Prospectus Supplement No. 2 dated May 10, 1999 Rule 424(b)(3)
To Prospectus dated August 14, 1998 File No.:333-60985
2,315,483 Shares
ACE Limited
Ordinary Shares
(par value $0.041666667)
All of the ordinary shares of ACE Limited, a Cayman Islands company,
offered hereby are being sold by the selling shareholders named herein. The
ordinary shares are listed on the New York Stock Exchange under the symbol
"ACL." On May 10, 1999, the last reported sales price of the ordinary shares
on the New York Stock Exchange was $31-15/16 per share.
Neither the Securities and Exchange Commission nor any other regulatory
body has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus supplement or the prospectus.
Any representation to the contrary is a criminal offense.
The ordinary shares will be purchased from the selling shareholders named
herein by J.P. Morgan Securities Inc., as underwriter, at a price of $31.00
per share (resulting in $71,779,973 aggregate net proceeds (before
expenses) to the selling shareholders). We will pay certain expenses of the
offering estimated at $100,000.
The ordinary shares may be offered by the underwriter from time to time in
one or more transactions (which may involve block transactions) on the
NYSE, in the over-the-counter market, through negotiated transactions or
otherwise at market prices prevailing at the time of the sale or at prices
otherwise negotiated, subject to prior sale, when, as and if delivered to
and accepted by the underwriter. See "Underwriting."
The selling shareholders have agreed to indemnify the underwriter against
certain liabilities, including liabilities under the Securities Act of
1933, as amended (the "Securities Act").
We expect delivery of and payment for the ordinary shares to occur on or
about May 13, 1999.
J.P. Morgan & Co.
May 10, 1999
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No person is authorized in connection with the offering to give any
information or to make any representation not contained or incorporated by
reference in this prospectus supplement or the accompanying prospectus, and
any information or representation not contained or incorporated herein or
therein must not be relied upon as having been authorized by us, the
selling shareholders or the underwriter. This prospectus supplement and the
accompanying prospectus relate solely to the ordinary shares and may not be
used or relied on in connection with any other offer or sale of our
securities. Neither this prospectus supplement nor the accompanying
prospectus constitutes an offer to sell or a solicitation of any offer to
buy by any person in any jurisdiction in which it is unlawful for such
person to make such an offer or solicitation. Neither the delivery of this
prospectus supplement nor the accompanying prospectus at any time nor any
sale made hereunder shall under any circumstance imply that the information
herein is correct as of any date subsequent to the date hereof.
No action has been or will be taken by us, the selling shareholders or the
underwriter that would permit a public offering of the ordinary shares or
possession or distribution of this prospectus supplement and the
accompanying prospectus in any jurisdiction where action for that purpose
is required, other than in the United States. Persons into whose possession
this prospectus supplement and the accompanying prospectus come are
required by us, the selling shareholders and the underwriter to inform
themselves about and to observe any restrictions as to the offering of the
ordinary shares and the distribution of this prospectus supplement and the
accompanying prospectus.
Selling Shareholders
This Supplement No. 2 supplements the information contained in the prospectus
of ACE Limited, a Cayman Islands company, dated August 14, 1998 as supplemented
by Prospectus Supplement No. 1 dated May 4, 1999.
We have been informed by Insurance Partners Charman (Bermuda), L.P., a
Bermuda limited partnership, and Insurance Partners Offshore
(Bermuda), L.P., a Bermuda limited partnership, that they have made
pro rata distributions (the "Distributions") of an aggregate of 7,952,613
ordinary shares to their direct and indirect partners (each a "Partner").
The 2,315,483 ordinary shares being offered by the selling shareholders
represent part of the ordinary shares registered on behalf of the Partners
in the prospectus as supplemented.
The following table sets forth the name of each selling shareholder and the
number of ordinary shares beneficially owned by each selling shareholder
before the offering, all of which are being offered hereby. We have been
informed by the selling shareholders that, except as set forth in the
footnotes to the table, none of the selling shareholders has held any
position, office or other material relationship with us or any of our
affiliates within the past three years other than as a result of his, her
or its ownership of ordinary shares (or securities convertible into or
exercisable for ordinary shares). None of the figures below for any selling
shareholder individually represents 1% or more of our outstanding ordinary
shares.
