Newly listed buyout firm Fortress has reportedly had its bid for reinsurer Alea threatened by minority shareholders, who believe the company’s $320 million bid (€236 million) undervalues the company.
According to the Financial Times, hedge funds Polygon, Odey Asset Management and Henderson Global Investors believe the bid undervalues the business and are attempting to force Fortress to increase its agreed 93 pence per share bid.
New York-based Fortress agreed the deal on April 4. The price was a 15 percent premium over the reinsurer’s average price for the past six months.
Polygon and Fortress went head to head last year, when the hedge fund blocked the investment group’s attempt to buy telent, the rump of telecoms business Marconi.
Alea has struggled since its stock market flotation, suffering record losses of $178.9 million in 2005 after storms across the US coasts knocked its profits. It also lost its chief executive Mark Ricciardelli after a series of profit warnings.
At 1.29 GMT, Alea’s shares were up 1.35 percent at 94 pence.