Investor Daniel Loeb butts heads with fellow investors over proposal to transform London vehicle into a Cayman Islands insurance company.
In the heart of London's financial district, a significant corporate transformation is underway. Daniel Loeb, a renowned billionaire activist, is attempting to transform his London-listed company, Third Point Investors Limited (TPIL), into a Cayman Islands-based reinsurer. However, the proposed takeover has faced opposition and controversy.
The proposed takeover involves a reverse takeover of Malibu Life Reinsurance (Malibu Re). Under the new Financial Conduct Authority's (FCA) rules for related-party transactions, Loeb will be permitted to vote his 25% stake in TPIL. The transformed TPIL would focus on the fast-growing US market for fixed annuities.
The board of TPIL has irrevocable support from shareholders holding 45% of the company's voting rights to back the deal. However, a group of TPIL investors has voiced their dissent, arguing that they have been forced to fund Loeb's reinsurance ambitions against their will.
The investor group points to "the close personal and commercial relationships" between Jefferies, the investment bank, and Third Point as a potential conflict of interest. Jefferies, through its CEO, Handler, declined to comment on the matter.
The dissenting shareholders view the transaction as a significant corporate restructuring (a reverse takeover) that demands shareholder approval, fearing insufficient consultation or protection of minority interests. This perspective likely stems from the typical shareholder apprehension in major restructuring or ownership changes.
The new UK governance rules require a Multilateral Trading Facility (MTF) admission prospectus for all IPOs and reverse takeovers on AIM. This change introduces greater regulatory scrutiny and formalization compared to previous practices, impacting Malibu Life Reinsurance's proposed reverse takeover of Third Point Investors Limited.
Despite a July offer that sweetened the deal, the proposed takeover has been met with a backlash. One person involved in the deal stated that negative media coverage of the fight has become a cautionary tale against listing in London. The investor group has expressed concerns about the deal being risky and much of the upside potentially benefiting Loeb's New York hedge fund.
In response, Dimitri Goulandris, chair of the TPIL strategy committee, described the group's claims of poor governance and undisclosed conflicts of interest as "fantastical". The board's "fully independent strategy committee" had reviewed a wide range of business and structural options before making its recommendation.
The shareholder vote on the Malibu Re takeover is expected to be announced following a meeting on Thursday. The new UK governance rules aim to increase transparency and shareholder protections in significant corporate transactions, underscoring the evolving regulatory environment.
- Daniel Loeb's plans to transform Third Point Investors Limited (TPIL) into a reinsurer, through a reverse takeover of Malibu Life Reinsurance (Malibu Re), involve a significant amount of business and investment in the fast-growing US market for fixed annuities.
- The proposed takeover has been met with controversy, as a group of TPIL investors argue that they have been forced to fund Loeb's reinsurance ambitions against their will, potentially leading to a conflict of interest involving Jefferies, the investment bank.
- The new UK governance rules require a Multilateral Trading Facility (MTF) admission prospectus for all IPOs and reverse takeovers on AIM, introducing greater regulatory scrutiny and formalization compared to previous practices, which may impact Malibu Life Reinsurance's proposed reverse takeover of Third Point Investors Limited.
