You may vote only if you were the holder of record of Preferred Shares as of the record date. If you acquire any Preferred Shares after the record date, you may tender those Preferred Shares, but you may not vote them unless you obtain an irrevocable proxy from the holder who held those shares as of the record date.
Any holder of Preferred Shares desiring to tender all or any portion of such holder’s Preferred Shares should either (i) complete and manually sign the Letter of Transmittal in accordance with the instructions in the Letter of Transmittal and mail or deliver it (or a facsimile thereof) together with the certificate(s) evidencing tendered Preferred Shares, and any other required documents, to the depositary or tender such shares pursuant to the procedure for book-entry transfer set forth in the Offer to Purchase or (ii) request such holder’s broker, dealer, commercial bank, trust company or other nominee to effect the transaction for such holder. Any holder whose Preferred Shares are registered in the name of a broker, dealer, commercial bank, trust company or other nominee must contact such broker, dealer, commercial bank, trust company or other nominee if such holder desires to tender such Preferred Shares.
A holder who desires to tender Preferred Shares and whose certificates evidencing such Preferred Shares are not immediately available, or who cannot comply with the procedure for book-entry transfer on a timely basis, may tender such shares by following the procedure for guaranteed delivery set forth in the Offer to Purchase.
Questions or requests for assistance may be directed to the information agent at its address and telephone numbers, or the dealer-manager at its telephone number, in each case, as set forth on the back cover of this Supplement. Requests for additional copies of this Supplement, the Original Offer to Purchase, the Letter of Transmittal and the notice of guaranteed delivery may be directed to the information agent, and copies will be furnished promptly at Purchaser’s expense. Holders of Preferred Shares may also contact their brokers, dealers, commercial banks, trust companies or other nominees for assistance concerning the tender offer.
THIS SUPPLEMENT, THE ORIGINAL OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION, AND YOU SHOULD READ THEM CAREFULLY AND IN THEIR ENTIRETY BEFORE MAKING A DECISION WITH RESPECT TO THE TENDER OFFER OR THE PROPOSED AMENDMENT.
Except as otherwise set forth in this Supplement or the Amended Letter of Transmittal, the terms and conditions set forth in the Original Offer to Purchase and Original Letter of Transmittal, as amended or supplemented from time to time, remain applicable in all respects to the tender offer. To the extent that any information or revision contained in this Supplement is inconsistent with the information in the Original Offer to Purchase, the information and revisions in this Supplement shall control.
Holders of Preferred Shares should read the Original Offer to Purchase in conjunction with this Supplement in considering whether to tender their Preferred Shares. Capitalized terms that we use in this Supplement but do not define have the meanings we assigned to them in the Original Offer to Purchase.
All references to the ‘‘Purchase Price’’ in the Offer to Purchase shall mean $22.50 net per share in cash (subject to applicable withholding taxes), without interest.
The following amendments and supplements to the information contained in the Original Offer to Purchase are keyed to the headings in the Original Offer to Purchase.
SUMMARY TERM SHEET
 | |
| • | The following questions and answers are added: |
Why are you sending this Supplement?
There have been developments relating to the tender offer since July 11, 2007. We have increased the price per share we are offering to pay for the Preferred Shares from $21.50 to $22.50 net per share in cash (subject to applicable withholding taxes), without interest. We are sending you this Supplement to offer you the higher price per share.
If I already tendered my Preferred Shares, do I have to do anything now?
No. Shares previously tendered pursuant to the Original Offer to Purchase and the Original Letter of Transmittal and any amendments to those documents, and not withdrawn, constitute valid tenders for purposes of the offer. Therefore, holders of Preferred Shares who have validly tendered and not withdrawn their shares are not required to take any further action with respect to such shares in order to receive the increased tender offer price if shares are accepted for payment and paid for by us pursuant to the tender offer, except as may be required by the guaranteed delivery procedure if that procedure was utilized. See ‘‘Terms of the Tender Offer; Procedure for Tendering Shares’’ in the Offer to Purchase.
Does this Supplement change the date and time of the special general meeting of holders of Preferred Shares or any proposal to be voted on at the meeting?
