We are pleased to present the latest edition of our Bermuda Public Companies Update which features a summary of significant transactions involving Bermuda public companies listed on the NYSE and Nasdaq for the period of Q4 2015 through Q1 2016.
Despite the unsettled state of the capital markets that have characterized the last six months, there have been significant positive developments that have consolidated Bermuda's position as a leading domicile for public companies on the principal US stock exchanges. In the insurance sector, Bermuda achieved Solvency II equivalence which has prompted global insurer XL Group plc to announce that it will move its corporate home from Ireland to Bermuda. Although there were no new Bermuda company IPOs in the US markets during the period, TAL International Group, Inc. (NYSE:TAL) (a Delaware corporation) announced a merger transaction that is expected to result in the listing of a new Bermuda holding company on the NYSE. Markit Ltd. (Nasdaq:MRKT) has also announced a US$13 billion merger of equals with IHS Inc. (NYSE:IHS) which will result in the combined group Bermuda holding company as the listed company. More details of these highlighted transactions can be found in our feature article on page three of this update.
This edition also includes statistical information about the size of the Bermuda public companies market and Conyers' position as the leading advisor in this sector. As always, we hope that this update will be of interest to our legal colleagues, clients and Bermuda market followers.
- Axovant Sciences Ltd. (NYSE:AXON) acquired global rights to Nelotanserin from Roivant Sciences Ltd. for US$4.8 million. (November)
- Axalta Coating Systems Ltd. (NYSE:AXTA) acquired ChemSpec USA Inc. from Chemical Specialities Limited for an undisclosed sum. (November)
- Travelport Worldwide Limited (NYSE:TVPT) completed an underwritten public offering of 10,000,000 common shares, of which 850,000 shares were offered and sold by Travelport and 9,150,000 shares were offered and sold by selling shareholders, at US$14.16 per share. Travelport received approximately US$12 million of gross proceeds from the offering. (November)
- Nordic American Tankers Limited (NYSE:NAT) acquired an additional 6.5% stake in Nordic American Offshore Ltd. (NYSE:NAO) for US$9.5 million. (November)
- Endurance Specialty Holdings Ltd. (NYSE:ENH) completed a US$200 million Fixed Income Offering of 8,000,000 depositary shares each representing a 1/1,000th interest in a share of 6.35% non-cumulative preferred shares, Series C. (November)
- Triton Container International Limited entered into a definitive agreement with TAL International Group, Inc. (NYSE:TAL) for an all-stock merger of equals. The new holding company, Triton International Limited, will be domiciled in Bermuda and is expected to be listed on the NYSE. (November)
- NXP Semiconductors NV (NasdaqGS:NXPI) completed the acquisition of Freescale Semiconductor Ltd. (NYSE:FSL) from a consortium of sellers for approximately US$11.6 billion. (December)
- Frontline Ltd. (NYSE:FRO) and Frontline 2012 Ltd. (OTCNO:FRNT) completed their merger with Frontline 2012 becoming a wholly-owned subsidiary of Frontline Ltd. (December)
- Kinder Morgan, Inc. (NYSE:KMI) and Brookfield Infrastructure Partners L.P. (NYSE:BIP) completed the acquisition of the remaining 53% stake in Natural Gas Pipeline Company of America LLC from SteelRiver Infrastructure Partners LP and other shareholders for approximately US$240 million. (December)
- Brookfield Property Partners L.P. (NYSE:BPY) and Korea Investment Corporation completed the acquisition of Quartier Potsdamer Platz from SEB Immoinvest (managed by Savills Fund Management GmbH) for €1.3 billion. (January)
- Hydro One Inc. entered into an agreement to acquire Great Lakes Power Transmission LP from Brookfield Infrastructure Partners L.P. (NYSE:BIP) for approximately CA$370 million. (January)
- Invesco Ltd. (NYSE:IVZ) acquired financial technology firm Jemstep Inc. for an undisclosed sum. (January)
- Aspen Insurance Holdings Ltd. (NYSE:AHL) acquired Agrilogic Insurance Services, LLC for an undisclosed sum. (January)
- Sumitomo Life Insurance Company completed the acquisition of Symetra Financial Corporation (NYSE:SYA) from White Mountains Insurance Group, Ltd. (NYSE:WTM), Berkshire Hathaway Inc. (NYSE:BRK.A) and others for approximately US$3.7 billion in cash. (January)
- Brookfield Property Partners L.P. (NYSE:BPY) entered into a contract to sell a 50% interest in World Square Shopping Centre in Sydney for approximately AU$280 million. (February)
- Lincoln Property Company and The Goldman Sachs Group, Inc., Investment Arm, acquired Gainey Center II from Invesco Ltd. (NYSE:IVZ) for US$35.3 million. (March)
- Travelport Worldwide Limited (NYSE:TVPT) completed a US$141.6 million secondary offering by selling shareholders of approximately 10,500,000 common shares. (March)
- Aircastle Limited (NYSE:AYR) completed a US$500 million offering of 5% senior notes due 2023. Aircastle plans to use the proceeds for general corporate purposes, which may include the acquisition of aircraft or the refinancing of its existing indebtedness. (March)
- Exor S.p.A. (BIT:EXO) completed its acquisition of PartnerRe Ltd. (NYSE:PRE) from Stone Point Capital LLC and other shareholders for approximately US$6.9 billion in cash. (March)
- Travelport Worldwide Limited (NYSE:TVPT) acquired its third party distributor, Galileo Japan, for an undisclosed sum. (April)
- Brookfield Property Partners L.P. (NYSE:BPY) and AustralianSuper Pty Ltd acquired an office building in Boston's financial district from Broder Properties, LLC for US$33 million. (April)
