21st May 2025 12:15
(Alliance News) - Third Point Investors Ltd on Wednesday proposed an acquisition of Cayman-Islands-based annuity reinsurer, Malibu Life Reinsurance SPC, as it looks to solve the "structural headwinds" impacting the investment trust sector.
The feeder fund that invests in the Third Point Offshore Fund said it has entered into a sale and purchase agreement to acquire Malibu Life, a reinsurance platform focused on the US fixed annuity market.
The strategic rationale behind the transaction is to create a "fast-growing, fully capitalised, London-listed, reinsurance operating company."
Third Point Investors noted that Malibu is an established reinsurance platform within the "estimated USD1 trillion and growing fixed annuity market in the US".
Under the terms of the combination, Third Point Investors is set to acquire Malibu from Malibu Life Holdings LLC, which is owned by Third Point Opportunities Master Fund LP.
The acquisition is structured as an all-share deal, on a "NAV for NAV" basis, with Malibu Life Holdings receiving new shares in Third Point Investors.
It has agreed to acquire Malibu at its tangible book value of around USD68 million, with the new shares issued in exchange to be valued at its NAV per share.
Third Point Investors noted that, to effect an orderly rotation of shareholders who are seeking liquidity, it is considering a USD75 million tender offer.
It noted conditional commitments from both new and existing investors of USD55 million in support of the tender offer at a discount to NAV of 12.5%.
Third Point Investors said the transaction has been unanimously recommended by its strategy committee following the conclusion of its strategy review.
Shares in Third Point Investors fell 4.8% to USD24.94 on Wednesday in London.
The combination constitutes a reverse takeover under UK listing rules, and Third Point Investors will convene an extraordinary general meeting to seek the required level of shareholder approval.
Third Point Investors expects the combination to complete in the third quarter of this year.
Third Point Investors Chair Rupert Dorey said: "We are delighted to announce the proposed acquisition of Malibu. This is an innovative and transformational transaction that solves the structural headwinds impacting the investment trust sector to deliver a unique proposition for shareholders.
"Malibu is a high-potential reinsurance platform with a robust pipeline of reinsurance and other origination opportunities that will enable it to achieve scale in the near-term. The business plan for Malibu provides a clear path to steady, consistent returns, and an improved trading multiple for the company."
By Christopher Ward, Alliance News reporter
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