SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13E‑3
(Amendment No. 3 )
RULE 13E‑3 TRANSACTION STATEMENT
UNDER SECTION 13(E) OF
THE SECURITIES EXCHANGE ACT OF 1934
WATFORD HOLDINGS LTD.
(Name of the Issuer)
Watford Holdings Ltd.
Arch Capital Group Ltd.
Arch Reinsurance Ltd.
Gulf Reinsurance Limited
Greysbridge Holdings Ltd.
Greysbridge Ltd.
Nicolas Papadopoulo
Maamoun Rajeh
Kelso Investment Associates X, L.P.
KEP X, LLC
KSN Fund X, L.P.
Warburg Pincus (Callisto) Global Growth (Cayman), L.P.
Warburg Pincus (Europa) Global Growth (Cayman), L.P.
Warburg Pincus Global Growth-B (Cayman), L.P.
Warburg Pincus Global Growth-E (Cayman), L.P.
Warburg Pincus Global Growth Partners (Cayman), L.P.
WP Global Growth Partners (Cayman), L.P.
Warburg Pincus Financial Sector (Cayman), L.P.
Warburg Pincus Financial Sector-D (Cayman), L.P.
Warburg Pincus Financial Sector Partners (Cayman), L.P.
WP Windstar Investments Ltd
(Names of Person(s) Filing Statement)
Common Shares, $0.01 Par Value Per Share
(Title of Class of Securities)
G94787 101
(CUSIP Number of Class of Securities)
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Watford Holdings Ltd.
Waterloo House, 1st Floor
100 Pitts Bay Road, Pembroke HM 08
Bermuda
Attention: Robert L. Hawley
Telephone: +1 441 278-3455
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Arch Capital Group Ltd.
Waterloo House, Ground Floor
100 Pitts Bay Road, Pembroke HM 08
Bermuda
Attention: Louis Petrillo
Telephone: +1 441 278-9250
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(Name, Address, and Telephone Numbers of Person Authorized to Receive Notices
and Communications on Behalf of the Persons Filing Statement)
With copies to:
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Gary D. Boss, Esq.
John A. Healy, Esq.
Per B. Chilstrom, Esq.
Clifford Chance US LLP
31 West 52nd Street
New York, New York 10019
Telephone: (212) 878‑8000
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Kimberly Petillo-Décossard, Esq.
Cahill Gordon & Reindel LLP
32 Old Slip
New York, New York 10005
Telephone: (212) 701‑3000
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This statement is filed in connection with (check the appropriate box):
| a. |
☒ The filing of solicitation materials or an information statement subject to Regulation 14A, Regulation 14C or Rule 13e‑3(c) under the Securities Exchange Act of 1934.
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| b. |
☐ The filing of a registration statement under the Securities Act of 1933.
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Check the following box if the soliciting materials or information statement referred to in checking box (a) are preliminary copies: ☐
Check the following box if the filing is a final amendment reporting the results of the transaction: ☐
Calculation of Filing Fee
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Transaction valuation*
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Amount of filing fee**
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$612,311,140.00
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$66,803.15
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| * |
For purposes of calculating the filing fee only, the transaction value was determined based upon the sum of: (1) 17,386,979 common shares issued and outstanding that are subject to the transaction (which is the difference between the
19,886,979 common shares that are issued and outstanding and the 2,500,000 common shares that are beneficially owned by Arch Capital Group Ltd. and/or its subsidiaries) multiplied by $35.00 per share; (2) 23,370 common shares issuable upon
the vesting or settlement of outstanding restricted share units (“RSUs”) subject to performance metrics (assuming the achievement of the applicable performance metrics at the target level of performance) multiplied by $35.00 per share; and
(3) 84,255 common shares issuable upon the vesting or settlement of outstanding RSUs not subject to performance metrics multiplied by $35.00 per share.
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| ** |
The filing fee was calculated in accordance with Rule 0‑11 under the Securities and Exchange Act of 1934, as amended, by multiplying the transaction value by 0.0001091.
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| ☒ |
Check box if any part of the fee is offset as provided by Rule 0‑11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous
filing by registration statement number, or the Form or Schedule and date of its filing.
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Amount Previously Paid: $66,803.15
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Filing Party: Watford Holdings Ltd.
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Form or Registration No.: Schedule 14A
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Date Filed: January 4, 2021
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THIS TRANSACTION, PASSED UPON THE MERITS OR FAIRNESS OF THIS TRANSACTION, OR PASSED
UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THIS SCHEDULE 13E‑3. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Introduction
This Amendment No. 3 to the Rule 13E‑3 Transaction Statement on Schedule 13E‑3, together with the exhibits hereto (this “Schedule 13E‑3” or this “Transaction Statement”), is being filed with the Securities and
Exchange Commission (the “SEC”) pursuant to Section 13(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), by: (i) Watford Holdings Ltd., a Bermuda exempted company (the “Company”), (ii) Arch Capital Group Ltd. (“Arch”),
Arch Reinsurance Ltd. (“ARL”), Gulf Reinsurance Limited., Greysbridge Holdings Ltd. (“Holdco”), Greysbridge Ltd., Nicolas Papadopoulo and Maamoun Rajeh (collectively, the “Arch Filing Persons”), (iii) Kelso Investment Associates X, L.P., KEP X, LLC,
and KSN Fund X, L.P. (collectively, the “Kelso Filing Persons”), and (iv) Warburg Pincus (Callisto) Global Growth (Cayman), L.P., Warburg Pincus (Europa) Global Growth (Cayman), L.P., Warburg Pincus Global Growth-B (Cayman), L.P., Warburg Pincus
Global Growth-E (Cayman), L.P., Warburg Pincus Global Growth Partners (Cayman), L.P., WP Global Growth Partners (Cayman), L.P., Warburg Pincus Financial Sector (Cayman), L.P., Warburg Pincus Financial Sector-D (Cayman), L.P., Warburg Pincus Financial
Sector Partners (Cayman), L.P. (collectively, the “Warburg Pincus Entities”) and WP Windstar Investments Ltd (together with the Warburg Pincus Entities, the “Warburg Pincus Filing Persons”). The Arch Filing Persons, Kelso Filing Persons and Warburg
Pincus Filing Persons, collectively, are referred to herein as the “Purchaser Filing Persons”. The Company and the Purchaser Filing Persons, collectively, are referred to herein as the “Filing Persons”.