- Brookfield Property Partners L.P. (NYSE:BPY) agreed to acquire a 1.2 million square foot Maryland portfolio from Washington Real Estate Investment Trust (NYSE:WRE) for US$240 million. (April)
- Brookfield Property Partners L.P. (NYSE:BPY) and China Life Insurance (Group) Company Limited completed the acquisition of Aldgate Tower for approximately for £350 million. (April)
- Invesco Ltd. (NYSE:IVZ) completed the acquisition of the remaining 51% stake in Religare Asset Management Company Private Limited from Religare Securities Limited for an undisclosed sum. (April)
- Invesco Ltd. (NYSE:IVZ) and Simon Property Group Inc. (NYSE:SPG) completed the acquisition of The Shops at Crystals in Las Vegas from CityCenter Holdings, LLC for US$1.1 billion. (April)
- Maiden Holdings, Ltd. (NasdaqGS:MHLD) completed a US$150 million underwritten public offering of 7.12% non-cumulative preference shares, Series C, with a liquidation preference of US$25.00 per share. The company expects to use the net proceeds from the offering for continued support and development of its reinsurance business and for other general corporate purposes, which may include acquisitions, working capital and repaying outstanding indebtedness, including Maiden Holdings North America, Ltd.'s outstanding US$107.5 million aggregate principal amount of 8.25% senior notes due 2041. (November)
- Norwegian Cruise Line Holdings Ltd (NasdaqGS:NCLH) completed a US$596 million secondary offering of approximately 10,300,000 ordinary shares. (December)
- Golden Ocean Group Limited (NasdaqGS:GOGL) completed a NOK1.7 billion secondary offering of approximately 13,500,000 ordinary shares. (February)
- Markit Ltd. (NasdaqGS:MRKT) acquired the credit default swap pricing service of Fitch Solutions, Inc. for an undisclosed sum. (March)
- Markit Ltd. (NasdaqGS:MRKT) signed a definitive agreement to merge with IHS Inc. (NYSE:IHS) in a deal valued at US$13 billion. (March)
- Helen of Troy Limited (NasdaqGS:HELE) completed the acquisition of membership units of Steel Technology, LLC for approximately US$210 million. (March)
- VimpelCom Ltd. (NasdaqGS:VIP) acquired a 50.25% stake in Eurus Holding B.V. for an undisclosed sum. (March)
its Position as a Leading Domicile for Public
Since our last publication significant deals and developments have been announced that have bolstered Bermuda's reputation as a leading jurisdiction for public companies. Of particular significance for insurance groups, Bermuda has achieved full Solvency II equivalence. The Island is second only to Switzerland in receiving this endorsement. This milestone means that the regulatory, supervisory and monitoring roles of the Bermuda Monetary Authority ("BMA") are considered in line with those of European regulators. It allows Bermuda insurers to compete for EU business on an equal footing with EU-based insurers.
A number of insurance groups currently have a Bermuda company as their top-level holding company, but the enhanced regulatory status of Solvency II equivalence makes the jurisdiction even more attractive. Indeed, it is seen as a major benefit by global insurer XL Group plc ("XL"), which, subject to shareholder approval, plans to undergo a scheme of arrangement to replace its top-level Irish holding company with a Bermuda exempted company. In noting it would be a natural step for XL, which has its largest operating subsidiary in Bermuda where the group has had a presence for 30 years, XL's CEO Michael S. McGavick said, "Following the Catlin transaction, and with the recent determination of full Solvency II equivalence for Bermuda, it has been concluded that the BMA is best situated to serve as XL's group-wide supervisor and to approve XL's internal capital model".
In the M&A sector, there have been two merger announcements, in particular, that have underlined market confidence in Bermuda public companies. On 9 November 2015, TAL International Group, Inc. (a Delaware corporation - NYSE:TAL) and Triton Container International Limited (a privately held Bermuda company) announced they had entered into an all-stock merger of equals transaction providing for the combination of TAL and Triton under a new Bermuda holding company named Triton International Limited. This will create the world's largest lessor of intermodal freight containers and is expected to be listed on the NYSE. The transaction will feature two mergers and TAL stockholders will hold approximately 45%, while Triton shareholders will hold approximately 55% of the new holding company.
The second announcement was by IHS Inc. (a Delaware corporation - NYSE:IHS) and Markit Ltd. (a Bermuda company - Nasdaq:MRKT) on 21 March 2016, following the signing of a definitive agreement under which these groups will combine in a US$13 billion all-share merger of equals to create a global leader in critical information, analytics and solutions. The transaction will feature a merger under Delaware law with IHS becoming a subsidiary of Markit (to be renamed IHS Markit Ltd). IHS shareholders will own approximately 57% and Markit shareholders will own approximately 43% of IHS Markit Ltd. As with the TAL-Triton deal, notwithstanding the established Delaware connection, the parties have chosen for the combined group to have a Bermuda holding company – thus confirming Bermuda's position as a leader for public companies with global operations.
Upon consummation of the above transactions, the market capitalization of Bermuda companies listed on the principal US exchanges will increase from approximately US$200 billion to approximately US$218 billion and the number of Bermuda companies listed on these exchanges will increase to 66.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.