UNITED STATES
	SECURITIES AND EXCHANGE COMMISSION
	Washington, D.C. 20549
	SCHEDULE 13D

 

Under the Securities Exchange Act of 1934
(Amendment No. 1)*

 

(Name of Issuer)

 

(Title of Class of Securities)

 

(CUSIP Number)

 

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

 

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box o.

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

 

 

(1)  Calculated based on the 9,598,808 aggregate number of common shares stated to be outstanding on May 1, 2013 by the Issuer in the Issuer’s Form 10-Q filed with the Securities and Exchange Commission on May 10, 2013.

 

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Introductory Statement

 

This Amendment No. 1 (this “Amendment”) amends the Schedule 13D initially filed by Catalina Holdings (Bermuda) Ltd (“Catalina”) on March 5, 2013 (the “Original Filing”), relating to shares of the Common Stock, $0.01 par value per share (the “Common Shares”), of American Safety Insurance Holdings, Ltd. (“ASI”).  Information reported in the Original Filing remains in effect except to the extent that it is amended or superseded by information contained in this Amendment.

 

Item 4.                       Purpose of Transaction

 

The disclosure in Item 4 of the Original Filing is hereby supplemented by adding the following:

 

Following the filing of the Original Filing, on May 30, 2013, Catalina, through its financial advisor, RBC Capital Markets, LLC submitted a letter to ASI’s financial advisor, Bank of America Merrill Lynch, indicating that it was willing to acquire ASI for a value of $29.00 per share in cash.  Subsequently, on July 29, 2013, Catalina sent a letter to the board of directors of ASI, offering a price of $29.75 per share in cash to acquire ASI (the “Revised Offer Letter”). A copy of the Revised Offer Letter is attached hereto as Exhibit 99.1.

 

Item 7.                       Material to be Filed as Exhibits

 

Item 7 of the Original Filing is hereby supplemented by adding the following:

 

Exhibit 99.1  Letter dated July 29, 2013 from Catalina to the board of directors of ASI.

 

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SIGNATURES

 

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

Date: July 29, 2013

 

 

		Catalina Holdings (Bermuda) Ltd.
		By:	/s/ Campbell McBeath
			Name: Campbell McBeath
			Title: Group Treasurer

 

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INDEX TO EXHIBITS

 

Exhibit 99.1                                                                              Letter dated July 29, 2013 from Catalina to the board of directors of ASI.

 

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Exhibit 99.1

 

	Cumberland House
	1 Victoria Street, 7th Floor,
	Hamilton HM11, Bermuda
	Tel +1 441 494 6350
	Fax +1 441 494 6390

 

July 29, 2013

 

The Board of Directors

American Safety Insurance Holdings, Ltd.

31 Queen Street, 2nd Floor
Hamilton, Bermuda

 

Attn:       Stephen R. Crim

 

BY EMAIL

 

Dear Stephen:

 

We are writing to express the continued interest of Catalina Holdings (Bermuda) Ltd (“Catalina”) in the acquisition of American Safety Insurance Holdings, Ltd. (“ASI” or the “Company”) (the “Transaction”).  As you are aware, we have devoted substantial resources to this Transaction, and, as we stated in our May 30, 2013 proposal letter, we have completed our due diligence, and have committed, drawable financing in place.  This Transaction is of significant interest to Catalina and we are prepared to commit the resources at our disposal to acquire ASI.

 

Purchase Price:

 

To acquire 100% of the capital stock of ASI that we do not already own, we will pay $29.75 per fully diluted share.  This equates to a total consideration of $311.6 million.

 

We have assumed that the outstanding common and restricted stock equals 9,628,101 and have also taken into account the options outstanding (497,702 at a weighted average strike price of $12.94) and unvested restricted stock units (568,026) for purposes of making our offer.

 

Merger Agreement:

 

As outlined in the Proxy Statement, our revised markup of the Agreement and Plan of Merger (“Merger Agreement”) addressed key points discussed with Sherman & Sterling.  We believe the draft Merger Agreement is in largely agreed form and we are ready to sign it.  Alternatively, we are prepared to enter into the Merger Agreement on terms substantially similar to the Merger Agreement entered into with Fairfax Financial Holdings Limited (“Fairfax”).

 

Consideration:

 

We confirm that the entire purchase price will be paid in cash at closing.

 

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Funding for the purchase price will be met from equity at hand on Catalina’s balance sheet and senior bank debt financing provided by Royal Bank of Canada (“RBC”) and Lloyds TSB Bank plc (“Lloyds”).  RBC Capital Markets, LLC (“RBCCM”) is acting as our exclusive financial advisor.  Our bank financing is committed and immediately drawable.

 

Reasons why Catalina’s offer is Superior (as defined in the Merger Agreement):

 

·                  Catalina proposes to acquire ASI at a higher per share price than Fairfax.

 

·                  Unlike Fairfax, Catalina’s mark up of the Merger Agreement does not allow for termination if the liquidation of all non-cash investments held by ASI has not been completed in accordance with the Merger Agreement.

 

·                  The conditions to completion of the Merger are the same.

 

·                  ASI determined that the transaction with Fairfax had greater certainty of being approved by the applicable regulators in a shorter time period.  We are surprised by this conclusion as Catalina has a history of receiving change of control approval from Bermudian and US insurance regulators without unnecessary delay in all previous transactions.  We do not believe ASI or its advisors can have information contrary to our experience.

 

Expiry:

 

The terms of this letter will remain open until the earlier of August 5, 2013 at 5:00 p.m. Eastern or the day when it is accepted by ASI or any representative thereof (“Termination Date”).  If the offer has not been accepted by the Termination Date, no terms included in our proposal will be valid unless otherwise communicated by Catalina.

 

We would like to discuss our proposal with the independent directors of ASI’s board at the earliest opportunity to agree how we move our proposal to a signed Merger Agreement.

 

I look forward to hearing from you.

 

Yours sincerely,

 

 

/s/ Chris Fagan

Chris Fagan

Chief Executive

Catalina Holdings (Bermuda) Ltd

 

Catalina Holdings (Bermuda) Ltd (“Catalina”) is a long term consolidator in the non-life insurance/reinsurance run-off sector.  Catalina was established in 2005 to focus solely on the acquisition and management of non-life insurance/reinsurance companies in run-off.  Our shareholders include substantial financial institutions including Ontario Teachers Pension Plan, Caisse de Depot et Placement du Quebec, Nomura and RBS Special Opportunities.  Since its foundation, Catalina has made over $880 million of acquisitions in the non-life insurance and reinsurance run-off sector.  Catalina has received change of control approvals from Bermudian, Irish, Swiss, UK (FSA and Lloyd’s) and various US state insurance regulators in prior transactions.  We currently maintain offices in Bermuda, Colorado, London, Dublin, New York and Pfaffikon, Switzerland.  As of March 31, 2013, Catalina had total assets of $1.3 billion and shareholders’ equity of $437 million.  For further details about Catalina’s acquisitions or its management team please refer to www.catalinare.com.

 

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