SiriusPoint Co., Ltd. (SPNT) Shares Jump After Announcing Repurchase of Shares and Warrants from CM Bermuda Limited
In a significant development, SiriusPoint Co., Ltd., a specialty insurance company and reinsurer, announced that it will repurchase all shares of SiriusPoint common stock and warrants held by CM Bermuda Limited. The repurchase is valued at $733 million and marks a major step towards increasing the company’s financial stability and independence.
As part of the transaction, SiriusPoint will make two payments to CM Bermuda: an initial payment of $250 million immediately followed by a second tranche of $483 million on or before February 28, 2025. The company has funded the transaction using its existing capital, which has allowed it to maintain a strong pro forma Bermuda solvency capital ratio of 218% at the end of the third quarter.
The repurchase involves 45.7 million shares of common stock at $14.25 per share and 21 million warrants at $3.56 per warrant. The warrants have an exercise price of $11 per warrant. The transaction is expected to be significantly accretive to earnings per share, return on equity, and book value per share, positioning SiriusPoint for future growth and success.
SiriusPoint CEO Scott Egan emphasized the importance of the transaction, stating that the company’s financial position, driven by increasing profitability and performance, enables it to execute the repurchase. He noted that the transaction will position SiriusPoint well for the future, citing the company’s strong momentum and focus on creating value for all shareholders.
The news sent SiriusPoint’s shares soaring, with the stock up 13.8% to $16.16 as of last check on Tuesday.
Q: What is the value of the repurchase transaction?
A: The repurchase is valued at $733 million.
Q: Who will receive the payment for the repurchase?
A: The payment will be made to CM Bermuda Limited.
Q: How will SiriusPoint fund the transaction?
A: SiriusPoint will fund the transaction entirely using its existing capital.
Q: What is the expected impact of the transaction on SiriusPoint’s financials?
A: The transaction is expected to be significantly accretive to earnings per share, return on equity, and book value per share.
Q: What is SiriusPoint’s current financial position?
A: SiriusPoint’s pro forma Bermuda solvency capital ratio at the end of the third quarter remained strong at 218%.
Q: What is the timeline for the repurchase transaction?
A: The transaction is expected to close on or before February 28, 2025, with the second tranche of $483 million being paid at this time.
Conclusion:
The repurchase of shares and warrants from CM Bermuda Limited marks a significant development for SiriusPoint, demonstrating the company’s commitment to increasing its financial stability and independence. The transaction is expected to be significantly accretive to SiriusPoint’s financials, positioning the company well for future growth and success. With its strong momentum and focus on creating value for all shareholders, SiriusPoint is well-positioned to continue executing its strategy and delivering value to its stakeholders.
