.
“The Company always welcomes dialogue with its investors and shares the common goal of maximizing value for all the Company’s shareholders,” SiriusPoint said, noting that it has made “significant progress” in recent months to reduce volatility and improve profitability.
While Loeb gave no assurances that a deal to take SiriusPoint private would ultimately be pursued even if a proposal is made, the company’s shares have nevertheless jumped some 11% in the wake of the news.
