Billionaire investor Wilbur Ross has sold his entire 8.9 percent stake in Montpelier Re Holdings Ltd. back to the Bermuda reinsurer.

Montpelier announced after the close of regular New York Stock Exchange trading on Friday that it had purchased Mr. Ross's holding of nearly 6.9 million shares.

Mr. Ross, who has sat on the Montpelier board since his initial investment in the company in 2006, has also resigned his directorship, effective today.

The company paid $19 per share — or around $131 million — in a private transaction, giving Mr. Ross a seven percent premium on Friday's closing price of $17.74.

The shares purchased will be accretive to the company's book value and end Montpelier's share repurchase authorisation.

"We are very grateful to Wilbur for his wise counsel over the last four years," said Montpelier president and chief executive officer Christopher Harris.

"However, this unique opportunity enabled us to quickly and efficiently achieve our near-term share repurchase goals without market disruption.

"In addition, the share purchase is consistent with our focus on improving our capital and operating efficiency, and we are comfortable that our capital resources remain strong relative to our underwriting plans for 2010."

Mr. Ross said: "I have thoroughly enjoyed working with the company and have the utmost respect for its high-quality management team. We see the sale to the company as a very successful conclusion to our involvement."

In September last year, Mr. Ross told The Royal Gazette: "I believe both that the Bermuda companies are severely undervalued and that there should be consolidation among them."

Mr. Ross also owns an 8.7 percent stake in another Bermuda-based company, bond insurer Assured Guaranty.

Credit rating agency Standard & Poor's said the deal would have no impact on the company's A- (strong) rating.

"The $131 million share repurchase was significant, given that it constituted about eight percent of Montpelier's shareholders' equity at year-end 2009," S&P said in a statement released on Friday evening.

"Nevertheless, the company's capital adequacy remains strong and redundant at the current rating."

Montpelier earned net income of $463.5 million last year.

Including the shares purchased from Mr. Ross and affiliated funds, since February 16 this year, the company has repurchased a total of 7,755,202 common shares at an average price of $18.89 per share, leading to 70,803,395 shares remaining outstanding.