Stephen Simpson, CFA
Long only, growth at reasonable price, value, research analyst

Tower Group Manages To Preserve Some Value

The long nightmare that is Tower Group (NASDAQ:TWGP) now has an end in sight. Assuming that a sufficient number of Tower shareholders approve, and that the company doesn't go insolvent before the deal closes, Tower will be selling itself to ACP Re, a privately-held insurance company controlled by the founder of AmTrust Financial Services (NASDAQ:AFSI). As huge reserve charges had severely depleted the company's capital and led to downgrades that essentially excluded it from the market, I believe this is the best outcome that shareholders could reasonably ask for or expect.

The Deal

Assuming that the deal goes through as announced, ACP Re will be acquiring Tower Group for $3 per share or $172 million...

Join Seeking Alpha PRO to read this archived article and 11,574 other archived articles
FREESA PRO MEMBERS
IDEA GENERATORXExclusive access to 10 PRO ideas every day
INVESTING IDEAS LIBRARYXExclusive access to PRO library of more than 15,000 ideas
SECTOR EXPERT NETWORKXExclusive access to all sector experts for direct consultation
PERFORMANCE TRACKINGXTrack performance of all PRO stock ideas
PROFESSIONAL TOOLSXProfessional Idea Filters to zero-in based on industry, market cap and more
PRO Top long ideas returned 21.7% in 2016**
"As a PRO member, we get uniquely valuable perspective that go beyond our quantiative analysis... We rely on PRO to get beyond the numbers quickly and add much needed perspective. It keeps me ahead of the next big thing. - Mark Choate, Malaga Cove Capital"
Mark Choate, Malaga Cove Capital
"Contributors (writers and commentators), often have a long history in the secuirities they opine on and some are clearly well positioned industry participants with detailed industry views that can help provide color on where the skeletons are buried in a particular secuirity and/or industry."
Jim Roumell, Roumell Asset Management
You may cancel at any time for any reason, and receive a prompt refund for membership on months paid and not used (max. 6 months). Details