No. As set forth in the Original Offer to Purchase, the special general meeting of holders of Preferred Shares will be held on Friday, August 10, 2007, at 6:30 p.m. (local time), at the Sheraton Gateway Hotel, Pearson International Airport, Terminal 3, Toronto, Ontario, Canada. At the special general meeting, holders of Preferred Shares will be voting on the proposals described in the Original Offer to Purchase.
What is the market value of my Preferred Shares as of a recent date of this revised offer?
On June 1, 2007, the last trading day before we announced the tender offer, the closing price of the Preferred Shares on the Nasdaq Global Market was $17.57 per share. On July 18, 2007, the closing price of the Preferred Shares was $21.99 per share. See ‘‘Price Range of Shares; Dividends’’ in the Offer to Purchase.
Is the revised offer changing the time I have to tender my Preferred Shares in the tender offer?
No. We are not extending the tender offer for the Preferred Shares by filing this Supplement or otherwise changing the length of time the tender offer will remain open. Therefore, you may continue to tender your Preferred Shares any time before the tender offer expires as described in
1
the Original Offer to Purchase. The tender offer remains scheduled to expire at 12:00 midnight, New York City time, on Friday, August 10, 2007, unless extended, which we refer to as the expiration date. See ‘‘Terms of the Tender Offer—Expiration Date; Extension of Tender Period’’ in the Offer to Purchase.
Can I still withdraw previously tendered Preferred Shares?
Yes. You may withdraw tendered Preferred Shares any time before the expiration date. Withdrawing tendered Preferred Shares will not affect your proxy regarding the proposed amendment. See ‘‘Terms of the Tender Offer—Withdrawal Rights’’ in the Offer to Purchase.
Who can I talk to if I have questions about the tender offer or the proxy solicitation?
If you have questions about the tender offer or the proxy solicitation you may call:
| | |
| – | Friedman, Billings, Ramsey & Co., Inc. at (703) 875-1499 or (866) 779-4943 (toll free) with questions regarding the terms of the tender offer; or |
| | |
| – | Georgeson Inc. at (888) 605-7527 (toll free) with questions regarding how to submit your proxy, attend the meeting, tender your Preferred Shares or to request additional copies of this document, the letter of transmittal or other documents related to the tender offer or the proxy solicitation. |
Friedman, Billings, Ramsey & Co., Inc. is acting as dealer-manager for the tender offer, and as co-solicitation agent for the proxy solicitation. The Bank of New York is acting as depositary for the tender offer, and Georgeson Inc. is acting as information agent for the tender offer and co-solicitation agent for the proxy solicitation. See the back cover of this document for additional information about the dealer-manager/co-solicitation agent, the depositary and the information agent/co-solicitation agent.
| |
| • | The following question and answer is amended and restated in its entirety to read as follows: |
‘‘How much is Purchaser offering to pay and what is the form of payment?
$22.50 per share, net to the seller in cash (subject to applicable withholding taxes), without interest, upon the terms and subject to the conditions set forth in this document and the Letter of Transmittal. See ‘‘Terms of the Tender Offer’’ in the Offer to Purchase.’’
SPECIAL FACTORS
| |
| • | The Section entitled ‘‘Background of the Tender Offer’’ is hereby amended by inserting the following paragraph at the end of such Section as a new paragraph: |
‘‘On July 19, 2007, the special committee of the board of directors of Quanta met to discuss various matters relating to the tender offer. At this meeting, the special committee discussed the purchase price for the Preferred Shares in the tender offer. After further review and evaluation of the information originally provided by FBR in its May 23, 2007 presentation and the factors listed below under ‘‘Fairness,’’ the special committee determined to increase the purchase price from $21.50 net per share to $22.50 net per share in the tender offer.’’
| |
| • | The first sentence of the first paragraph of the Section entitled ‘‘Fairness; Substantive Fairness for Tendering Holders of Preferred Shares’’ is hereby amended as follows: |
‘‘After further reviewing and evaluating the information provided by FBR in its presentation and considering the factors listed below, the special committee of the board of directors of Quanta determined to increase the purchase price in the tender offer from $21.50 net per share to $22.50 net per share.’’
