Arch Capital Group Ltd. announced the pricing of an underwritten public secondary offering of 6,381,410 common shares by certain American International Group Inc.-affiliated selling shareholders at $92.50 per share for an aggregate public offering price of about $590 million.
The common shares were issued upon conversion of 638,141 convertible preferred shares of Arch Capital received by AIG in connection with its sale of United Guaranty Corp. to Arch Capital.
The underwriters have been granted a 30-day option to purchase up to an additional 957,210 shares at the public offering price less underwriting discounts and commissions. Arch Capital will not receive any proceeds from the sale of the shares.
AIG will receive gross proceeds of about $590 million from the offering. Should the underwriters exercise their option in full, AIG would receive additional proceeds of approximately $89 million and would continue to own 542,420 convertible preferred shares. AIG's remaining stake is subject to a lock-up that will expire on Jan. 15, 2018.
The offering is subject to customary closing conditions and is expected to close June 14.
Barclays Capital Inc. and Wells Fargo Securities LLC are acting as joint book-running managers for the offering.