Willis receives more Gryphon deal cash

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The Independent Online
WILLIS CORROON, the insurance broking group, received a second payment yesterday of pounds 5.1m from the sale of its stake in Gryphon Holdings, its US insurance business, as the underwriters to the offer exercised their options in order to satisfy demand for the shares, writes John Willcock.

Willis received a first payment of pounds 33m when it floated off its 55 per cent stake in Gryphon in the US and Canada last month.

The further payment came from the underwriters of the public offering - Smith Barney Shearson, Goldman Sachs and Lehman Brothers - which exercised their options over 8.3 per cent of Gryphon's capital.

The underwriters exercised their options at the initial public offering price of dollars 13 per share to cover over-allotments.

Willis's interest in Gryphon's issued ordinary shares is now reduced to 36.1 per cent.

Gryphon consists of two underwriting businesses, the Los Angeles-based Associated International Insurance Company and Calvert in Pennsylvania. They provide specialist cover for small and medium-sized companies.

Willis said at the time of the offering that it was pleased to get the sale away. The US insurance sector has underperformed badly recently and several insurers have had to cancel planned share offers.

The company is planning to use the proceeds of the sale to reduce its debt burden, which has been a heavy drag on its performance. Gross debt was recently put at pounds 163m.

Willis Corroon's shares finished the day unchanged at 229p.