This Transaction Statement relates to the Agreement and Plan of Merger, dated as of October 9, 2020 (as amended by Amendment No. 1 to the Agreement and Plan of Merger, dated November 2, 2020, and as it may be further
amended from time to time, the “Merger Agreement”), and the related Statutory Merger Agreement (the “Statutory Merger Agreement”) by and among Arch, Merger Sub and the Company. Arch has assigned its rights under the Merger Agreement to Holdco,
however, as provided in the Merger Agreement, Arch remains contractually responsible for the performance of its obligations under the Merger Agreement. Holdco has obtained equity commitments as follows: (i) the Kelso Filing Persons have committed to
make an aggregate cash contribution of up to the amount of $ 201,936 ,000, and to contribute to Holdco the 230,400 common shares of Watford owned by affiliates of Kelso, (ii) the Warburg Pincus Entities have committed to make an
aggregate cash contribution of up to the amount of $ 201,936 ,000, and to contribute to Holdco the 230,400 common shares of Watford owned by WP Windstar, and (iii) ARL has committed to make a cash contribution of up to the
amount of $ 208,628 ,000, and to contribute to Holdco the 2,039,200 common shares of Watford owned by ARL (the foregoing, collectively, being referred to herein as the “Equity Financing”). Upon consummation of the Equity
Financing, ARL will own 40% of Holdco, the Kelso Filing Persons will own 30% of Holdco, and the Warburg Pincus Filing Persons will own 30% of Holdco.
Pursuant to the Merger Agreement and the Statutory Merger Agreement, if the conditions to the closing of the merger are either satisfied or waived, Merger Sub will be merged with and into the Company with the Company
being the surviving company in the merger (the “merger”). Upon completion of the merger, (i) each of the common shares of the Company, par value $0.01 per share (“common share”), that is issued and outstanding at the effective time of the merger
(other than (x) shares to be canceled pursuant to the Merger Agreement and (y) restricted share units (“RSUs”) to be canceled and exchanged pursuant to the Merger Agreement) will be canceled and converted into the right to receive $35.00, in cash,
without interest and less any required withholding taxes (the “Merger Consideration”) and (ii) each of the 8½% Cumulative Redeemable Preference Share of the Company, $0.01 par value per preference share (the “preference shares”), then outstanding
will continue as a preference share of the surviving company and will be entitled to the same dividend and other relative rights, preferences, limitations and restrictions as currently apply to the preference shares. Upon completion of the merger,
the current holders of Watford common shares (other than ARL) will cease to have any ownership interest in the common shares of the Company and all of the surviving company’s common shares will be owned by Holdco.
Two members of the Company’s current board of directors, Nicolas Papadopoulo and Maamoun Rajeh, were appointed to serve on the Company’s board of directors by Arch (the “Arch Directors”). The Arch Directors did not
participate in the board’s or any board committee’s deliberations relating to the merger agreement, the statutory merger agreement, or any transaction contemplated by either agreement (including the merger), and did not participate in the vote to
approve the merger agreement, the statutory merger agreement or any transaction contemplated by either agreement (including the merger). Accordingly, as used in this transaction statement, references to the “Board” or the “Board of Directors” or to
any action taken by “directors” of the Company or any recommendation made by the “Board” or “Board of Directors” means the Company’s board of directors acting without the participation of the Arch Directors.
The Board of Directors has (a) determined that the Merger Consideration constitutes fair value for each common share in accordance with the Companies Act 1981 of Bermuda (the “Bermuda Companies Act”), (ii) determined
that the continuation of each outstanding preference share as a preference share of the surviving company with the same dividend and other relative rights, preferences, limitations and restrictions as are now provided to the preference shares
constitutes fair value for each preference share in accordance with the Bermuda Companies Act, (iii) determined that the terms of the Merger Agreement and the Statutory Merger Agreement and the transactions contemplated thereby, including the merger,
are fair to and in the best interests of the Company and its shareholders, (iv) approved and declared advisable the execution, delivery and performance of the Merger Agreement and the Statutory Merger Agreement and the consummation of the
transactions contemplated thereby, including the merger, and (v) subject to the right of the Board of Directors to change its recommendation in certain circumstances, recommended that the Company’s shareholders vote in favor of a proposal to approve
and adopt the Merger Agreement, the Statutory Merger Agreement and the transactions contemplated thereby, including the merger at a duly held meeting of such shareholders for such purpose. Consummation of the merger is subject to customary
conditions, including without limitation the approval of the Merger Agreement and the transactions contemplated thereby by the affirmative votes of shares carrying not less than 50% of the total voting rights of all issued and outstanding common
shares and preference shares, voting together as a single class, at a meeting of the Company’s shareholders and the receipt of certain regulatory approvals.
