Enstar Group Limited (NasdaqGS:ESGR) is proposing to buy all of Watford Holdings Ltd. (NasdaqGS:WTRE)'s shares through a nonbinding proposal. The group, which now has a 9.1% stake in Watford, views Watford's current share price as undervaluing its true economic value, Enstar said in a filing with the U.S. Securities and Exchange Commission. "Based on the diligence and analysis done to date, our proposal is to pay $31.00 per ordinary share at closing" for Watford, Enstar said in the filing, which comprises a letter to Watford's board.

"The purchase price represents a premium to current market price of 35.1%. The form of consideration will be in 100% cash." Enstar said its purchase price is based on the assumption that the "key contracts" with Arch Capital Group and HPS Investment Partners would remain in place, "but we are willing to discuss the early termination of those agreements if that would be preferable to such parties." Watford's board of directors recently hired Morgan Stanley to help evaluate the company's strategic options, and according to the filing, Enstar is willing "to engage with Watford and its board to help provide a solution and are pleased to provide you with our non-binding indicative proposal for the acquisition of 100% of the ordinary share capital of Watford".