Bermuda-based Montpelier Re said yesterday that initial investor White Mountains Insurance Group was reducing its stake in the company through a secondary listing.

The announcement came on the heels of Bermuda-based Endurance Specialty reporting recently that some of its initial investors were reducing their stake in that company through a secondary offering.

Montpelier and Endurance were two of a wave of re/insurers to set up on the Island in late 2001 in response to improving business conditions after a void in capacity following the September 11 terrorist attacks.

White Mountains was one of Montpelier?s initial investors, backing the company with $200 million of Montpelier?s total $1 billion in initial funding.

Montpelier went public in October, 2002 and the company?s market capitalisation now stands at some $2.25 billion.

Yesterday White Mountains, including some affiliate companies, as well as smaller stakeholder Prospector Partners said they would sell off about 4.8 million shares in the offering.

No date had yet been set for the offering but a filing with the US Securities and Exchange Commission (SEC) showed that White Mountains and its affiliates currently hold 17.9 million shares in Montpelier Re, or about 25.5 percent of the company?s 63.5 million outstanding shares

White Mountains said it would reduce its shares to about 13.5 million as part of a company restructuring, but that number was said to include its plans to purchase currently exercisable warrants to acquire 2.4 million shares of Montpelier from an existing warrant holder on March 15, 2004. After exercising these warrants, White Mountains? stake in Montpelier would be reduced to 18.4 percent, according to a press statement.

Montpelier will not be selling any common shares in the offering and will not receive any proceeds from the offering.

The joint book-running managers for the offering are Banc of America Securities LLC and Morgan Stanley. Co-managers for the offering are Credit Suisse First Boston, Deutsche Bank Securities and Lehman Brothers.