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Insurance company Zurich has unveiled a proposal to acquire London-listed rival Beazley in a deal worth about £7.7 billion.
this Swiss The insurer said it had made a potential offer of 12.80 pounds per share, up from an earlier undisclosed offer of 12.30 pounds per share on January 4, which was rejected.
shares Beazley’s shares soared to a record high after the proposal became public, with shares surging 42% in afternoon trading on Monday, giving the FTSE 100 specialist insurer a market value of nearly £7bn.
Zurich said its latest offer represented a 56% premium to the value of Beazley’s shares on January 16, before the proposal became public.
Beazley said it had “yet not had the opportunity to consider” an improved approach and would update shareholders “in due course”.
It confirmed that the previous proposal had been rejected by the board “as it materially undervalued the company”.
Zurich believes that its proposed takeover offer “provides Beazley shareholders with immediate and certain cash value for their investment at a level that exceeds what Beazley can achieve within a reasonable period of time by executing its strategy”.
Zurich added: “The transaction will create a global leader in specialty insurance with approximately $15bn (£11.2bn) of gross written premiums, superior data availability and underwriting expertise, leading market and distribution capabilities and outstanding reinsurance and technology infrastructure.
“The combination of these two highly complementary businesses will create a leading global specialist platform headquartered in the UK, which will also leverage Beazley’s Lloyd’s of London Be present. “
Zurich said it will fund the transaction through existing cash and debt facilities, with the balance provided through an equity placement.
The company has until February 16 to make a formal bid for Beazley, the insurance company of Lloyd’s of London, or abandon the bid under the rules of the UK’s Takeovers Commission.
Zurich has more than 63,000 employees and is headquartered in Switzerland.
Beazley is a specialist insurer offering emerging cyber insurance products and covering professional indemnity, property, marine, reinsurance, accident and life, political risk and contingency.