Allshores Ltd plans to return up to $20 million to shareholders through a tender offer, a move the company said could put major cash into the hands of Bermudian investors while holding onto capital to support its insurance operations.

The tender offer allows eligible shareholders to sell shares back to the company at $29 apiece, a premium to recent market prices. Allshores said the initiative follows recent dividend increases and share buybacks and demonstrates its strong capital position.

The company added that, because more than 80 per cent of shareholders are based in Bermuda, much of the money returned is expected to remain in the local economy.

The company plans to purchase up to 689,655 shares at a fixed price of $29 each, representing a 20.9 per cent premium to the Bermuda Stock Exchange closing price on June 18 and a 23.7 per cent premium to the stock's 90-day volume-weighted average price.

Abigail Clifford, group president and chief executive, said the board believed the tender offer was an appropriate way to return excess capital.

"The tender offer is intended to provide shareholders who wish to sell their shares with an orderly mechanism to realise value at a fixed price," Ms Clifford said.

The company said the tender offer also provides a liquidity opportunity for shareholders in light of the relatively limited trading volumes in its shares on the BSX.

Shareholders who choose not to participate will hold onto their shares and stay eligible to receive the recently increased ordinary dividend.

The offer is voluntary and shareholders may decide whether to tender some, all or none of their holdings. If the offer is oversubscribed, tenders will be scaled back on a pro-rata basis, although shareholders holding fewer than 100 shares who tender their entire holdings will receive priority treatment.

Allshores is the parent company of the BF&M, Argus, Island Heritage and Island Health Services brands.

Tender instructions are due by July 17, with settlement expected on or about July 24.