A Towering Bid For CastlePoint

August 2008 | M&A News Alert

On August 5 US insurer Tower Group announced that it will acquire Bermuda-based insurance holding-company CastlePoint Holdings for US$490mn, in a bid to to diversify its business and expand into high margin market segments. CastlePoint shareholders will receive 0.47 shares of Tower common stock and US$1.83 in cash for each CastlePoint share. Based on Tower's closing price, CastlePoint shareholders will receive US$12.68 per share in cash and stock. After the transaction, Tower's 2009 diluted earning-per-share is projected to be in a range between US$3.20 and US$3.40.

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