No bidders have come forward to interrupt efforts by the shareholders that control Scottish Re Group Ltd. to buy out the reinsurer’s remaining ordinary shareholders.
Scottish Re, Hamilton, Bermuda (Pink Sheets:SKRRF.pk), is urging the ordinary shareholder to vote to let the controlling shareholders complete the buyout.
Scottish Re, a life reinsurer with stock that once traded on the New York Stock Exchange, ran into problems with claims rates and investment performance. Affiliates of Cerberus Capital Management L.P., New York, and Massachusetts Mutual Life Insurance Company, Springfield, Mass., now control about 69% of the company’s voting shares.
The controlling shareholders announced in April that they would pay about $21 million, or 30 cents per share, to buy out the ordinary shareholders. Before Scottish Re announced the deal, the company’s stock had been selling for about 16 cents per share. Shares are now selling for about 28 cents to 30 cents per share.
The controlling shareholders must get permission from the shareholders and a group of “disinterested directors” to complete the buyout. Under the terms of the deal agreement, Scottish Re had the right to solicit other offers during a 45-day “go shop” period that started April 15 and ended Monday. An investment bank helped Scottish Re contact 21 potential buyers, Scottish Re says.
“Only three of the contacted parties chose to pursue due diligence investigations of the company, and no party submitted an alternative proposal for the acquisition of the ordinary shares,” the company says.