Hedge fund manager Daniel Loeb is locked in a dispute with investors over plans to convert his London-listed vehicle, Third Point Investors Limited (TPIL), into a Cayman Islands-based reinsurer according to a report by the Financial Times.
In May, TPIL proposed a reverse takeover of Malibu Life Reinsurance, a reinsurer created and capitalised by Loeb’s New York-based Third Point, a move that will test the UK’s new governance rules on related-party transactions. The deal would pivot TPIL away from its original role as a feeder fund into Loeb’s hedge fund strategies, instead targeting the fast-growing US fixed annuity market.
The proposal has sparked opposition from a group of shareholders, including Asset Value Investors, Staude Capital, and Metage Capital, who argue the transaction is risky, lacks transparency, and could disproportionately benefit Third Point’s hedge fund.
TPIL initially offered an all-share acquisition valuing Malibu Re at $68m, alongside a $75m tender for TPIL shares at a 12.5% discount to NAV. In July, this was replaced with a $136m redemption at a narrower 5% discount, though not all payments would be immediate. The changes failed to win over critics.
Supporters, including TPIL’s board and shareholders controlling 45% of voting rights, say the deal offers “a clear path to long-term shareholder value” and a rare opportunity to bring a quality reinsurance platform to London. Jefferies, acting as sponsor, issued the required FCA opinion that the deal was “fair and reasonable” — a conclusion the dissenters dispute, citing Jefferies’ long-standing ties to Loeb.
Under new FCA rules, Loeb’s 25% stake allows him to vote on the deal. The shareholder decision is expected after Thursday’s meeting, with the outcome likely to set an early precedent for how the UK’s updated related-party rules are applied in contentious transactions.
