- Written communication by the subject company relating to a third party tender offer (SC14D9C)
September 21 2009 - 8:21AM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9
Solicitation/Recommendation Statement under Section 14(d)(4)
of the Securities Exchange Act of 1934
ODYSSEY RE HOLDINGS CORP.
(Name of Subject Company)
ODYSSEY RE HOLDINGS CORP.
(Names of Person(s) Filing Statement)
Common Stock, $0.01 Par Value Per Share
(Title of Class of Securities)
67612W108
(CUSIP Number of Class of Securities)
Donald L. Smith
Senior Vice President, General Counsel
and Corporate Secretary
Odyssey Re Holdings Corp.
300 First Stamford Place
Stamford, Connecticut 06902
(203) 977-8024
(Name, Address and Telephone Number of Person Authorized to Receive
Notice and Communications on Behalf of the Person(s) Filing Statement)
With a copy to:
Peter J. Gordon, Esq.
Simpson Thacher & Bartlett LLP
425 Lexington Ave
New York, NY 10017-3754
(212) 455-2605
þ
Check the box if the filing relates solely to preliminary communications made before the
commencement of a tender offer.
September 18, 2009
FAIRFAX TO COMMENCE TENDER OFFER FOR MINORITY STAKE IN ODYSSEY RE
FOR $65 PER SHARE IN CASH
ODYSSEY RE BOARD OF DIRECTORS UNANIMOUSLY RESOLVES TO RECOMMEND THAT MINORITY
STOCKHOLDERS TENDER THEIR SHARES TO FAIRFAXS OFFER
(
Note
: All dollar amounts in this press release are expressed in U.S. dollars.)
Fairfax Financial Holdings Limited (TSX and NYSE: FFH) and Odyssey Re Holdings Corp. (NYSE: ORH)
announced today that they have signed a merger agreement pursuant to which Fairfax will, as soon as
practicable, commence a tender offer to acquire all of the outstanding shares of common stock of
Odyssey Re that Fairfax does not currently own for $65 in cash per share, representing total cash
consideration of approximately $1.0 billion. The Board of Directors of Odyssey Re, following the
recommendation of the Special Committee of Independent Directors of its Board formed to review
Fairfaxs proposal, has unanimously resolved to recommend that Odyssey Res minority stockholders
tender their shares in the Fairfax offer. Marshfield Associates, Inc., which currently has
management and control over approximately 2.7 million shares representing the largest block held by
Odyssey Res minority stockholders, has agreed to tender the shares over which it has control to
Fairfaxs $65 per share offer.
The price of $65 per share in cash represents a 29.8% premium over the closing price on September
4, 2009 (the date on which Fairfax publicly announced that it was proposing to acquire all
outstanding shares of common stock of Odyssey Re that Fairfax does not currently own) and a 33.4%
premium over the 30-day average closing price for the period ending on September 4, 2009. Based on
Odyssey Res initial public offering price of $18.00 per share in June 2001, the purchase price
represents a compounded annual return of 17.3% through the date of the merger agreement.
Prem Watsa, Chairman and CEO of Fairfax, said: We believe that our increased offer price of $65
per share, which is well above any price at which Odyssey Re shares have ever traded, represents a
very attractive price for Odyssey Res minority stockholders. We are very gratified that we have
the recommendation of Odyssey Res Special Committee and look forward to working together to
complete the transaction. Mr. Watsa added, Following the successful completion of our offer,
there will be no changes in Odyssey Res strategic or operating philosophy; under the excellent
leadership of Andy Barnard, President and CEO, Odyssey Re will continue to operate its business
exactly as it has always been run.
Andy Barnard, President and CEO of Odyssey Re said, We look forward to business as usual and
continuing with our vision of independent growth of our insurance and reinsurance platforms with
the ongoing support of Fairfax.
The Special Committee of Independent Directors is very pleased to have negotiated a transaction
with Fairfax that we believe is highly attractive and in the best interests of the minority
stockholders, said Patrick Kenny, Chairman of the Special Committee of Odyssey Re. I would like
to thank the other members of the Special Committee for their extensive commitment and effective
representation of Odyssey Res minority stockholders, and also to thank our financial and legal
advisors.
