HAMILTON, Bermuda, Aug. 15, 2019 (GLOBE NEWSWIRE) -- Syncora Holdings Ltd. ("Syncora") today announced the signing of an agreement to sell Syncora Guarantee Inc. ("SGI"), its wholly owned, New York financial guarantee insurance subsidiary, to Star Insurance Holdings LLC ("Star Insurance"), an entity organized by GoldenTree Asset Management LP ("GoldenTree") on behalf of GoldenTree's managed funds and accounts, for $392.5 million in cash, subject to adjustment. The cash purchase price for SGI represents a premium to the closing share price of Syncora's common stock on March 1, 2019, the trading day prior to the announcement of the process. In addition to the cash purchase price, after the closing of the sale, Syncora will have cash in the amount of $32 million and specified non-core assets currently held at SGI, including certain non-cash assets of Pike Pointe Holdings, LLC and an 80% interest in Swap Financial Group LLC. The closing of the transaction remains subject to customary conditions, including approval by the New York Department of Financial Services, and clearance under the Hart-Scott-Rodino Antitrust Improvements Act, and is expected to take place by the end of the fourth quarter of 2019 or during the first quarter of 2020. The transaction does not require the approval of Syncora's shareholders.
As previously announced on March 4, 2019, Syncora, working with its financial advisor, Moelis & Company LLC, and its US legal advisor, Debevoise & Plimpton LLP, commenced a formal review process to explore and evaluate strategic alternatives which included the sale of Syncora or SGI.
The process included solicitations of interest from dozens of potential acquirers, executed non-disclosure agreements with 20 potential acquirers and bids from five interested parties. After several rounds of bidding, the Board of Directors (the "Board") of Syncora selected GoldenTree's bid as the most attractive to Syncora.
Frederick Hnat, CEO and President of Syncora, remarked that "this agreement is the culmination of years of hard work and focus on our core strategies of risk reduction, asset monetization and enhancing value for our shareholders. We are very pleased with the terms of the agreement with Star Insurance, an entity organized by GoldenTree, one of the largest independent asset managers focused on credit, and believe that it helps accomplish our long stated goal of optimizing shareholder value and returning capital to shareholders."
The financial effects of this agreement and the anticipated method and timing of distributions to shareholders are expected to be disclosed at a later date.
The agreement with Star Insurance allows Syncora to consider other acquisition proposals received prior to 5:00 pm Eastern time on September 13, 2019 that Syncora determines in good faith are or could reasonably be expected to lead to a transaction superior to the current transaction with Star Insurance, as more fully set forth in the definitive agreement related to the sale. If a superior proposal is received, Syncora has the right to terminate the agreement pursuant to the terms and conditions thereof and pay Star Insurance a termination fee of $15,700,000 plus reimbursement of Star Insurance's reasonable expenses, up to $3,000,000. For additional detail, please see the definitive stock purchase agreement related to the sale, which is available on Syncora's website at www.syncora.com.
Syncora also announced that the Board approved the phasing out of staggered board terms beginning with Syncora's 2019 Annual General Meeting (the "2019 AGM"). If this change is approved by the shareholders at the 2019 AGM, directors elected at the 2019 AGM will serve for a one-year term.
It is expected that the 2019 AGM will occur after the sale of SGI has closed. Syncora will announce the date of the 2019 AGM once that date is set by the Board.
Sidley Austin LLP and Sheppard, Mullin, Richter & Hampton LLP acted as legal advisors to GoldenTree. Goldin Associates LLC acted as financial advisor to GoldenTree.
About Syncora Holdings Ltd.
Syncora Holdings Ltd. (OTC:SYCRF) is a Bermuda-domiciled holding company. Syncora Guarantee Inc. is a wholly owned subsidiary of Syncora Holdings Ltd. For additional information, please visit www.syncora.com.
Syncora Holdings Ltd.
About GoldenTree Asset Management LP
GoldenTree is an employee-owned, global asset management firm that specializes in opportunities across the credit universe in sectors such as high yield bonds, leveraged loans, distressed debt, structured products, emerging markets, private equity and credit-themed equities. GoldenTree was founded in 2000 and is one of the largest independent asset managers focused on global credit. GoldenTree manages over $30 billion for institutional investors including leading public and corporate pensions.
Important Information and Forward Looking Statements
This press release contains statements about future results, plans and events that may constitute "forward-looking" statements. We caution you that the forward-looking information presented in this press release is not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking information contained in this press release. In particular, we caution you that there can be no assurance as to when or if the sale of SGI to Star Insurance will be consummated. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "plan," "seek," "comfortable with," "will," "expect," "intend," "estimate," "anticipate," "believe" or "continue" or the negative thereof or variations thereon or similar terminology. Forward-looking statements, including those concerning the sale of SGI to Star Insurance are subject to a number of risks and uncertainties, many of which are beyond Syncora's control. These risks and uncertainties include, but are not limited to, the factors described in Syncora's historical filings with the NYDFS, and in Syncora's and Syncora Guarantee Inc.'s GAAP and statutory financial statements, as applicable, posted on its website at www.syncora.com, as well as the need for approval of the sale of SGI to Star Insurance by the NYDFS. Readers are cautioned not to place undue reliance on forward-looking statements which speak only as of the date they are made. Syncora does not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statements are made.
Source: Syncora Holdings Ltd.