Concurrently with the filing of this Transaction Statement, the Company is filing with the SEC a definitive proxy statement (the “Proxy Statement”) on Schedule 14A under Regulation 14A of the Exchange Act,
pursuant to which the Board of Directors is soliciting proxies from shareholders of the Company in connection with the merger. The Proxy Statement is attached hereto as Exhibit (a)(1). A copy of the Merger Agreement is attached to the Proxy
Statement as Annex A and is incorporated herein by reference.
Pursuant to General Instruction F to Schedule 13E‑3, the information in the Proxy Statement, including all annexes thereto, is expressly incorporated by reference herein in its entirety, and responses to each item
herein are qualified in their entirety by the information contained in the Proxy Statement. The cross-references below are being supplied pursuant to General Instruction G to Schedule 13E‑3 and show the location in the Proxy Statement of the
information required to be included in response to the items of Schedule 13E‑3.
All information concerning the Company contained in, or incorporated by reference into, this Transaction Statement and the Proxy Statement was supplied by the Company. Similarly, all information concerning each other
Filing Person contained in, or incorporated by reference into, this Transaction Statement and the Proxy Statement was supplied by such Filing Person. No Filing Person, including the Company, is responsible for the accuracy of any information
supplied by any other Filing Person.
Item 1. Summary Term Sheet
The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Summary Term Sheet”
“Questions and Answers about the Special General Meeting and the Merger”
Item 2. Subject Company Information
(a) Name and Address. The Company’s name and the address and telephone number of its principal executive office are as follows:
Watford Holdings Ltd.
Waterloo House, 1st Floor
100 Pitts Bay Road, Pembroke HM 08
Bermuda
Telephone: +1 441 278-3455
(b) Securities. The class of securities to which this Transaction Statement relates is the Company’s common shares, par value $0.01 per share. As of December 31, 2020, there
were 19,886,979 common shares issued and outstanding.
(c) Trading Market and Price. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference: “Important Information Regarding the Company—Market Price of the Company’s Common Shares and Preference Shares”
(d) Dividends. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference: “Important
Information Regarding the Company—Dividends”
(e) Prior Public Offerings. No underwritten public offering of the subject securities for cash that was registered under the Securities Act of 1933 or exempt from registration
under Regulation A has been made during the past three years.
(f) Prior Stock Purchases. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference: “Important
Information Regarding the Company—Transactions in Common Shares and Preference Shares”
Item 3. Identity and Background of Filing Person
(a)–(c) Name and Address; Business and Background of Entities; Business and Background of Natural Persons. The information set forth in the Proxy Statement under the following
captions is incorporated herein by reference:
“Summary Term Sheet”
“Important Information Regarding the Company”
“Important Information Regarding the Arch Filing Persons”
“Important Information Regarding the Kelso Filing Persons”
“Important Information Regarding the Warburg Pincus Filing Persons”
“The Parties to the Merger and Their Principal Affiliates”
Item 4. Terms of the Transaction
(a) (1) Tender Offers. Not applicable.
(a) (2) Mergers or Similar Transactions. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Summary Term Sheet”
“Questions and Answers about the Special General Meeting and the Merger”
“The Merger Agreement”
“The Special General Meeting—Required Shareholder Votes for the Merger”
“Special Factors—Background of the Merger”
“Special Factors—Purpose and Reasons of the Company for the Merger; Position of the Company as to Fairness of the Merger; Recommendation of the Board of Directors”
“Special Factors—Purposes and Reasons of the Purchaser Filing Persons for the Merger”
“Special Factors—Position of the Purchaser Filing Persons as to Fairness of the Merger”
“Special Factors—Certain Effects of the Merger”
“Special Factors—Interests of the Company’s Directors and Executive Officers in the Merger”
“Special Factors—Anticipated Accounting Treatment of the Merger”
“Special Factors—U.S. Federal Income Tax Consequences of the Merger”
(c) Different Terms. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Summary Term Sheet”
“Special Factors—Certain Effects of the Merger”
“Special Factors—Interests of the Company’s Directors and Executive Officers in the Merger”
“The Merger Agreement—Effect of the Merger on the Shares of the Company and Merger Sub”
“Advisory Vote on Merger Related Compensation”
(d) Appraisal Rights. The information set forth in the Proxy Statement under the following captions, and the following annex to the Proxy Statement, are incorporated herein by
reference:
“Summary Term Sheet”
“Questions and Answers about the Special General Meeting and the Merger”
“Special Factors—Appraisal Rights”
“Appraisal Rights”
Annex E: Copy of Section 106 of the Bermuda Companies Act
(e) Provisions for Unaffiliated Security Holders. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference: “Provisions for Public Shareholders”
(f) Eligibility for Listing or Trading. Not applicable.
