Buzz Stock of the Day – Specialty Underwriters Alliance (SUAI)

Shares of Specialty Underwriters Alliance, Inc. (Nasdaq: SUAI) were up more than 57 percent today after news that insurer Tower Group, Inc. (Nasdaq: TWGP) agreed to buy Specialty Underwriters Alliance for about $107 million in stock.

The Chicago-based property and casualty insurer will be able to better leverage its distribution network and gain new access to Tower’s A- rating by A.M. Best Co., Tower Group said.

“We are pleased to join forces with Tower, which has a strong track record in acquisitions and providing meaningful value to shareholders,” said Specialty Underwriters’ president and CEO, Courtney Smith. “After a careful review of our strategic alternatives, our board has concluded that this transaction provides our shareholders with the best opportunity to enhance shareholders’ value. In addition, our affiliation with Tower will allow us to improve our profitability and take advantage of the current market opportunities by accessing Tower’s A- rating by A.M. Best Company and strong capitalization.”

For 2010, including the effects of the Specialty Underwriters transaction, Tower projects its diluted earnings per share to be in a range between $3.50 and $3.70 per diluted share.

Both Tower and Specialty Underwriters will host a conference call at 10 a.m. EST on Tuesday, June 23, 2009 to discuss the transaction.

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Tags: BuzzStocks, SUAI, Underwriters

This entry was posted on Monday, June 22nd, 2009 at 3:08 pm by Brad and is filed under Financial Stocks. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.