LONDON: XL Group Public Limited Company will buy underwriter Catlin Group Limited for about 2.79 billion pounds ($4.22 billion), giving the Dublin based insurer and reinsurer a bigger chunk of the Lloyd’s of London market.
XL Group which has a market value of more than $9 billion had offered 2.53 billion pounds for Catlin.
The offer of 388 pence in cash and 0.13 new XL share values each Catlin share at about 715.3 pence a premium of 8.3 per cent to the stock’s close on Thursday.
XL Group’s shares were untraded before the bell in New York after closing at $35.42. The company’ shares fell as much as 4 per cent in December when news of its interest in Catlin emerged but they have since recovered.
Shares in Catlin, the biggest syndicate on the Lloyd’s underwriting floor, were trading at 690 pence in late morning business on the London Stock Exchange.
Catlin sells insurance for everything from flooding to kidnapping and is also headquartered in Bermuda, will pay a final dividend of 22 pence, reversing an earlier decision to forego the payout after the approach from XL Group.
Eamonn Flanagan, Shore Capital analyst said this bid both highlights the attractions of Lloyd’s for external players and increases the scarcity value for the remaining companies.