Item 5. Past Contacts, Transactions, Negotiations and Agreements
(a) (1)–(2) Transactions. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Summary Term Sheet”
“Special Factors—Background of the Merger”
“Special Factors—Interests of the Company’s Directors and Executive Officers in the Merger”
“Special Factors—Voting and Support Agreements”
“Voting and Support Agreements”
“Important Information Regarding the Company—Transactions in Common Shares and Preference Shares”
(b)–(c) Significant Corporate Events; Negotiations or Contacts. The information set forth in the Proxy Statement under the following captions, and the following annexes to the
Proxy Statement, are incorporated herein by reference:
“Special Factors—Background of the Merger”
“Special Factors—Voting and Support Agreements”
“The Merger Agreement”
“Voting and Support Agreements”
Annex A: Merger Agreement
Annex B: Arch Voting and Support Agreement
Annex C: Enstar Voting and Support Agreement
Annex F: Kelso Voting and Support Agreement
Annex G: WP Windstar Voting and Support Agreement
The Company and Arch are party to various agreements which are described in the Company’s Definitive Proxy Statement on Schedule 14A, as supplemented, filed with the SEC on April 14, 2020, under the caption “Certain
Relationships and Related Party Transactions,” and such disclosure is incorporated herein by reference.
(e) Agreements Involving the Subject Company’s Securities. The information set forth in the Proxy Statement under the following captions, and the following annexes to the Proxy
Statement, are incorporated herein by reference:
“Special Factors—Voting and Support Agreements”
“The Merger Agreement”
“Important Information Regarding the Company—Security Ownership of Directors, Executive Officers and Certain Beneficial Owners”
“Important Information Regarding the Company—Transactions in Common Shares and Preference Shares”
“Voting and Support Agreements”
Annex A: Merger Agreement
Annex B: Arch Voting and Support Agreement
Annex C: Enstar Voting and Support Agreement
Annex F: Kelso Voting and Support Agreement
Annex G: WP Windstar Voting and Support Agreement
Item 6. Purposes of the Transaction and Plans or Proposals.
(b) Use of Securities Acquired. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Questions and Answers About the Special General Meeting and the Merger”
“Special Factors—Certain Effects of the Merger”
“The Merger Agreement—Effect of the Merger on the Shares of the Company and Merger Sub”
“The Merger Agreement—Treatment of Company Equity Awards”
(c) (1)–(8) Plans. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference: “Special
Factors—Plans for the Company After the Merger”
Item 7. Purposes, Alternatives, Reasons and Effects
(a) Purposes. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Summary Term Sheet—Purpose and Reasons of the Company for the Merger; Position of the Company as to Fairness of the Merger; Recommendation of the Board of Directors”
“Summary Term Sheet—Purposes and Reasons of the Purchaser Filing Persons for the Merger”
“Special Factors—Background of the Merger”
“Special Factors—Purpose and Reasons of the Company for the Merger; Position of the Company as to Fairness of the Merger; Recommendation of the Board of Directors”
“Special Factors—Purposes and Reasons of the Purchaser Filing Persons for the Merger”
(b) Alternatives. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Summary Term Sheet—Purpose and Reasons of the Company for the Merger; Position of the Company as to Fairness of the Merger; Recommendation of the Board of Directors”
“Special Factors—Background of the Merger”
“Special Factors—Purpose and Reasons of the Company for the Merger; Position of the Company as to Fairness of the Merger; Recommendation of the Board of Directors”
“Special Factors—Purposes and Reasons of the Purchaser Filing Persons for the Merger”
(c) Reasons. The information set forth in the Proxy Statement under the following captions, and the following annex to the Proxy Statement, are incorporated herein by reference:
“Summary Term Sheet—Purpose and Reasons of the Company for the Merger; Position of the Company as to Fairness of the Merger; Recommendation of the Board of Directors”
“Summary Term Sheet—Purposes and Reasons of the Purchaser Filing Persons for the Merger”
“Special Factors—Background of the Merger”
“Special Factors—Purpose and Reasons of the Company for the Merger; Position of the Company as to Fairness of the Merger; Recommendation of the Board of Directors”
“Special Factors—Purposes and Reasons of the Purchaser Filing Persons for the Merger”
“Special Factors—Certain Effects of the Merger”
“Special Factors—Opinion of Morgan Stanley & Co. LLC”
Annex D: Opinion of Morgan Stanley & Co. LLC
(d) Effects. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Questions and Answers about the Special General Meeting and the Merger”
“Summary Term Sheet”
“Special Factors—Background of the Merger”
“Special Factors—Purpose and Reasons of the Company for the Merger; Position of the Company as to Fairness of the Merger; Recommendation of the Board of Directors”
“Special Factors—Certain Effects of the Merger”
“Special Factors—Interests of the Company’s Directors and Executive Officers in the Merger”
“Special Factors—Anticipated Accounting Treatment of the Merger”
“Special Factors—U.S. Federal Income Tax Consequences of the Merger”
“The Merger Agreement—Structure of the Merger”
“The Merger Agreement—Effect of the Merger on the Shares of the Company and Merger Sub”
“The Merger Agreement—Treatment of Company Equity Awards”
“Advisory Vote on Merger Related Compensation”
Item 8. Fairness of the Transaction
(a)–(b) Fairness; Factors Considered in Determining Fairness. The information set forth in the Proxy Statement under the following captions, and the following annex to the Proxy
Statement, are incorporated herein by reference:
“Summary Term Sheet—Opinion of Morgan Stanley & Co. LLC”
“Summary Term Sheet—Interests of the Company’s Directors and Executive Officers in the Merger”
“Special Factors—Background of the Merger”
“Special Factors—Purpose and Reasons of the Company for the Merger; Position of the Company as to Fairness of the Merger; Recommendation of the Board of Directors”
“Special Factors—Opinion of Morgan Stanley & Co. LLC”
“Special Factors—Position of the Purchaser Filing Persons as to Fairness of the Merger”
“Special Factors—Projected Financial Information”
“Special Factors—Interests of the Company’s Directors and Executive Officers in the Merger”
“Important Information Regarding the Company”
Annex D: Opinion of Morgan Stanley & Co. LLC
In addition, a written opinion of Morgan Stanley & Co. LLC dated October 8, 2020 as well as presentations by Morgan Stanley & Co. LLC to the Board of Directors on August 14, 2020, August 19, 2020, August 24,
2020, August 28, 2020, September 4, 2020, September 16, 2020, September 20, 2020, September 23, 2020, September 27, 2020, October 8, 2020 and November 1, 2020 are filed as Exhibits (c)(1), (c)(3), (c)(4), (c)(5), (c)(6), (c)(7), (c)(8), (c)(9),
(c)(10), (c)(11), (c)(12) and (c)(13), respectively, and are incorporated herein by reference.