| |
| • | Item 1 under the fourth paragraph of the Section entitled ‘‘Fairness; Substantive Fairness for Tendering Holders of Preferred Shares’’ is hereby amended as follows: |
‘‘1. Premium Over Recent Market Prices of Preferred Shares. On July 19, 2007, the date on which the special committee made its determination to increase the offering price, it
2
considered that the offering price of $22.50 net per share represents a 22.1% premium compared to the 30-day volume-weighted average price per share of $18.42 as of June 1, 2007, the last trading day prior to our announcement of the tender offer. The special committee also considered that the offering price represents a 28.1% premium compared to the closing price of $17.57 on June 1, 2007, the last trading day prior to our announcement of the tender offer. See ‘‘Price Range of Shares; Dividends’’ in the Offer to Purchase.’’
| |
| • | Item 3 under the first paragraph of the Section entitled ‘‘Fairness; Procedural Fairness’’ is hereby amended by as follows: |
‘‘3. The tender offer allows each holder of Preferred Shares the opportunity to sell the holder’s shares at a 28.1% premium over the closing price on June 1, 2007, the last trading day before we announced the tender offer, and without the usual transaction costs associated with open market sales.’’
| |
| • | The last paragraph in the Section entitled ‘‘Fairness; Summary of Financial Presentation; Comparable Transactions’’ is hereby amended by adding the following sentence immediately following the third sentence of such paragraph, which will read as follows: |
‘‘After further reviewing and evaluating the information originally provided by FBR in its May 23, 2007 presentation, and considering the factors listed above under ‘‘Fairness’’, the special committee determined to increase the purchase price in the tender offer from $21.50 net per share to $22.50 net per share.’’
TERMS OF THE TENDER OFFER
| |
| • | The Section entitled ‘‘Procedure for Tendering Shares’’ is hereby amended and supplemented by inserting the following paragraph at the end of such Section: |
‘‘Holders of Preferred Shares tendering their shares may continue to use (i) the Original Letter of Transmittal previously circulated with the Original Offer to Purchase or (ii) the Amended Letter of Transmittal circulated with this Supplement. Holders of Preferred Shares tendering their shares according to the guaranteed delivery procedures set forth in the Offer to Purchase may do so using (i) the notice of guaranteed delivery previously circulated with the Original Offer to Purchase or (ii) the Amended Notice of Guaranteed Delivery circulated with this Supplement.
Although the Original Letter of Transmittal and notice of guaranteed delivery previously circulated refer only to the Original Offer to Purchase (and an offer price of $21.50 per share), holders of Preferred Shares using such Original Letter of Transmittal and notice of guaranteed delivery to tender their shares will nevertheless be deemed to be tendering pursuant to the Offer to Purchase and will receive the offer price of $22.50 per share, net to the seller in cash, without interest and less required withholding taxes, for each Preferred Share validly tendered and not properly withdrawn and accepted for payment pursuant to the tender offer, subject to the terms and conditions of the Offer to Purchase.
Shares previously tendered pursuant to the Original Letter of Transmittal and not withdrawn constitute valid tenders for purposes of the tender offer. Holders of Preferred Shares who have validly tendered and not withdrawn their Preferred Shares are not required to take any further action with respect to such Shares in order to receive the offer price of $22.50 per share if the Preferred Shares are accepted for payment and paid for by Purchaser pursuant to the tender offer, except as may be required by the guaranteed delivery procedure if such procedure was utilized.
If you have not already tendered your Preferred Shares, please disregard the materials that accompanied the Original Offer to Purchase previously delivered to you and use the materials accompanying this Supplement.’’
3
PRICE RANGE OF SHARES; DIVIDENDS
| |
| • | The first paragraph of the Section entitled ‘‘Market Information’’ is hereby amended and restated in its entirety as follows: |
‘‘The Preferred Shares have been traded on the NASDAQ Global Market under the symbol ‘‘QNTAP’’ since they were issued on December 20, 2005. On June 1, 2007, the last trading day before we announced the tender offer, the closing price of the Preferred Shares on the NASDAQ Global Market was $17.57 per share. On July 18, 2007, the closing price of the Preferred Shares was $21.99 per share. The following table contains, for the periods indicated, the high and low sales prices per Preferred Shares:
| |
| • | The last row in the table contained in the Section entitled ‘‘Market Information’’ is hereby amended and restated in its entirety as follows: |
| | | | | | | | | | | | |
| ‘‘Third Quarter (through July 18) | | | | | 22.23 | | | | | | 20.10 | |
SOURCE AND AMOUNT OF FUNDS
| |
| • | The first sentence of the first paragraph is hereby amended and restated in its entirety to read as follows: |
‘‘Assuming that Purchaser purchases all of the Preferred Shares in the tender offer, the total funding required by Purchaser to purchase such shares will be approximately $72,936,813 including fees and other expenses.’’
