Arch Capital Group has planned a secondary public offering to raise some of the cash for its
The Hamilton, Bermuda-based company will offer 18 million depositary shares, which each represents a one-thousandth interest in a 5.25% non-cumulative preferred share. Arch has priced the public offering at $25 per depositary share, for a total consideration of $450 million.
Arch has also provided the offering's underwriters with a 30-day option to purchase up to an additional 2.7 million depositary shares. The offering is expected to close Sept. 29, pending customary closing conditions.
On or after Sept. 29, 2021, the company can redeem any portion of the preferred shares at a price equal to $25,000 per preferred share plus declared and unpaid dividends, if any.
"The company intends to use the net proceeds of this offering to fund a portion of the cash consideration for its acquisition of United Guaranty Corp. and AIG United Guaranty Insurance (Asia) Limited from their current owner, American International Group Inc. (UGC Acquisition), to pay related costs and expenses and for general corporate purposes," Arch said in a news release. "The closing of this offering is not contingent on the closing of the UGC Acquisition."
