A consortium led by insurer Arch Capital Group Ltd has made an approximately $500 million offer to acquire reinsurance firm Watford Holdings Ltd , people familiar with the matter said on Tuesday.

The bid comes more than a year after Watford went public. Since then, its shares have lost about a third of their value as investors questioned the company’s ability to generate enough from investment returns to adequately cover its expenses as it paid out on insurance policies. Activist investor Capital Returns Management LLC called in May for Watford to be sold.

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Arch has partnered with private equity firms to offer about $26 per share for Watford, the sources said. Watford shares ended trading in New York on Tuesday at $17.87.

Watford has retained investment bank Morgan Stanley to review the offer and decide on its next steps, the sources added.

The sources cautioned that no deal is certain and asked not to be identified because the matter is confidential. A representative of Arch Capital declined comment. Watford Holdings and Morgan Stanley did not immediately respond to requests for comment.

Bermuda-based Watford offers property and casualty insurance and reinsurance services. Formed in 2014, it outsources its underwriting operations to Arch Capital, while much of its investment management is undertaken by hedge fund HPS Investment Partners under long term contracts.

Arch Capital is Watford‘s largest shareholder with a 12.6% stake, according to Refinitiv Eikon data.