FEES AND EXPENSES
| |
| • | The last paragraph is hereby amended and restated in its entirety to read as follows: |
‘‘Additional fees and expenses that we expect to incur and pay in connection with the tender offer, the proxy solicitation and the special general meeting include:
| | | | | | |
| ‘‘Legal Fees | | | | $ | 450,000 | |
| Printing | | | | | 75,000 | |
| Filing Fee | | | | | 2,162 | |
| Miscellaneous | | | | | 10,000 | |
| Total | | | | $ | 537,162 | |
FINANCIAL INFORMATION
| |
| • | The Section entitled ‘‘Pro Forma Information’’ is hereby amended and restated in its entirety to read as follows: |
Pro Forma Information
The following unaudited pro forma condensed balance sheets of Quanta as of March 31, 2007 and unaudited pro forma condensed statements of operations for the year ended December 31, 2006 and the three months ended March 31, 2007 have been presented to give effect to the tender offer and the purchase of all of the Preferred Shares and their subsequent cancellation and have been adjusted for certain costs and expenses to be incurred as a result of the purchase and cancellation of the Preferred Shares pursuant to this Offer to Purchase and Proxy Statement. The pro forma condensed statements of operations are presented as if the tender offer had been completed on January 1, 2006. The summary unaudited pro forma financial information for the year ended December 31, 2006 and the three months ended March 31, 2007 should be read in conjunction with the summary historical consolidated financial information included in this document. The unaudited pro forma condensed statement of operations data and balance sheet data are not necessarily indicative of the financial position or results of operations that would have been obtained had the tender offer been completed as of the dates indicated or that may be attained in the future.
4
The unaudited pro forma condensed consolidated financial information is derived from historical consolidated financial statements of Quanta and is incorporated by reference into this document. The pro forma financial information has been prepared in accordance with U.S. GAAP assuming the redemption and cancellation of the Preferred Shares has occurred on January 1, 2006 for statement of operations and balance sheet purposes.
Unaudited Pro Forma Condensed Statement of Operations
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Historical
January 1,
2006 to
December 31,
2006 | | | Adjustment
for tender
of preferred
shares(1) | | | Adjustment
for
preferred
dividend and
investment
income(2)(3) | | | Pro forma
January 1,
2006 to
December 31,
2006 |
| Revenues: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net premiums earned | | | | $ | 225,299 | | | | | $ | — | | | | | $ | — | | | | | $ | 225,299 | |
| Technical services revenues | | | | | 3,331 | | | | | | — | | | | | | — | | | | | | 3,331 | |
| Net investment income | | | | | 45,934 | | | | | | — | | | | | | (3,647 | ) | | | | | 42,287 | |
| Net realized losses on investments | | | | | (15,945 | ) | | | | | — | | | | | | — | | | | | | (15,945 | ) |
| Net foreign exchange losses | | | | | (3,790 | ) | | | | | — | | | | | | — | | | | | | (3,790 | ) |
| Other income | | | | | 3,654 | | | | | | — | | | | | | — | | | | | | 3,654 | |
| Total revenues | | | | | 258,483 | | | | | | — | | | | | | (3,647 | ) | | | | | 254,836 | |
| Expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net losses and loss expenses | | | | | 156,121 | | | | | | — | | | | | | — | | | | | | 156,121 | |
| Acquisition expenses | | | | | 42,540 | | | | | | — | | | | | | — | | | | | | 42,540 | |
| General and administrative expenses | | | | | 100,006 | | | | | | — | | | | | | — | | | | | | 100,006 | |
| Interest expense | | | | | 5,458 | | | | | | — | | | | | | — | | | | | | 5,458 | |
| Depreciation of fixed assets and amortization and impairment of intangibles assets | | | | | 4,999 | | | | | | — | | | | | | — | | | | | | 4,999 | |
