View this article online: https://www.claimsjournal.com/news/international/2007/04/04/78466.htm
Concurrent with the release of its final results for 2006, the Alea Group announced that it has “reached agreement on the terms of a recommended cash acquisition of Alea by FIN Acquisition, a company formed at the direction of Fortress Investment Group, to be implemented by means of an amalgamation between FIN Acquisition and Alea under the Bermuda Companies Act.”
Alea was severely impacted by the hurricanes of 2005. Both Standard & Poor’s and A.M. Best lowered their ratings on the Group below “A” grade (See IJ web site Sept. 26 and Sept. 12, 2005), and it subsequently went into run-off (See IJ web site Feb.26, 2006).
Praetorian Financial Group completed the acquisition of Alea North America Specialty Insurance Company (ANASIC) last year (See IJ web site Oct. 2, 2006).
In its final results the Group reported net insurance premium revenue in 2006 of $215.9 million, compared to $1.0867 billion in 2005. The announcement said the reduction reflected “the impact of the Group’s decision to cease writing new/renewal business and place its operations into run-off.”
Chairman John Reeve noted: “In 2006, Alea completed its transition from an on-going insurance operation to a business in run-off. The initial stages of run-off involved embedding the run-off strategy within the Group’s operating platform and simultaneously making the organizational changes necessary to position the Group to deliver its plan.”
Concerning the acquisition by FIN, Alea indicated that a majority of its Independent Directors considered the offer of 93 pence (app. $1.823) a share to be “fair and reasonable.” It values Alea’s capital shares at “approximately £162 million ($317.5 million) as of 3 April 2007, being the last business day prior to this announcement.”
The bulletin also notes that the acquisition “is conditional on, amongst other things, the approval of the Amalgamation Agreement by Alea Shareholders at the Special General Meeting and approvals of the change of control contemplated by the Acquisition by insurance regulatory authorities in the State of New York, USA, Bermuda, the United Kingdom, Australia and Switzerland. Regulatory clearance from the German Federal Cartel Office will also need to be obtained.”
Complete details of the earnings statement and the FIN Acquisition may be obtained on the Group’s web site at: http://www.aleagroup.com.