Article Excerpt

FAIRFAX FINANCIAL HOLDINGS $396.80 (Toronto symbol FFH: SI Rating: Average) (416-367-2612; www.fairfax.ca; Shares outstanding: 19.7 million; Market cap: $7.8 billion) plans to buy the 27.4% of Odyssey Re Holdings Corp. (New York symbol ORH) that it doesn’t already own for $960 million U.S. Odyssey Re is a major worldwide underwriter of property and casualty reinsurance. Reinsurers sell insurance to insurance companies. This lets those companies offset large risks. To pay for the purchase, Fairfax will raise $1 billion U.S. by selling 2.9 million shares at $347.00 U.S. a share. Odyssey Re’s results rise and fall with the frequency of catastrophic events, such as hurricanes. But the company remains consistently profitable. As well, it has been able to raise the prices of many of its products as the economy improves. Earlier this year, Fairfax paid $375 million for the 36.4% of Northbridge Financial that it didn’t already own. Northbridge is one of Canada’s biggest commercial property and casualty insurers. It was also a recommendation of…

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