(c) Approval of Security Holders. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Summary Term Sheet—Record Date and Quorum”
“Summary Term Sheet—Required Shareholder Votes for the Merger”
“Summary Term Sheet—Conditions to the Merger”
“Questions and Answers about the Special General Meeting and the Merger”
“Special Factors—Purpose and Reasons of the Company for the Merger; Position of the Company as to Fairness of the Merger; Recommendation of the Board of Directors”
“The Special General Meeting—Record Date and Quorum”
“The Special General Meeting—Required Shareholder Votes for the Merger”
“The Merger Agreement—Conditions to the Merger”
(d) Unaffiliated Representative. A majority of directors who are not employees of the subject company did not retain an unaffiliated representative to act solely on behalf of
unaffiliated security holders for purposes of negotiating the terms of the Rule 13e-3 transaction and/or preparing a report concerning the fairness of the transaction.
(e) Approval of Directors. The Rule 13e-3 transaction was approved by a majority of the directors of the subject company who are not employees of the subject company. The Arch
Directors are not employees of the subject company but did not participate in any votes to approve the Rule 13e-3 transaction.
(f) Other Offers. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference: “Special
Factors—Background of the Merger”
Item 9. Reports, Opinions, Appraisals and Negotiations
(a)–(c) Report, Opinion or Appraisal; Preparer and Summary of the Report, Opinion or Appraisal; Availability of Documents. The information set forth in the Proxy Statement under
the following captions, and the following annex to the Proxy Statement, are incorporated herein by reference:
“Summary Term Sheet—Purpose and Reasons of the Company for the Merger; Position of the Company as to Fairness of the Merger; Recommendation of the Board of Directors”
“Summary Term Sheet—Opinion of Morgan Stanley & Co. LLC”
“Special Factors—Background of the Merger”
“Special Factors—Purpose and Reasons of the Company for the Merger; Position of the Company as to Fairness of the Merger; Recommendation of the Board of Directors”
“Special Factors—Opinion of Morgan Stanley & Co. LLC”
“Special Factors—Summary of Certain Presentations Provided by Goldman Sachs”
“Where You Can Find Additional Information”
Annex D: Opinion of Morgan Stanley & Co. LLC
In addition, a written opinion of Morgan Stanley & Co. LLC dated October 8, 2020 as well as presentations by Morgan Stanley & Co. to the Board of Directors on August 14, 2020, August 19, 2020, August 24, 2020,
August 28, 2020, September 4, 2020, September 16, 2020, September 20, 2020, September 23, 2020, September 27, 2020, October 8, 2020 and November 1, 2020 are filed as Exhibits (c)(1), (c)(3), (c)(4), (c)(5), (c)(6), (c)(7), (c)(8), (c)(9), (c)(10),
(c)(11), (c)(12) and (c)(13), respectively, and are incorporated herein by reference. The reports, opinions or appraisals of Morgan Stanley & Co. LLC referenced in this Item 9 will be made available for inspection and copying at the principal
executive offices of the Company during its regular business hours by any interested equity security holder of the Company or representative who has been so designated in writing.
Presentations provided by Goldman Sachs & Co. LLC to the board of directors of Arch on August 3, 2020, September 14, 2020, September 18, 2020, September 21, 2020 and September 26, 2020, are filed as Exhibits
(c)(14), (c)(15), (c)(16), (c)(17) and (c)(18), respectively, and are incorporated herein by reference. The presentations provided by Goldman Sachs & Co. LLC referenced in this Item 9 will be made available for inspection and copying at the
principal executive offices of Arch during its regular business hours by any interested equity security holder of the Company or representative who has been so designated in writing.
Item 10. Source and Amounts of Funds or Other Consideration
(a)–(b) Source of Funds; Conditions. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Summary Term Sheet—Financing”
“Special Factors—Financing”
“The Merger Agreement—Other Covenants and Agreements—Financing Cooperation”
(c) Expenses. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Special Factors—Fees and Expenses”
“The Merger Agreement—Termination Fee”
(d) Borrowed Funds. Not applicable.
