Private equity firm Apax Partners and Morgan Stanley Principal Investments, the US bank’s buyout arm, have increased their bid for North American insurance broker Hub International, reportedly in response to the submission of competing offers.
The buyout partners have raised their bid from $40 per share to $41.50 (€31) per share, according to a statement. A special committee and the board of directors for Chicago-based Hub have unanimously approved the deal, which was reportedly modified after other bidders emerged for the business.
Hub’s initial acquisition agreement with MSPI and Apax was announced in late February, and gave the insurance broker until March 19 to solicit alternative proposals.
Under the terms of the new agreement, Hub is obligated pay a 3 percent break up fee, equivalent to $53 million, should the transaction be terminated.
Morgan Stanley and Merrill Lynch will provide debt financing for the deal.
Hub has more than 4,000 employees located at 220 offices in 30 US states and four Canadian provinces. Its products include property, casualty, risk management, life and health insurance, as well as employee benefits, investment and wealth management.
The deal, which still requires approval from shareholders, regulators, and the Canadian courts, is expected to close by the end of the second quarter of 2007.