Montpelier Re Holdings Ltd., a provider of short-tail reinsurance and other specialty lines, has entered into a definitive agreement with Selective Insurance Group Inc. for the sale of Montpelier U.S. Insurance Co. (MUSIC), a U.S. E&S lines insurance business.

Montpelier says consideration for the transaction will reflect MUSIC’s net asset value at closing and will be payable in cash. Based on MUSIC’s net asset value at June 30, 2011, the transaction is valued at about $55 million and is expected to result in an increase to Montpelier’s current tangible book value per common share of about $0.24.

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