Brit Insurance recommended on Friday shareholders accept an 850 million pound ($1.3 billion) offer after buyout firm CVC Capital Partners agreed to link up with original bidder Apollo Management.
Lloyd’s of London insurers, which offer cover against large-scale risks such as natural disasters, have emerged as potential takeover targets because cyclically low insurance prices have weighed heavily on their shares.
Brit Insurance agreed to open its books to Apollo in July after the U.S. private equity company raised its offer to 10.75 pounds a share having had two bids knocked back. A Brit Insurance spokesman told Reuters CVC came on board during Apollo’s due diligence.
“During the course of the due diligence that Apollo had been undertaking it became apparent that Apollo wouldn’t be able to do this on their own. CVC approached the board of Brit at that time and the board of Brit worked quite hard to get Apollo and CVC in a place where they could work together on this,” he said.
Brit Insurance said the offer from the Apollo, CVC consortium also valued the business at 10.75 pence per share, but included a provision through which shareholders would receive a further 25 pence per share should Brit’s net tangible asset value be more than 11 pounds per share at the end of 2010. The offer would be adjusted on a linear sliding scale should the NTA be between 10.75 and 11.00 pounds per share, it said. Shares in Brit Insurance closed unchanged at 989 pence per share, valuing the business at 782 million pounds.
Source : Reuters
