Fairfax Makes $686 Million Bid for Northbridge Shares

Correction: Yesterday, Canadian Insurance reported on its website that
Fairfax Financial Holdings is planning a $686-million bid to extend its
stake in Northbridge Financial Corp. The story incorrectly cited the
price that Fairfax will offer for the remaining shares in Northbridge.
The proposed offer price is $39.00, not $36.00 as reported. Canadian
Insurance apologizes for the error.

Fairfax Financial Holdings is planning a $686-million bid to extend its stake in Northbridge Financial Corp.

At present, Fairfax owns 63.1% of the commercial insurance group’s
common shares, and this week, the company announced it will offer $39
a share for the remaining 36.9% it doesn’t already own. Once the
deal goes through—the formal offer should close in the first quarter
of 2009, according to a Fairfax statement—Northbridge would become
a wholly-owned subsidiary. However, it will continue to run on a standalone
basis, similar to Crum & Forster, Fairfax’s U.S. insurance
operations, Prem Watsa, Fairfax chairman and CEO, said in the statement.
Watsa also noted that Mark Ram, Northbridge’s president and CEO,
would continue to run its operations.

A formal offer to Northbridge shareholders will go out as soon as possible, and its board of directors has already recommended that they accept the Fairfax offer.

This story was originally published by Canadian Insurance Top Broker.