Item 11. Interest in Securities of the Subject Company
(a) Securities Ownership. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Special Factors—Certain Effects of the Merger”
“Important Information Regarding the Company—Security Ownership of Directors, Executive Officers and Certain Beneficial Owners”
“Important Information Regarding the Company—Transactions in Common Shares and Preference Shares”
“Important Information Regarding the Arch Filing Persons - Arch Filing Persons’ Ownership of Watford Shares; Transactions in Watford Shares”
“Important Information Regarding the Kelso Filing Persons - Kelso Filing Persons’ Ownership of Watford Shares; Transactions in Watford Shares”
“Important Information Regarding the Warburg Pincus Filing Persons – Warburg Pincus Filing Persons’ Ownership of Watford Shares; Transactions in Watford Shares”
(b) Securities Transactions. The information set forth in the Proxy Statement under the following captions, and the following annexes to the Proxy Statement, are incorporated
herein by reference:
“Special Factors—Voting and Support Agreements”
“Voting and Support Agreements”
“Important Information Regarding the Company—Security Ownership of Directors, Executive Officers and Certain Beneficial Owners”
“Important Information Regarding the Company—Transactions in Common Shares and Preference Shares”
Annex B: Arch Voting and Support Agreement
Annex C: Enstar Voting and Support Agreement
Annex F: Kelso Voting and Support Agreement
Annex G: WP Windstar Voting and Support Agreement
Item 12. The Solicitation or Recommendation
(d) Intent to Tender or Vote in a Going-Private Transaction. The information set forth in the Proxy Statement under the following captions, and the following annex to the Proxy
Statement, are incorporated herein by reference:
“Summary Term Sheet—Required Shareholder Votes for the Merger”
“Summary Term Sheet—Voting and Support Agreements”
“Questions and Answers about the Special General Meeting and the Merger”
“Special Factors—Purpose and Reasons of the Company for the Merger; Position of the Company as to Fairness of the Merger; Recommendation of the Board of Directors”
“Special Factors—Voting and Support Agreements”
“The Special General Meeting—Required Shareholder Votes for the Merger”
“Voting and Support Agreements”
Annex B: Arch Voting and Support Agreement
Annex C: Enstar Voting and Support Agreement
Annex F: Kelso Voting and Support Agreement
Annex G: WP Windstar Voting and Support Agreement
(e) Recommendation of Others. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Summary Term Sheet—Purpose and Reasons of the Company for the Merger; Position of the Company as to Fairness of the Merger; Recommendation of the Board of Directors”
“Questions and Answers about the Special General Meeting and the Merger”
“Special Factors—Background of the Merger”
“Special Factors—Purpose and Reasons of the Company for the Merger; Position of the Company as to Fairness of the Merger; Recommendation of the Board of Directors”
Item 13. Financial Statements
(a) Financial Information. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Important Information Regarding the Company—Historical Selected Financial Information”
“Important Information Regarding the Company—Book Value Per Share”
“Where You Can Find Additional Information”
In addition, the audited financial statements set forth in Item 8 of the Company’s Annual Report on Form 10‑K for the fiscal year ended December 31, 2019 and the financial statements set forth in Item 1 of the
Company’s Quarterly Report on Form 10‑Q for the quarterly period ended September 30, 2020 are incorporated herein by reference.
(b) Pro Forma Information. Not applicable.
Item 14. Persons/Assets, Retained, Employed, Compensated or Used
(a)–(b) Solicitations or Recommendations; Employees and Corporate Assets. The information set forth in the Proxy Statement under the following captions is incorporated herein by
reference:
“Summary Term Sheet—Opinion of Morgan Stanley & Co. LLC”
“Questions and Answers about the Special General Meeting and the Merger”
“Special Factors—Background of the Merger”
“Special Factors—Opinion of Morgan Stanley & Co. LLC”
“Special Factors—Fees and Expenses”
“The Special General Meeting—Solicitation of Proxies”
Item 15. Additional Information
(b) Golden Parachute Compensation. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Advisory Vote on Merger Related Compensation”
“Summary Term Sheet—Interests of the Company’s Directors and Executive Officers in the Merger”
“Special Factors—Interests of the Company’s Directors and Executive Officers in the Merger”
(c) Other Material Information. The information set forth in the Proxy Statement, including all annexes thereto, is incorporated herein by reference.
Item 16. Exhibits
(a)(1) Definitive Proxy Statement of Watford Holdings Ltd. (incorporated herein by reference to the
Schedule 14A filed concurrently with the Securities and Exchange Commission on February 19 , 2021 (the “Proxy Statement”)).
(a)(2) Form of Proxy Card (incorporated herein by reference to the Proxy
Statement).
(a)(3) Letter to Shareholders (incorporated herein by reference to the Proxy
Statement).
(a)(4) Notice of Special General Meeting of Shareholders (incorporated
herein by reference to the Proxy Statement).
(a)(5) Joint Press Release of Watford Holdings Ltd. and Arch Capital Group Ltd., dated October 9, 2020
(incorporated herein by reference to (i) Exhibit 99.1 to Watford Holdings Ltd.’s Form 8‑K filed with the Securities and Exchange Commission on October 9, 2020 and (ii) Exhibit 99.1 to Arch Capital Group Ltd.’s Form 8‑K filed with the Securities and
Exchange Commission on October 9, 2020).
(a)(6) Joint Press Release of Watford Holdings Ltd. and Arch Capital Group Ltd., dated November 2, 2020
(incorporated herein by reference to (i) Exhibit 99.1 to Watford Holdings Ltd.’s Form 8‑K filed with the Securities and Exchange Commission on November 2, 2020 and (ii) Exhibit 99.1 to Arch Capital Group Ltd.’s Form 8‑K filed with the Securities and
Exchange Commission on November 2, 2020).
(b) None.
(c)(1) Opinion of Morgan Stanley & Co. LLC dated October 8, 2020.
(c)(2) Opinion of Morgan Stanley & Co. LLC (incorporated herein by
reference to Annex D of the Proxy Statement).