| Total expenses | | | | | 309,124 | | | | | | — | | | | | | — | | | | | | 309,124 | |
| Loss from continuing operations before income taxes | | | | | (50,641 | ) | | | | | — | | | | | | (3,647 | ) | | | | | (54,288 | ) |
| Income tax expense | | | | | 14 | | | | | | — | | | | | | — | | | | | | 14 | |
| Net loss from continuing operations | | | | | (50,655 | ) | | | | | — | | | | | | (3,647 | ) | | | | | (54,302 | ) |
| Discontinued operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Loss from operations of discontinued operations | | | | | (12,953 | ) | | | | | — | | | | | | — | | | | | | (12,953 | ) |
| Income on disposal of discontinued operations | | | | | 704 | | | | | | — | | | | | | — | | | | | | 704 | |
| Net loss from discontinued operations | | | | | (12,249 | ) | | | | | — | | | | | | — | | | | | | (12,249 | ) |
| Net loss | | | | | (62,904 | ) | | | | | — | | | | | | (3,647 | ) | | | | | (66,551 | ) |
| Net gain on tendered mandatorily redeemed preferred shares | | | | | — | | | | | | 2,061 | | | | | | — | | | | | | 2,061 | |
| Dividends on preferred shares | | | | | (1,916 | ) | | | | | — | | | | | | 1,916 | | | | | | — | |
| Net (loss) income to common shareholders | | | | $ | (64,820 | ) | | | | $ | 2,061 | | | | | $ | (1,731 | ) | | | | $ | (64,490 | ) |
5
Unaudited Pro Forma Condensed Statement of Operations
| | | | | | | | | | | | | | | | | | |
| | | | Historical
January 1,
2006 to
December 31,
2006 | | | Adjustment
for tender
of preferred
shares(1) | | | Adjustment
for
preferred
dividend and
investment
income(2)(3) | | | Pro forma
January 1,
2006 to
December 31,
2006 |
| Weighted average common share and common share equivalents outstanding basic and diluted | | | | | 69,971,646 | | | | | | | | | | | | 69,971,646 | |
| Loss from continuing operations per common share basic and diluted | | | | $ | (0.75 | ) | | | | | | | | | | $ | (0.75 | ) |
| Loss from discontinued operations per common share basic and diluted | | | | $ | (0.19 | ) | | | | | | | | | | $ | (0.19 | ) |
| Income from disposal of discontinued operations per common share basic and diluted | | | | $ | 0.01 | | | | | | | | | | | $ | 0.01 | |
| Net loss per common share basic and diluted | | | | $ | (0.93 | ) | | | | | | | | | | $ | (0.93 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Historical
January 1,
2007 to
March 31,
2007 | | | Adjustment
for tender
of preferred
shares(1) | | | Adjustment
for
investment
income(3) | | | Pro forma
January 1,
2007 to
March 31,
2007 |
| Revenues: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net premiums earned | | | | $ | 25,637 | | | | | $ | — | | | | | $ | — | | | | | $ | 25,637 | |
| Technical services revenues | | | | | 492 | | | | | | — | | | | | | — | | | | | | 492 | |
| Net investment income | | | | | 11,805 | | | | | | — | | | | | | (912 | ) | | | | | 10,893 | |
| Net realized gains on investments | | | | | 1,886 | | | | | | — | | | | | | — | | | | | | 1,886 | |
| Net foreign exchange gains | | | | | 264 | | | | | | — | | | | | | — | | | | | | 264 | |
| Other income | | | | | 1,051 | | | | | | — | | | | | | — | | | | | | 1,051 | |
| Total revenues | | | | | 41,135 | | | | | | — | | | | | | (912 | ) | | | | | 40,223 | |
| Expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net losses and loss expenses | | | | | 14,295 | | | | | | — | | | | | | — | | | | | | 14,295 | |
| Acquisition expenses | | | | | 5,199 | | | | | | — | | | | | | — | | | | | | 5,199 | |
| General and administrative expenses | | | | | 14,968 | | | | | | — | | | | | | — | | | | | | 14,968 | |
| Interest expense | | | | | 1,393 | | | | | | — | | | | | | — | | | | | | 1,393 | |
| Depreciation of fixed assets and amortization and impairment of intangibles assets | | | | | 677 | | | | | | — | | | | | | — | | | | | | 677 | |
| Total expenses | | | | | 36,532 | | | | | | — | | | | | | — | | | | | | 36,532 | |
