Argo secures prelim takeover/investment bids; due diligence underway

Bermuda-based global re/insurer Argo Group has received preliminary non-binding take-over bids from would-be investors who have proceeded to start due diligence of the struggling insurer.

“Select bidders” have “have put forward preliminary, non-binding proposals” after Argo reached out to more than 80 potential investors as part of its review of strategic options, management told shareholders.

Those early bidders are now running due diligence, including via meetings with Argo management, and “the next step is for interested bidders to put forward proposals with any financing commitments and binding documentation.”

Of the 80+ potential investors to whom Argo’s advisors initially reached out, Argo claims a “balanced mix of financial sponsors and strategic buyers” plus presence of “select international players with interest in US platforms.”

Argo gave no similar hints on the make-up of the eventual pool of bidders.

Argo takes the bids as an endorsement of its turn-around plan for the group.

“The parties have found the latest developments and progress of transformation initiatives impressive, acknowledging that Argo is a healthier, streamlined business,” management said in its letter and presentation to shareholders.

Comments come as part of an onslaught of proxy materials ahead of a contested shareholder meeting slated for December 15.

Management has promoted its turn-around programme and ongoing review of strategic options as it seeks to shut-down a bid by minority shareholders to place two independent members on the Argo board. Capital Returns Master is leading that foray.

The board defends its record on steps to date to streamline the portfolio focus on profitable lines, bolster finances through several strategic asset sales, re-underwriting core US specialty business and cutting costs.

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