By Nell Mackenzie
LONDON (Reuters) -Institutional Shareholder Services has recommended that shareholders in Third Point Investors Limited vote against a deal to acquire Malibu Life Reinsurance SPC, a report from the proxy adviser said on Tuesday.
The proposed deal would “fundamentally change” the fund’s investment case without offering minority shareholders an exit option at a fair price for their entire holdings, the report said.
Third Point had no immediate comment on the recommendation.
Third Point Investors Limited, which listed on the London Stock Exchange in 2007, said last month that it will acquire Malibu Life Reinsurance SPC, a life annuity reinsurer which billionaire Daniel Loeb launched last year. Shareholders have to vote on the deal on August 14.
Loeb has proposed transforming his Third Point Investors Limited to address a valuation discount it has to his New York-based hedge fund Third Point.
Third Point Investors (TPIL) would also move from being based in Guernsey to the Cayman Islands, change its name to Malibu Life Holdings Ltd, according to the ISS report.
These changes would constitute a “reverse takeover” under UK Listing Rules, ISS said.
Like other UK-listed investment companies, TPIL is known as a feeder fund and was originally designed to give retail shareholders a taste of hedge funds that had long been off limits to all but the wealthiest financiers.
A dissenting shareholder group said the acquisition should be put to an independent vote.
“Without Third Point and Dan Loeb’s affiliated
shares and votes, it is the Group’s considered view that the transaction would not pass,” the dissenting shareholder group said in a statement.
It includes UK investment firm Asset Value Investors Limited, Metage Capital and Evelyn Partners Investment Management, as well as Australian investment firm Staude Capital and California-based Almitas Capital.
The dissenting shareholder group said on Friday that it had contacted a further 10% of shareholders that it said oppose the deal. Reuters was not able to verify the identity of these shareholders or their intention to vote. TPIL said last month that it had irrevocable undertakings from shareholders holding 45% of the company’s voting rights to back the deal, including Third Point Management, with 25%.
(Reporting by Nell Mackenzie; Editing by Anousha Sakoui and Jane Merriman)