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Ordinary Shares
Name of Partner Beneficially Owned
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A.P. Development & Services Corporation 50,925
BancBoston Investments Inc. 127,313
Calconn Private Equities, L.P. 25,331
Cornerstone Private Equity, L.P. 318,282
Credit Suisse First Boston Fund Investments 1994, L.P. (1) 127,313
Guaranty National Insurance Company 19,097
Security Insurance Company of Hartford 44,560
JM Kaplan Fund, Inc. 18,999
Kaplan Choate Special Situations, L.P. 6,333
The Lincoln National Life Insurance Company (2) 254,626
National Academy of Sciences 25,331
Estate of Michael D. Palm 81,855
The Board of Trustees of the Leland Stanford Junior University 63,676
Sunapee Securities, Inc. 12,731
Trustees of the Estate of Bernice P. Bishop 318,282
Jay S. Ralph 1,591
Carol A. Rennie 1,910
Scott A. Roberts (3) 1,910
Richard E. Smith 1,591
IPC GenPar (Bermuda) MGP, Ltd. 428
IPC GenPar (Bermuda) SLP, Ltd. 396
Insurance Partners Charman (Bermuda), L.P. 5,815
R. David Andrews 6,043
John R. Monsky 5,186
Anthony P. Scotto 17,361
Ian G. Wallace 3,876
FW GenPar, Inc. 2,236
Thomas R. Delatour 346
Acadia Partners, L.P. 467,000
Bradford E. Bernstein 2,422
Arab Insurance Group (ARIG) 61,100
Artal Luxembourg S.A. 122,200
Bermuda Investors Limited 61,100
Dresdner Bank AG, Grand Cayman Branch 54,990
Insurance Partners Offshore (Bermuda), L.P. 2,953
IP/MCLP (Bermuda), Limited Partnership 375
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(1) An affiliate of Credit Suisse First Boston Fund Investments 1994,
L.P. served as a financial advisor to the Company in 1998 and
received customary fees for such services.
(2) In addition to the Ordinary Shares offered hereby, The Lincoln
National Life Insurance Company owns 3,100 Ordinary Shares of the
Company.
(3) Mr. Roberts is employed by Scudder Kemper, a firm that provides
money management services for Tempest Reinsurance Company Limited,
a subsidiary of ACE.
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Underwriting
Under the terms and subject to the conditions contained in a stock purchase
agreement dated the date of this prospectus supplement, J.P. Morgan
Securities Inc., the underwriter, has agreed to purchase, and the selling
shareholders have agreed to sell to it, the ordinary shares offered hereby.
Under the terms and conditions of the stock purchase agreement, the
underwriter is obliged to take and pay for all such ordinary shares, if any
are taken.
It is expected that all or a substantial portion of the ordinary shares
offered hereby may be sold by the underwriter to purchasers in one or more
transactions (which may involve block transactions) on the NYSE or on other
national securities exchanges on which the ordinary shares are traded or
otherwise. The distribution of the ordinary shares may also be effected
from time to time in special offerings, exchange distributions and/or
secondary distributions pursuant to and in accordance with the rules of the
NYSE or such other exchanges, in the over-the-counter market, in negotiated
transactions through the writing of options on the ordinary shares (whether
such options are listed on an options exchange or otherwise), or in a
combination of such methods at prevailing market prices or at negotiated
prices. The underwriter may effect such transactions by selling ordinary
shares to or through dealers, and such dealers may receive compensation in
the form of discounts, concessions or commissions from the underwriter
and/or the purchasers of such ordinary shares for whom they may act as
agents or to whom they may sell as principal.
In connection with the sale of the ordinary shares, the underwriter may
receive compensation from purchasers of the ordinary shares for whom it may
act as agent or to whom it may sell as principal in the form of commissions
or discounts, in each case in amounts which will not exceed those customary
in the types of transactions involved. The underwriter and any dealers that
participate in the distribution of the ordinary shares may be deemed to be
underwriters, and any discounts received by them from the Company and any
compensation received by them on resale of the ordinary shares by them may
be deemed to be discounts and commissions, under the Securities Act.
The selling shareholders have agreed to indemnify the underwriter against
certain liabilities, including liabilities under the Securities Act.
From time to time in the ordinary course of its business, the underwriter
and its affiliates have engaged in and may in the future engage in
commercial and/or investment banking transactions with us.
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