Quanta Capital to launch offer to purchase 10¼% preferreds at $20 per share

By Jennifer Chiou

New York, June 4 - Quanta Capital Holdings Ltd. said it made preliminary tender offer filings with the Securities and Exchange Commission to repurchase, through wholly owned subsidiary QCH Acquisition Ltd., any and all of its 10¼% series A perpetual preferred stock at $20.00 per share.

The offer price represents a 13.8% premium to the $17.57 closing price on June 1, the last trading day prior to the announcement of the tender offer.

The company issued a total of $78.26 million of the securities after the underwriter purchased an additional 130,525 shares at the offering price of $25.00 per share. Quanta Capital originally sold $75 million of the preferred shares on Dec. 15, 2005.

Once the tender offer begins, holders of the preferred shares will be given the opportunity to sell all or part of their preferred shares to QCH Acquisition with no commission at the offer price.

The company will fund the offer with cash on hand.

Quanta Capital also intends to solicit proxies from the holders of preferred shares at a special general meeting of the holders to approve an amendment to the certificate of designation of the shares to remove a provision that would permit holders of preferred shares to elect two members to the company's board of directors under certain circumstances.

The offer is conditioned upon the proposed amendment being approved as well as the tender of an undetermined number of preferred shares.

Quanta Capital said it expects to commence the tender offer and proxy solicitation simultaneously in July and to close the tender offer and hold the special meeting in August.

"We are making the tender offer in conjunction with and seeking the approval of the proposed amendment to the certificate of designation of the preferred shares because we believe it presents an attractive opportunity for the company that will simplify our capital structure, return available capital to the holders of preferred shares and enhance our financial flexibility," executive chairman James J. Ritchie said in a news release.

Friedman Billings Ramsey & Co., Inc. is the dealer manager and co-solicitation agent (703 875-1499). Georgeson, Inc. is the information agent (888 605-7527).

Quanta is a Hamilton, Bermuda-based provider of property and casualty insurance, reinsurance, risk assessment and risk consulting services.

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