| Loss from continuing operations before income taxes | | | | | 4,603 | | | | | | — | | | | | | (912 | ) | | | | | 3,691 | |
| Income tax expense | | | | | (25 | ) | | | | | — | | | | | | — | | | | | | (25 | ) |
| Net income to common shareholders | | | | $ | 4,628 | | | | | $ | — | | | | | $ | (912 | ) | | | | $ | 3,716 | |
| Weighted average common share and common share equivalents outstanding basic and diluted | | | | | 70,008,185 | | | | | | | | | | | | 70,008,185 | |
| Income per common share basic and diluted | | | | $ | 0.06 | | | | | | | | | | | $ | 0.05 | |
6
Unaudited Pro Forma Condensed Balance Sheet
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Historical as
at March 31,
2007 | | | Adjustment for
tender of
preferred
shares(1) | | | Adjustment for
preferred
dividend
investment
income(2)(3) | | | Pro forma
as at
March 31,
2007 |
| Assets | | | | | | | | | | | | | | | | | | | | | | | | |
| Investments at fair value (amortized cost: March 31, 2007, $745,155) | | | | | | | | | | | | | | | | | | | | | | | | |
| Trading investments | | | | $ | 740,315 | | | | | $ | (72,937 | ) | | | | $ | (4,559 | ) | | | | $ | 662,819 | |
| Total investments at fair value | | | | | 740,315 | | | | | | (72,937 | ) | | | | | (4,559 | ) | | | | | 662,819 | |
| Cash and cash equivalents | | | | | 84,415 | | | | | | — | | | | | | 1,916 | | | | | | 86,331 | |
| Restricted cash and cash equivalents | | | | | 120,073 | | | | | | — | | | | | | — | | | | | | 120,073 | |
| Accrued investment income | | | | | 5,197 | | | | | | — | | | | | | — | | | | | | 5,197 | |
| Premiums receivable | | | | | 40,802 | | | | | | — | | | | | | — | | | | | | 40,802 | |
| Funds withheld by cedants | | | | | 22,681 | | | | | | — | | | | | | — | | | | | | 22,681 | |
| Losses and loss adjustment expenses recoverable | | | | | 176,058 | | | | | | — | | | | | | — | | | | | | 176,058 | |
| Other accounts receivable | | | | | 670 | | | | | | — | | | | | | — | | | | | | 670 | |
| Net receivable for investments sold | | | | | 166 | | | | | | — | | | | | | — | | | | | | 166 | |
| Deferred acquisition costs, net | | | | | 14,745 | | | | | | — | | | | | | — | | | | | | 14,745 | |
| Deferred reinsurance premiums | | | | | 29,426 | | | | | | — | | | | | | — | | | | | | 29,426 | |
| Software, property and equipment, net of accumulated depreciation of $7,611 | | | | | 476 | | | | | | — | | | | | | — | | | | | | 476 | |
| Goodwill and other intangible assets | | | | | 7,175 | | | | | | — | | | | | | — | | | | | | 7,175 | |
| Other assets | | | | | 40,399 | | | | | | — | | | | | | — | | | | | | 40,399 | |
| Total assets | | | | $ | 1,282,598 | | | | | $ | (72,937 | ) | | | | $ | (2,643 | ) | | | | $ | 1,207,018 | |
| Liabilities | | | | | | | | | | | | | | | | | | | | | | | | |
| Reserve for losses and loss expenses | | | | $ | 603,494 | | | | | $ | — | | | | | $ | — | | | | | $ | 603,494 | |
| Unearned premiums | | | | | 104,122 | | | | | | — | | | | | | — | | | | | | 104,122 | |
| Environmental liabilities assumed | | | | | 2,892 | | | | | | — | | | | | | — | | | | | | 2,892 | |
| Reinsurance balances payable | | | | | 32,005 | | | | | | — | | | | | | — | | | | | | 32,005 | |
| Accounts payable and accrued expenses | | | | | 27,852 | | | | | | — | | | | | | — | | | | | | 27,852 | |
| Deposit liabilities | | | | | 37,784 | | | | | | — | | | | | | — | | | | | | 37,784 | |
| Deferred income and other liabilities | | | | | 4,711 | | | | | | — | | | | | | — | | | | | | 4,711 | |
| Junior subordinated debentures | | | | | 61,857 | | | | | | — | | | | | | — | | | | | | 61,857 | |
| Total liabilities | | | | | 874,717 | | | | | | — | | | | | | — | | | | | | 874,717 | |
| Mandatorily redeemable preferred shares | | | | | | | | | | | | | | | | | | | | | | | | |
| ($0.01 par value; 25,000,000 shares authorized; 3,130,525 issued and outstanding at March 31, 2007) | | | | | 74,998 | | | | | | (74,998 | ) | | | | | — | | | | | | — | |
