Validus (VR) to Acquire Flagstone Re (FSR) for Cash and Stock

August 30, 2012 8:02 AM EDT Send to a Friend
Validus Holdings, Ltd. (NYSE: VR) and Flagstone Reinsurance Holdings, S.A. (“Flagstone”) (NYSE: FSR) today announced that the boards of directors of both Validus and Flagstone have approved a definitive merger agreement pursuant to which Validus will acquire all of the issued and outstanding shares of Flagstone. Under the terms of the agreement, Flagstone shareholders will receive 0.1935 Validus voting common shares and $2.00 in cash for each Flagstone share. The transaction provides Flagstone shareholders with a 19.4% premium and $8.43 of value per share based on the closing share price for each of Validus and Flagstone as of Wednesday, August 29, 2012 and represents an aggregate equity value of $623.2 million. For United States tax purposes, the proposed transaction is intended to be tax-free to Flagstone shareholders with respect to the Validus voting common shares they receive.

Completion of the transaction, which is expected to occur in the fourth quarter of 2012, is subject to customary closing conditions, including obtaining regulatory approvals and the approval of Flagstone’s shareholders. The combined company will maintain Validus’ name, headquarters and executive management. Validus has obtained agreements from investment funds associated with Lightyear Capital and Trilantic Capital Partners, which collectively own approximately 22.5% of the outstanding Flagstone shares, to vote in favor of the transaction.

Deutsche Bank Securities Inc. acted as financial advisor to Validus and Skadden, Arps, Slate, Meagher & Flom LLP provided legal advice to Validus. Evercore Partners acted as financial advisor to Flagstone and Cravath, Swaine & Moore LLP provided legal advice to Flagstone.


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