PEMBROKE, Bermuda - Hamilton Insurance Group, Ltd. (NYSE: HG) has announced an agreement to repurchase approximately 9.1 million of its Class A common shares from Blackstone (NYSE:BX) Alternative Solutions LLC at a price of $12.00 per share. The transaction, set to close on May 10, 2024, involves shares bought at a 12% discount to the 30-day volume weighted average price of the company's Class B common shares.
The total cost of the buyback, amounting to $109.5 million, will be financed through a loan from the company's revolving credit facility. Hamilton plans to repay the loan using funds from the Two Sigma Hamilton Fund. Following the repurchase, the company will have 101.9 million shares outstanding, as the acquired shares will be cancelled.
CEO Pina Albo expressed satisfaction with the repurchase opportunity, highlighting its potential to enhance shareholder value. Albo also acknowledged Blackstone's decade-long investment in Hamilton, now concluding with this transaction. The repurchase is expected to positively impact Hamilton's earnings per share, book value per share, and return on equity.
The announcement follows Hamilton's strong first-quarter earnings and a recent upgrade in its AM Best rating. The company anticipates that the share repurchase will contribute to shareholder value without hindering its strategic growth plans in specialty insurance and reinsurance markets.
Blackstone Alternative Solutions reciprocated by thanking Hamilton for their longstanding partnership and conveyed best wishes for the company's continued success.
This repurchase agreement comes with the usual caveats of forward-looking statements, cautioning that actual results could differ from current expectations due to various risks and uncertainties.
Hamilton Insurance Group, a Bermuda-based firm, specializes in underwriting global specialty insurance and reinsurance risks through its subsidiaries. The transaction details are based on a press release statement from Hamilton Insurance Group.
InvestingPro Insights
In light of Hamilton Insurance Group's share repurchase announcement, InvestingPro data and tips provide a deeper understanding of the company's financial health and market performance. As of the last twelve months leading up to Q4 2023, Hamilton Insurance Group has displayed a robust revenue growth rate of 28.56%, with an even more impressive quarterly revenue growth of 89.95% in Q1 2023. This indicates a strong upward trend in the company's earnings, which may reassure investors of its growth potential.
The company's P/E ratio stands at an attractive 5.33, suggesting that the stock is trading at a low earnings multiple compared to its peers. This could imply that the shares are undervalued, presenting a potential opportunity for investors. Additionally, Hamilton's price to book ratio of 0.82 indicates that the stock may be undervalued based on its net asset value, which could be of interest to value investors.
Offering further confidence, InvestingPro Tips highlight that analysts have revised their earnings upwards for the upcoming period, and the company is expected to be profitable this year. With a market capitalization of $1.63 billion USD, Hamilton Insurance Group also stands out as it has liquid assets exceeding its short-term obligations, pointing towards a solid liquidity position.
For readers interested in a deeper dive into Hamilton Insurance Group's financials and market performance, additional InvestingPro Tips are available. There are a total of 6 tips listed on InvestingPro, including insights on the company's profitability over the last twelve months and its policy of not paying dividends to shareholders. To access these insights, visit: https://www.investing.com/pro/HG. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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