Third Point CEO Daniel Loeb has confirmed in a regulatory filing that he is no longer considering a potential acquisition to take specialty re/insurer SiriusPoint private, just weeks on from saying it would help improve the company’s financial position and enable it to better execute on its turnaround strategy.
In a new filing, Loeb explained that he had conducted “exploratory discussions” with SiriusPoint leaders but that they had been “unable to reach consensus on the value of a potential transaction.”
Accordingly, he will no longer be exploring a transaction of the nature that had been outlined in an earlier filing, which would have involved “a potential acquisition of all or substantially all of the outstanding Common Shares” of SiriusPoint.
The hedge fund boss currently owns a 9.31% 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.
Loeb had felt that going private may have best positioned SiriusPoint 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.”
But following recent discussions, he reported “total confidence” in SiriusPoint’s management team, and said he has faith the company is “undertaking the necessary steps” to position it for “long-term success by strengthening its balance sheet and enhancing its credit ratings.”
In particular, Loeb expressed support for the management team’s formulation and application of a fixed income and hedging program that he believes should provide “above-industry average investment returns, without taking on excess risk, while adhering to the highest regulatory standards.”
For its part, SiriusPoint acknowledged the decision by Loeb to conclude discussions regarding a potential transaction, and said a committee formed for the purpose of exploring a go-private deal had been “unanimous in its belief that its current strategy is the best path to deliver enhanced long-term value for shareholders.”
The company added that it had made “significant progress during the last seven months to improve underwriting performance, reduce volatility and rebalance its investment portfolio towards highquality fixed-income assets.”
SiriusPoint reported net income of $139 million for the first quarter of 2023 on a core combined ratio of 80.5%, helped by a significant improvement in the performance of its reinsurance segment.
The company’s share price fell by close to 10% in the hours following the news today.
