DE Shaw backs $575m take-private(3)

The hedge-fund giant has kick-started its new US private equity platform with the announced privatisation of insurance company James River.

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.