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CHICAGO--Apax Partners and Morgan Stanley Principal Investments have upped the ante to purchase Hub International Ltd. following bids from other suitors wanting to purchase the publicly held Chicago brokerage.
The private equity firms offered Hub shareholders $41.50 in cash per common share, up from the firms' original offer of $40, Hub said Thursday.
"The increased consideration followed receipt by Hub of competing proposals," Hub said in a statement.
The deal, which includes assumption of $145 million in debt, is now valued at $1.9 billion, up from the original value of $1.8 billion, according to Business Insurance estimates.
According to a U.S. Securities and Exchange Commission filing, the private equity agreement contained a "go shop" provision in which Hub had the right to solicit and engage in discussions and negotiations with competing proposals through March 19.
Hub may continue discussions with interested parties that submitted written proposals during the "go shop" period after March 19 if the board of directors determines the offer to be a bona fide, good faith offer and that the consideration is comparable to the existing Apax offer, the filing says. In all other cases, Hub now is subject to a "no shop" restriction in its ability to solicit third-party proposals.
In the event the amended agreement is terminated under specified circumstances, Hub is obligated to pay a breakup fee of 3% of the equity value of the transaction or $53 million, Hub said.
The transaction is expected to be completed toward the end of the second quarter, subject to shareholder approval.
Hub did not immediately return calls seeking further comment.