RenRe aims to raise $1bn in share sale
RenaissanceRe is looking to raise about $1 billion in capital through a sale of shares.
The Bermudian-based reinsurer announced an underwritten public offering of 5.5 million of its common shares on Tuesday.
At the same time, US insurer State Farm Mutual Automobile Insurance Company, which already owns approximately 4.4 per cent of RenaissanceRe's total common shares outstanding, has agreed to buy a further $75 million worth of shares in a concurrent private placement, subject to the consummation of the underwritten public offering and other conditions, at the public offering price.
“We intend to use the net proceeds from this offering and the concurrent private placement for general corporate purposes, which may include expanding our existing business lines, entering new business lines, forming new joint ventures, or acquiring books of business from other companies,” RenRe stated in a prospectus filed with the US Securities and Exchange Commission.
RenRe said it expected that the net proceeds from the offering and the placement would amount to just over $957 million, assuming a public offering price of $164.91 per share, the closing price of RenRe shares on Monday.
Morgan Stanley and Goldman Sachs are acting as joint book-running managers and representatives of the underwriters for the offering.
The underwriters will have the option to purchase up to an aggregate of 825,000 additional common shares from the company.
If the underwriters exercised their full allocation, the total proceeds would amount to nearly $1.09 billion at an assumed price of $164.91 per share, RenRe added.
Later on Tuesday, the company announced a price of $166 per share for the offering, before underwriting discounts and commissions. The offering is expected to close on Friday, subject to customary closing conditions.
RenRe's shares closed 5.2 per cent higher on the Nasdaq Stock Exchange on Tuesday and gained a further 7.5 per cent yesterday to close on $186.63.