Bermudian reinsurance firm RenaissanceRe (RenRe) has announced that Tokio Marine plans to sell its 3.9% stake in the company, worth about $334 million.
The stake will be offloaded via an underwritten public secondary offering of 1,739,071 common shares by Tokio Marine & Nichido Fire Insurance Co., Ltd.
These shares formed part of the purchase price when RenRe acquired Tokio Millenium Re back in March 2019.
The $1.5 billion consideration for this deal consisted of $1.22 billion in cash and $250 million of RenRe common shares.
Tokio Marine will receive all of the net proceeds from the share offering, which is expected to close on January 9, 2020, subject to customary closing conditions.
Additionally, RenRe disclosed that Morgan Stanley & Co. LLC is acting as the sole underwriter for the offering.
Analysts at Wells Fargo commented on the offering: “After the close on 1/6 RNR announced that Tokio Marine was selling its 1.7 million share ownership (or around 4% of Ren’s shares outstanding) in the company that it had acquired at the time of selling its reinsurance business (TMR) to Ren last March.”
“Ren waived the one year lock-up period (which was due to expire in March 2020), letting Tokio Marine liquidate its stake sooner-than-expected,” they explained. “Given that TMR sold its reinsurance business to Ren we did not expect them to be a long-term shareholder (and do not expect investors did either).”
RenRe is a global provider of property, casualty and specialty reinsurance and certain insurance solutions to customers, principally through intermediaries.
Tokio Marine, meanwhile, is the largest property and casualty insurance group in Japan and operates across 38 countries. It also forms part of Japanese conglomerate Mitsubishi.