Catlin, a Lloyds of London insurer, has received a £2.5bn takeover approach from America’s XL Group.
The Bermuda-based insurer’s shares had been strong on speculation of a possible deal as reported in the Financial Times, and it has just confirmed it is in talks aboutthe approach. XL is planning a possible offer of 410p a share in cash and 0.13 of its shares for each Catlin share, valuing it at 699p. But shareholders will not receive the final dividend if the deal goes ahead.
In the market Catlin is now up 11% or 66.5p at 648.5p.
Catlin also said it was in talks to sell its interest in car insurer Box Innovation Group, with any surplus cash going to the insurer’s shareholders on top of the offer terms.
Catlin said a combination of the two companies would “create a leading player in property and casualty insurance and reinsurance.”
Founder Stephen Catlin currently owns 1.68% of the shares, worth more than £40m.
This is the latest in a number of takeovers in the corporate insurer and reinsurer market, including Brit Insurance and Canopius.
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