Third Point UK Investors Should Reject Reinsurance Deal, ISS Says

Shareholders of the UK investment trust run by Dan Loeb’s hedge fund Third Point should reject its plan to turn itself into a reinsurance company, according to ISS.

In its recommendation ahead of an Aug. 14 vote, the proxy adviser said the “deal will fundamentally change the investment case without giving minority shareholders, who are unwilling or unable to continue as shareholders in an operating, reinsurance business, an exit option at a fair price for their entire holdings.”

In May, Third Point Investors Ltd. agreed to buy Malibu Life Reinsurance, which was created and capitalized by its own investment manager. The proposed all-share combination is expected to create a London-listed reinsurance operating company, targeting a return on equity in the mid-teens by the end of 2027.

Third Point Investors had unveiled the plan following a strategy review backed by activist investor Boaz Weinstein.

Photograph: Tower Bridge in City of London; photo credit: Jason Alden/Bloomberg