| Shareholders’ equity | | | | | | | | | | | | | | | | | | | | | | | | |
Common shares
($0.01 par value; 200,000,000 shares authorized; 70,008,185 at March 31, 2007) | | | | | 700 | | | | | | — | | | | | | — | | | | | | 700 | |
| Additional paid-in capital | | | | | 582,623 | | | | | | — | | | | | | — | | | | | | 582,623 | |
| Accumulated deficit | | | | | (249,181 | ) | | | | | 2,061 | | | | | | (2,643 | ) | | | | | (249,763 | ) |
| Accumulated other comprehensive loss | | | | | (1,259 | ) | | | | | — | | | | | | — | | | | | | (1,259 | ) |
| Total shareholders’ equity | | | | | 332,883 | | | | | | 2,061 | | | | | | (2,643 | ) | | | | | 332,301 | |
| Total liabilities, redeemable preferred shares and shareholders’ equity | | | | $ | 1,282,598 | | | | | $ | (72,937 | ) | | | | $ | (2,643 | ) | | | | $ | 1,207,018 | |
| (1) | The adjustment for tendered Preferred Shares assumes that the Preferred Shares were redeemed at a price of $22.50 per share. The calculation of the net gain on tendered Preferred Shares of $2,061,024, is calculated as the difference between the gross proceeds of $70,436,813 and the issued price of $78,263,125, less capitalized offering costs of $3,265,288 and estimated costs in connection with the tender offer of $2,500,000. This adjustment assumes the Preferred Shares would have been redeemed using funds from our investment portfolio. |
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| (2) | On March 15, 2006 the company paid a dividend on the Preferred Shares of $1,915,568. This adjustment assumes this dividend would not have been paid. |
| (3) | Reflects adjustment for the investment income that otherwise would not have been recognized had the Preferred Shares been redeemed on January 1, 2006 and is calculated as the product of investments assumed to have been used on redemption and an investment yield of 5.0%. The assumed investment yield is equal to our historical investment yield for the year ended December 31, 2006 and for the three months ended March 31, 2007. |
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Manually signed facsimiles of the Letter of Transmittal, properly completed, will be accepted. The Letter of Transmittal and certificates evidencing Preferred Shares and any other required documents should be sent or delivered by each shareholder or by the shareholder’s broker, dealer, commercial bank, trust company or other nominee to the depositary at one of its addresses set forth below.
The Depositary for the Offer is:
The Bank of New York
For Information Call:
(800) 507-9357
| | | | | | |
By Mail:
The Bank of New York
Reorganization Services
Quanta Capital Holdings Ltd.
P.O. Box 11248
New York, NY 10286-1248 | | | By Facsimile Transmission:
(For Eligible Institutions Only)
(212) 815-6433
To Confirm Facsimile
Transmissions:
(212) 815-6212
(For Confirmation Only) | | | By Hand or Overnight Courier:
The Bank of New York
Reorganization Services
101 Barclay Street
Receive and Deliver Window
Street Level
New York, NY 10286 |
Questions or requests for assistance may be directed to the information agent at its address and telephone numbers, or the dealer-manager at its telephone number, in each case, as set forth below. Requests for additional copies of this Supplement, the Offer to Purchase, the Letter of Transmittal and the notice of guaranteed delivery may be directed to Georgeson Inc., the information agent, and copies will be furnished promptly at Purchaser’s expense. Holders of Preferred Shares may also contact their brokers, dealers, commercial banks, trust companies or other nominees for assistance concerning the tender offer and the proxy solicitation.
The Information Agent and Co-Solicitation Agent for the Offer is:
Georgeson Inc.
17 State Street, 10th Floor,
New York,
NY 10004
(888) 605-7527
The Dealer-Manager and Co-Solicitation Agent for the Offer is:
Friedman, Billings, Ramsey & Co., Inc.
703-875-1499
866-779-4943 (toll free)
