Zacks Investment Research upgraded shares of Tower Group International, Inc. (TWGP) from UNDERPERFORM to NEUTRAL on July 10, 2014, with a target price of $2.00.
We are upgrading our recommendation on Tower Group to Neutral from Underperform to reflect our optimism on the proposed merger with ACP Re. The merger will not only pay off the current shareholders handsomely, but will also shape a brighter future for the company. Tower Group fell victim of its accounting fallacies by keeping aside a thin cushion of reserve to pay out claims. The embattled insurer consequently witnessed capital drain, reserve shortfall, job cuts, stake divestiture in Canopius and cancellation of the previously announced acquisition of American Safety Reinsurance, Ltd. (ASRe), quitting of CEO as well as ratings' downgrade. The merger terms with ACP has also been amended to a lower per share cash payment to $2.50 from $3.00. However, there is widespread doubt about the likelihood of the deal. In May, the company hired Greenhill & Co. for advice on repaying debt if the takeover collapses.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
To get a free copy of the research report on Tower Group International, Inc. (TWGP),
click here.
For more information about research offerings from Zacks Investment Research, visit
Zacks.com .
Be the first to comment