James River dives on $175 mln stock offering

James River group

06/05/2021 14:23

** James River Group Holdings  JRVR.O  shares down ~30%
premarket at $32.60 after specialty insurer prices follow-on
    ** Co sells 5.65 mln shares at $31, raises $175.2 mln for
general corp purposes  urn:newsml:reuters.com:*:nGNX4tyWMh
    ** Offering prices at 33% discount to stock's Weds close
    ** After the bell Weds, co reported Q1 adj loss of $3.54
while Street consensus called for 63 cents/sh profit, per
Refinitiv data
    ** Co disclosed $170 mln "unfavorable development" in its
commercial auto segment, "primarily driven by a previously
canceled account that has been in runoff since 2019"
 urn:newsml:reuters.com:*:nGNX8dLJGh
    ** CEO said believes "this overhang has been eliminated, and
that we are now fully able to focus on our prospective business
and what continues to be a historically strong E&S marketplace"
    ** Barclays and KBW acting as jt bookrunners for equity
offering
    ** Deal size represents nearly 20% of co's free float, per
Refinitiv data
    ** Stock down 5.4% YTD through Weds close
    ** Avg rating among 7 analysts covering JRVR is "buy" and
median PT is $58 

 (Lance Tupper is a Reuters market analyst. The views expressed
are his own)
 ((lance.tupper.tr.com@reuters.net
lance.tupper@tr.com 1-332-219-1430))