(c)(3) Presentation to the Board of Directors, dated August 14, 2020, prepared by Morgan Stanley & Co. LLC for
the Board of Directors.
(c)(4) Presentation to the Board of Directors, dated August 19, 2020, prepared by Morgan Stanley & Co. LLC for
the Board of Directors.
(c)(5) Presentation to the Board of Directors, dated August 24, 2020, prepared by Morgan Stanley & Co. LLC for
the Board of Directors.
(c)(6) Presentation to the Board of Directors, dated August 28, 2020, prepared by Morgan Stanley & Co. LLC for
the Board of Directors.
(c)(7) Presentation to the Board of Directors, dated September 4, 2020, prepared by Morgan Stanley & Co. LLC
for the Board of Directors.
(c)(8) Presentation to the Board of Directors, dated September 16, 2020, prepared by Morgan Stanley & Co. LLC
for the Board of Directors.
(c)(9) Presentation to the Board of Directors, dated September 20, 2020, prepared by Morgan Stanley & Co. LLC
for the Board of Directors.
(c)(10) Presentation to the Board of Directors, dated September 23, 2020, prepared by Morgan Stanley & Co. LLC
for the Board of Directors.
(c)(11) Presentation to the Board of Directors, dated September 27, 2020, prepared by Morgan Stanley & Co.
LLC for the Board of Directors.
(c)(12) Presentation to the Board of Directors, dated October 8, 2020, prepared by Morgan Stanley & Co. LLC
for the Board of Directors.
(c)(13) Presentation to the Board of Directors, dated November 1, 2020, prepared by Morgan Stanley & Co. LLC
for the Board of Directors.
(c)(14) Presentation provided to the board of directors of Arch Capital Group Ltd., dated August 3, 2020,
prepared by Goldman Sachs & Co. LLC.
(c)(15) Presentation provided to the board of directors of Arch Capital Group Ltd., dated September 14, 2020,
prepared by Goldman Sachs & Co. LLC.
(c)(16) Presentation provided to the board of directors of Arch Capital Group Ltd., dated September 18, 2020,
prepared by Goldman Sachs & Co. LLC.
(c)(17) Presentation provided to the board of directors of Arch Capital Group Ltd., dated September 21, 2020,
prepared by Goldman Sachs & Co. LLC.
(c)(18) Presentation provided to the board of directors of Arch Capital Group Ltd., dated September 26, 2020,
prepared by Goldman Sachs & Co. LLC.
(d)(1) Agreement and Plan of Merger, dated as of October 9, 2020, by and
among Watford Holdings Ltd., Arch Capital Group Ltd. and Greysbridge Ltd. (incorporated herein by reference to Annex A of the Proxy Statement).
(d)(2) Amendment No. 1 to Agreement and Plan of Merger, dated as of
November 2, 2020, by and among Watford Holdings Ltd., Arch Capital Group Ltd. and Greysbridge Ltd. (incorporated herein by reference to Annex A of the Proxy Statement).
(d)(3) Voting and Support Agreement, dated as of October 9, 2020, by and
among Watford Holdings Ltd., Arch Reinsurance Ltd. and Gulf Reinsurance Ltd. (incorporated herein by reference to Annex B of the Proxy Statement).
(d)(4) Voting and Support Agreement, dated as of November 2, 2020, by and
among Watford Holdings Ltd., Arch Capital Group Ltd., Enstar Group Limited and Cavello Bay Reinsurance Limited (incorporated herein by reference to Annex C of the Proxy Statement).
(d)(5) Voting and Support Agreement, dated as of February 16, 2021, by and among Watford Holdings Ltd.,
Kelso Investment Associates X, L.P., KEP X, LLC, and KSN Fund X, L.P. (incorporated herein by reference to Annex F of the Proxy Statement).
(d)(6)
Voting and Support Agreement, dated as of February 16, 2021, by and between Watford Holdings Ltd. and WP Windstar Investments Ltd (incorporated herein by reference to Annex G of the Proxy Statement).
(f) Section 106 of the Bermuda Companies Act (incorporated herein by
reference to Annex D of the Proxy Statement).
(g) None.
SIGNATURES
After due inquiry and to the best of each of the undersigned’s knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.
Dated as of February 19 , 2021
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WATFORD HOLDINGS LTD.
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By:
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/s/ Jonathan D. Levy
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Name:
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Jonathan D. Levy |
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Title:
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Chief Executive Officer |
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ARCH CAPITAL GROUP LTD.
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By:
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/s/ Maamoun Rajeh
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Name:
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Maamoun Rajeh
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Title:
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Authorized Signatory
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ARCH REINSURANCE LTD.
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By:
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/s/ Maamoun Rajeh
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Name:
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Maamoun Rajeh
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Title:
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Authorized Signatory
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GULF REINSURANCE LIMITED
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By:
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/s/ Roderick Romeo
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Name:
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Roderick Romeo
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Title:
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Authorized Signatory
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GREYSBRIDGE HOLDINGS LTD.
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By:
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/s/ Pierre Jal
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Name:
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Pierre Jal
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Title:
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Authorized Signatory
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GREYSBRIDGE LTD.
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By:
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/s/ Pierre Jal
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Name:
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Pierre Jal
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Title:
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Authorized Signatory
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Nicolas Papadopoulo
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By:
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/s/ Nicolas Papadopoulo
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Maamoun Rajeh
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By:
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/s/Maamoun Rajeh
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WARBURG PINCUS (CALLISTO) GLOBAL GROWTH (CAYMAN), L.P.
