DE Shaw Group, the New York hedge fund giant, today announced an agreement to acquire James River Group, an insurance holding company that went public less than two years ago, for $575 million (€431 million).
The announcement comes shortly after the firm hired Bryan Martin and Richard Aube, former JPMorgan Partners private equity professionals, to lead a new US private equity programme. In February, the firm hired Liang Meng as head of a new Greater China private equity division at DE Shaw. Meng was a former co-head of China investment banking for JP Morgan Securities.
The acquisition of River Group was unanimously approved by the company’s board of directors. The $34.50 price-per-share offer did not represent any premium over yesterday’s closing price. Many recent take-private offers have been valued at significant premiums to the company’s pre-announcement market capitalisations.
“We are pleased to have entered into a transaction that will offer liquidity to all of our stockholders at a price which is over 90 percent above the price at which our common stock was first offered to the public a little less than two years ago,” said Dick Wright, chairman of the board of James River, in a statement. “
The entity that will acquire James River is based in Bermuda. James River is based in Chapel Hill, North Carolina.
DE Shaw has roughly $30 billion in investment capital. The firm was founded in 1988 by David Shaw, who now is only marginally involved in the day-to-day management of the firm. DE Shaw’s global private equity activities are overseen by Louis Salkind, a vice chairman of DE Shaw.