UPDATE 1-Max Capital to merge with Harbor Point

Wed Mar 3, 2010 5:10pm EST

* Harbor shareholders to own about 52 pct of combined co

* Cos to declare a special cash dividend of $2.50/shr

March 3 (Reuters) - Max Capital Group Ltd MXGL.O and privately held reinsurer Harbor Point Ltd agreed to merge, in a deal that would give Harbor shareholders a 52 percent stake in the combined company.

Under the terms, shareholders of Harbor Point will receive 3.7769 of Max common share for each share they own.

The Bermuda-based companies intend to declare a special cash dividend of $2.50 a share upon closing the deal.

Following the merger, the combined company will be renamed as Alterra Capital Holdings Ltd and will be listed on Nasdaq under the symbol "ALTE." Max Chief Executive Marston Becker will serve as the CEO of the new company.

Earlier in the day, Reuters had reported about the impending deal, citing a source familiar with the matter. [ID:nN03254520]

Harbor Point was formed in late 2005 by a group of investors led by the Chubb Corp (CB.N) and private equity firm Stone Point Capital, according to its website.

It writes property, casualty and specialty reinsurance and when it was formed it acquired the operations of Chubb Re, including the renewal rights to Chubb Re's in force book of assumed reinsurance business.

For Max Capital, the deal comes after its bid last year to buy Bermuda reinsurer IPC Holdings Ltd was derailed by Validus Holdings Ltd (VR.N) after a months-long battle. [ID:nN09436999]

Max shares closed at $24.27 Wednesday on the New York Stock Exchange. (Reporting by Krishna N. Das in Bangalore; Editing by Ratul Ray Chaudhuri)

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