Business
PROPOSED ACQUISITION OF CATHEDRAL CAPITAL LIMITED
PROPOSED ACQUISITION OF CATHEDRAL CAPITAL LIMITED.
About this update from Lancashire Holdings Limited
[{"type":"text","content":"\n \nRNS Number : 1148L Lancashire Holdings Limited 07 August 2013 \n \n\nLANCASHIRE HOLDINGS LIMITED\nPROPOSED ACQUISITION OF CATHEDRAL CAPITAL LIMITED\n\n7 August 2013For immediate release\nToday the board of directors (the \"Board\") of Lancashire Holdings Limited (\"Lancashire\" or the \"Company\") announces that it has entered into conditional agreements to acquire the entire issued and to be issued share capital of Cathedral Capital Limited (\"Cathedral\"), a privately owned Lloyd's insurer, from Alchemy Partners and Cathedral management, together with loan notes issued by Cathedral's subsidiary, Cathedral Capital (Investments) Limited for £266m, representing a multiple of 1.60x net tangible assets1 of Cathedral as at 31 March 2013 (the \"Acquisition\"). \nThe consideration for the Acquisition will be satisfied by the payment of £266 million in cash on completion to Alchemy Partners and the other Cathedral shareholders, funded through a combination of internally available cash resources and the net proceeds of the placing of up to 16,843,382 new common shares in the Company, representing approximately 9.99% of the Company's existing issued share capital, with institutional investors (the \"Placing\").\nThe Board believes that Lancashire's and Cathedral's existing businesses are a strong complementary fit and expects the Acquisition to bring material benefits to the enlarged Lancashire Group following the Acquisition (the \"Enlarged Group\"). The transaction represents a rare opportunity to acquire a high-quality Lloyd's business with a short-tail focus, strong business model fit and robust underwriting performance. The Enlarged Group will have access to an enhanced insurance and reinsurance platform and will benefit from direct participation in Lloyd's, the world's leading specialist insurance market. The Acquisition further provides Lancashire with flexibility to respond to the changing industry and market environment which increasingly requires multiple distribution capability. \nLancashire remains committed to its core strategic objectives. Cathedral is an underwriter-led and highly streamlined business with a track-record of excellence that is well aligned to Lancashire's strategic priority of \"underwriting comes first\" and nimble operating approach. The acquisition provides Lancashire with scale in existing li...