By: Warburg Pincus (Cayman) Global Growth GP, L.P., its general partner
By: Warburg Pincus (Cayman) Global Growth GP LLC, its general partner
By: Warburg Pincus Partners II (Cayman), L.P., its managing member
By: Warburg Pincus (Bermuda) Private Equity GP Ltd., its general partner
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By:
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/s/ David Sreter
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Name:
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David Sreter
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Title:
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Authorised Signatory
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WARBURG PINCUS (EUROPA) GLOBAL GROWTH (CAYMAN), L.P.
By: Warburg Pincus (Cayman) Global Growth GP, L.P., its general partner
By: Warburg Pincus (Cayman) Global Growth GP LLC, its general partner
By: Warburg Pincus Partners II (Cayman), L.P., its managing member
By: Warburg Pincus (Bermuda) Private Equity GP Ltd., its general partner
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By:
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/s/ David Sreter
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Name:
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David Sreter
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Title:
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Authorised Signatory
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WARBURG PINCUS GLOBAL GROWTH-B (CAYMAN), L.P.
By: Warburg Pincus (Cayman) Global Growth GP, L.P., its general partner
By: Warburg Pincus (Cayman) Global Growth GP LLC, its general partner
By: Warburg Pincus Partners II (Cayman), L.P., its managing member
By: Warburg Pincus (Bermuda) Private Equity GP Ltd., its general partner
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By:
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/s/ David Sreter
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Name:
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David Sreter
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Title:
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Authorised Signatory
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WARBURG PINCUS GLOBAL GROWTH-E (CAYMAN), L.P.
By: Warburg Pincus (Cayman) Global Growth GP, L.P., its general partner
By: Warburg Pincus (Cayman) Global Growth GP LLC, its general partner
By: Warburg Pincus Partners II (Cayman), L.P., its managing member
By: Warburg Pincus (Bermuda) Private Equity GP Ltd., its general partner
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By:
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/s/ David Sreter
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Name:
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David Sreter
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Title:
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Authorised Signatory
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WARBURG PINCUS GLOBAL GROWTH PARTNERS (CAYMAN), L.P.
By: Warburg Pincus (Cayman) Global Growth GP, L.P., its general partner
By: Warburg Pincus (Cayman) Global Growth GP LLC, its general partner
By: Warburg Pincus Partners II (Cayman), L.P., its managing member
By: Warburg Pincus (Bermuda) Private Equity GP Ltd., its general partner
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By:
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/s/ David Sreter
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Name:
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David Sreter
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Title:
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Authorised Signatory
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WP GLOBAL GROWTH PARTNERS (CAYMAN), L.P.
By: Warburg Pincus (Cayman) Global Growth GP, L.P., its general partner
By: Warburg Pincus (Cayman) Global Growth GP LLC, its general partner
By: Warburg Pincus Partners II (Cayman), L.P., its managing member
By: Warburg Pincus (Bermuda) Private Equity GP Ltd., its general partner
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By:
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/s/ David Sreter
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Name:
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David Sreter
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Title:
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Authorised Signatory
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WARBURG PINCUS FINANCIAL SECTOR (CAYMAN), L.P.
By: Warburg Pincus (Cayman) Financial Sector GP, L.P., its general partner
By: Warburg Pincus (Cayman) Financial Sector GP LLC, its general partner
By: Warburg Pincus Partners II (Cayman), L.P., its managing member
By: Warburg Pincus (Bermuda) Private Equity GP Ltd., its general partner
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By:
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/s/ David Sreter
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Name:
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David Sreter
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Title:
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Authorised Signatory
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WARBURG PINCUS FINANCIAL SECTOR-D (CAYMAN), L.P.
By: Warburg Pincus (Cayman) Financial Sector GP, L.P., its general partner
By: Warburg Pincus (Cayman) Financial Sector GP LLC, its general partner
By: Warburg Pincus Partners II (Cayman), L.P., its managing member
By: Warburg Pincus (Bermuda) Private Equity GP Ltd., its general partner
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By:
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/s/ David Sreter
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Name:
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David Sreter
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Title:
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Authorised Signatory
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WARBURG PINCUS FINANCIAL SECTOR PARTNERS (CAYMAN), L.P.
By: Warburg Pincus (Cayman) Financial Sector GP, L.P., its general partner
By: Warburg Pincus (Cayman) Financial Sector GP LLC, its general partner
By: Warburg Pincus Partners II (Cayman), L.P., its managing member
By: Warburg Pincus (Bermuda) Private Equity GP Ltd., its general partner
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By:
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/s/ David Sreter
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Name:
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David Sreter
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Title:
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Authorised Signatory
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WP WINDSTAR INVESTMENTS LTD
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By:
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/s/ David Sreter
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Name:
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David Sreter
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Title:
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Director
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KELSO INVESTMENT ASSOCIATES X. L.P.
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By: Kelso GP X, L.P., its general partner
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By: Kelso GP X, LLC, its general partner
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By:
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/s/ William Woo
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Name:
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William Woo
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Title:
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Managing Member
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KEP X, LLC
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By:
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/s/ William Woo
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Name:
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William Woo
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Title:
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Managing Member
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KSN FUND X, L.P.
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By: Kelso GP X, L.P., its general partner
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By: Kelso GP X, LLC, its general partner
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By:
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/s/ William Woo
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Name:
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William Woo
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Title:
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Managing Member
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