As soon as is practicable Fairfax, through a wholly-owned subsidiary, will commence a tender offer
for all of the outstanding shares of common stock of Odyssey Re that Fairfax does not currently
own, for $65 per share in cash. In addition to customary conditions, the offer will be irrevocably
subject to there having been validly tendered and not withdrawn a majority of the outstanding
Odyssey Re shares that are held by stockholders that are not affiliated with Odyssey Re (including
Fairfax and its subsidiaries and the directors and executive officers of each of Odyssey Re and
Fairfax). The offer will not be subject to a financing condition. Promptly following the offer,
Fairfax will consummate a second-step merger in accordance with the merger agreement pursuant to
which, subject to limited
exceptions, non-tendering holders of Odyssey Re common stock would be entitled to receive the price
per share paid by Fairfax in the offer. Following the purchase of shares in the tender offer and
subsequent merger, Odyssey Re would become an indirect subsidiary of Fairfax.
Fairfax intends to use the $983.0 million net proceeds from its previously completed public
offering of its subordinate voting shares, together with available cash on hand, to fully fund the
tender offer and subsequent merger. Following the successful completion of the tender offer and
subsequent merger, Fairfax expects to continue to have in excess of $1 billion in cash and
marketable securities at the holding company level.
BofA Merrill Lynch will be the Dealer Manager for the tender offer. BofA Merrill Lynch is also
serving as Fairfaxs financial advisor, and Shearman & Sterling LLP and Torys LLP are serving as
Fairfaxs legal counsel.
Sandler ONeill & Partners, L.P. is serving as the Odyssey Re Special Committees financial advisor
and Simpson Thacher & Bartlett LLP is serving as that committees legal counsel.
About Fairfax
Fairfax Financial Holdings Limited is a financial services holding company which, through its
subsidiaries, is engaged in property and casualty insurance and reinsurance and investment
management.
About Odyssey Re
Odyssey Re Holdings Corp. is a leading worldwide underwriter of property and casualty treaty and
facultative reinsurance, as well as specialty insurance. Odyssey Re operates through its
subsidiaries, Odyssey America Reinsurance Corporation, Hudson Insurance Company, Hudson Specialty
Insurance Company, Clearwater Insurance Company, Newline Underwriting Management Limited, Newline
Asia Services Pte. Ltd., and Newline Insurance Company Limited. The Company underwrites through
offices in the United States, London, Paris, Singapore, Toronto and Mexico City. Odyssey Re
Holdings Corp. is listed on the New York Stock Exchange under the symbol ORH.
Important Information
This announcement is for informational purposes only and does not constitute an offer to purchase
or a solicitation of an offer to sell Odyssey Re common stock. Odyssey Re stockholders are advised
to read the Tender Offer Statement on Schedule TO, the Offer to Purchase, Odyssey Res
Solicitation/Recommendation Statement on Schedule 14D-9 and other documents relating to the tender
offer that will be filed with the SEC and securities regulatory authorities in Canada because they
will contain important information. Anyone may obtain copies of these documents when available for
free at the SECs website at www.sec.gov and at the Canadian Securities Administrators website at
www.sedar.com, or by calling Innisfree M&A Incorporated, the Information Agent for the offer, at
1-888-750-5834.
This press release includes certain forward-looking statements. Such forward-looking statements are
subject to known and unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of Fairfax or Odyssey Re to be materially different from any
future results, performance or achievements expressed or implied by such forward-looking
statements. Such factors include, among others, the possibility that the Fairfax offer could be
withdrawn or not consummated, the outcome of any legal proceedings that may be instituted against
Odyssey Re and/or others relating to the proposed transaction, the effect of the announcement on
Odyssey Res customer relationships, operating results and business generally. Such factors also
include, but are not limited to, the risks and uncertainties described in Fairfaxs most recently
issued Annual Report, which is available at www.fairfax.ca, in Fairfaxs Base Shelf Prospectus
(under Risk Factors) filed with the SEC and securities regulatory authorities in Canada, which is
available at www.sec.gov and www.sedar.com, and in Odyssey Res filings including its Annual Report
on Form 10-K for the year ended December 31, 2008, which have been filed with the SEC and
securities regulatory authorities in Canada and are available at www.sec.gov and www.sedar.com.
Fairfax and Odyssey Re disclaim any intention or obligation to update or revise any forward-looking
statements, except as required by law.
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For further information contact:
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Greg Taylor, Fairfax Chief Financial Officer,
at (416) 367-4941
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Media Contact
: Paul Rivett, Fairfax Chief Legal Officer,
at (416) 367-4941
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For further information contact:
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R. Scott Donovan, Chief Financial Officer of Odyssey Re
at (203) 977-0199.
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