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Hedge fund to buy surplus lines insurer

Posted On: Jun. 11, 2007 12:00 AM CST

CHAPEL HILL, N.C.--Hedge fund D.E. Shaw has formed a Bermuda-based holding company to acquire James River Group Inc. for $575 million, the companies announced Monday.

Under terms of the agreement, however, James River will continue to solicit superior proposals during the next 55 days and can terminate the deal.

James River is a Chapel Hill, N.C.-based holding company that owns and manages specialty property/casualty underwriters including James River Insurance Co., which writes excess and surplus lines coverage. James River posted $297 million in gross written premiums and $277.8 million in net written premiums in 2006.

The transaction is expected to close during the second half of 2007, subject to regulatory and stockholder approval.

J. Adam Abram, president and chief executive officer of James River, said in a statement that after the transaction closes he anticipates that a new Bermuda-based reinsurance co. will be added to the James River group.

D.E. Shaw is based in New York.