Filed by CastlePoint Holdings, Ltd.
Pursuant to Rule 425 under the Securities Act of 1933, as amended, and deemed
filed pursuant to Rule 14a-12 under the Securities Exchange of 1934, as amended.
Subject Company: CastlePoint Holdings, Ltd.
(Commission File No.: 001-33374)
The following letter was delivered to Leon Cooperman on August 20, 2008:
August 20, 2008
Mr. Leon Cooperman
Chairman & Chief Executive Officer
Omega Advisors, Inc.
88 Pine Street, 31st Floor
New York, NY 10005
Dear Mr. Cooperman:
On behalf of the Special Committee of the Board of Directors of
CastlePoint we acknowledge your letter of August 7, 2008 to Michael Lee and wish
to respond regarding your current position on the proposed acquisition of
CastlePoint by Tower Group and your request to see the analysis done to support
the transaction.
The Special Committee reviewed carefully and extensively the
terms of the proposed Tower transaction as well as the standalone prospects of
CastlePoint. On the basis of our review, we concluded that the proposed
transaction is fair to and in the best interests of CastlePoint. As I am certain
you are aware, there are a number of federal securities laws provisions which
restrict our ability to share with you at this time the financial analysis that
we reviewed in the course of our deliberations. We will, however, provide this
information to all CastlePoint members in connection with the special general
meeting of members that will be held to consider the transaction.
CastlePoint and Tower Group intend to file a joint proxy
statement/prospectus in connection with the transaction within the next few
weeks. We are confident that document will contain the information you are
requesting, and we would ask for your patience and understanding while that
document is prepared.
Your letter indicated that you are positively disposed towards
Tower Group and that, besides your concern regarding price, are otherwise
positively disposed towards the transaction. Our Board of Directors and Special
Committee believe that this is an important opportunity for CastlePoint, and we
believe your questions will be answered once the definitive joint proxy
statement/prospectus has been filed with the Securities and Exchange Commission.
Sincerely,
/s/ Jan R. Van Gorder
---------------------
Jan R. Van Gorder
|
Chairman of the Special
Committee of the Board of
Directors of CastlePoint
Holdings, Ltd.
Cautionary Note Regarding Forward-Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for forward-looking statements. This press release or any other written or oral
statements made by or on behalf of CastlePoint and Tower Group, Inc. ("Tower")
may include forward-looking statements that reflect CastlePoint's and Tower's
current views with respect to future events and financial performance. All
statements other than statements of historical fact included in this press
release are forward-looking statements. Forward-looking statements can generally
be identified by the use of forward-looking terminology such as "may," "will,"
"plan," "expect," "project," "intend," "estimate," "anticipate," "believe" or
"continue" or their negative or variations or similar terminology. All
forward-looking statements address matters that involve risks and uncertainties.
Accordingly, there are or will be important factors that could cause the actual
results of CastlePoint, Tower, and the combined company to differ materially
from those indicated in these statements. The following factors, among others,
could cause or contribute to such material differences: the ability to obtain
governmental approvals or rulings on or regarding the transaction on the
proposed terms and schedule; the failure of the shareholders of CastlePoint or
the stockholders of Tower to approve the amalgamation; the failure to satisfy
the closing conditions to the transaction; the risk that the businesses will not
be integrated successfully or that such integration may be more difficult,
time-consuming or costly than expected; the risk that the revenue opportunities,
cost savings and other anticipated synergies from the merger may not be fully
realized or may take longer to realize than expected; disruption from the
amalgamation making it difficult to maintain relationships with customers,
employees, brokers and managing general agents(1); the risk that the U.S. or
Bermuda tax authorities may view the tax treatment of merger and/or the other
transactions contemplated by the merger agreement differently from CastlePoint
and Tower's tax advisors; costs relating to the transaction; ineffectiveness or
obsolescence of the business strategy due to changes in current or future market
conditions; increased competition on the basis of pricing, capacity, coverage
terms or other factors; greater frequency or severity of claims and loss
activity, including as a result of natural or man-made catastrophic events, than
the underwriting, reserving or investment practices of CastlePoint or Tower
anticipate based on historical experience or industry data; the ability to
obtain necessary governmental licenses; the ability to hire and retain executive
officers and other key personnel; the effects of acts of terrorism or war;
developments in the world's financial and capital markets that adversely affect
the performance of CastlePoint and Tower 's investments; changes in regulations
or laws applicable to CastlePoint, Tower and their respective subsidiaries,
brokers or customers, including tax laws in Bermuda and the United States;
acceptance of products and services, including new products and services;
changes in the availability, cost or quality of reinsurance and failure of
CastlePoint's or Tower's reinsurers to pay claims timely or at all; decreased
demand for CastlePoint or Tower's insurance or reinsurance products; the effects
of mergers, acquisitions and divestitures in the insurance and reinsurance
sectors; changes in rating agency policies or practices; changes in legal
theories of liability under CastlePoint and Tower's insurance policies or the
policies that it reinsures; changes in accounting policies or practices; and
changes in general economic conditions, including inflation and other factors.
Forward-looking statements speak only as of the date on which they are made, and
neither CastlePoint nor Tower undertake any obligation to update publicly or
revise any forward-looking statement, whether as a result of new information,
future developments or otherwise.
Additional Important Information About the Proposed Transaction and Where to
Find It:
This communication is being made in connection with the proposed business
combination involving CastlePoint and Tower. In connection with the proposed
transaction, CastlePoint and Tower will file a joint proxy statement/prospectus
with the Securities and Exchange Commission ("SEC"). INVESTORS AND SECURITY
HOLDERS OF CASTLEPOINT AND TOWER ARE URGED TO READ THE JOINT PROXY
STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC
CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.
Investors and security holders will be able to obtain copies of the joint proxy
statement/prospectus and any other relevant documents filed with the SEC by
CastlePoint and Tower, free of charge, through the website maintained by the SEC
at www.sec.gov. In addition, copies of the definitive proxy statement/prospectus
and any other relevant documents filed with the SEC by CastlePoint may be
obtained, free of charge, from CastlePoint by directing a request to:
CastlePoint Holdings, Ltd.,
Victoria Hall
11 Victoria Street
Hamilton HM 11 Bermuda
Joel Weiner, Senior Vice President and
Chief Financial Officer
441-294-6400, info@CastlePoint.bm
This communication shall not constitute an offer to sell or the solicitation of
an offer to buy the securities, nor shall there be any offer, solicitation or
sale of securities in any jurisdiction in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the securities
laws of such jurisdiction. No offering of securities shall be made except by
means of a prospectus meeting the requirements of Section 10 of the Securities
Act of 1933, as amended.
Participants in the Solicitation:
CastlePoint, Tower and certain of their respective directors and executive
officers may be deemed to be participants in the solicitation of proxies in
respect of the proposed transaction. Information regarding CastlePoint's
directors and executive officers is available in its Annual Report on Form 10-K
for the year ended December 31, 2007, which was filed with the SEC on March 31,
2008, and its proxy statement for its 2008 annual meeting of shareholders, which
was filed with the SEC on April 29, 2008. Information regarding Tower's
directors and executive officers is available in Tower's Annual Report on Form
10-K for the year ended December 31, 2007, which was filed with the SEC on March
14, 2008, and its proxy statement for its 2008 annual meeting of stockholders,
which was filed with the SEC on April 11, 2008. Additional information regarding
the participants in the proxy solicitation and a description of their direct and
indirect interests, by security holdings or otherwise, will be contained in the
definitive joint proxy statement/prospectus and any other relevant materials to
be filed with the SEC when they become available.
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