Argo engages Goldman Sachs in hunt for buyer

Argo Group has sent a letter to shareholders in connection with its 2022 Annual Meeting of Shareholders, detailing the comprehensive ongoing strategic review process the company’s board is taking to evaluate a range of alternatives, including a potential sale of the whole company.

The letter explains that Goldman Sachs is advising the company on potential buyers and has conducted exhaustive outreach to more than 80 parties, including a mix of potential strategic buyers and financial sponsors. 

The board is urging shareholders to support this process and to vote for the BLUE proxy card nominees.

In particular, it states that the company’s Capital Returns’ candidates – Ronald Bobman and David Michelson – should not be involved in the process.

“The ongoing process is being overseen by the Strategic Review Committee of the Board, which comprises directors who have significant experience successfully executing M&A transactions and maximizing shareholder value,” it states.

“To ensure shareholder alignment, the board appointed J Daniel Plants, chief investment officer of Voce Capital Management LLC, Argo’s largest active shareholder with approximately 9.5% of the Company’s shares, to the board and as chair of the Strategic Review Committee.”

Divestments and restructuring

Over the last two years Argo has announced divestitures to exit international businesses and focus on more profitable business lines. 

In August, the company announced its entry into a Loss Portfolio Transfer (LPT) with Enstar Group Limited for approximately $746m, which closed on 9 November 2022.

And in September, the company announced the sale of Argo Underwriting Agency Limited and its Lloyd’s Syndicate 1200 to Westfield for  approximately $125m.

“As part of our review of strategic alternatives, we are taking decisive actions to optimise our operations and business structure, better positioning the company for continued profitable growth and returns in the US as we strive to maximise value for shareholders,” said Tom Bradley, Argo’s executive chairman and chief executive officer, at the time of the announcement.

“Along with other strategic actions underway, the sale of our Lloyd’s business advances Argo’s primary objective to operate as a nimble, US-centric, commercial specialty insurer.