US merger talks send insurer Catlin soaring
SHARES in Lloyd’s insurer Catlin jumped 10 per cent yesterday after a £2.5billion takeover approach from New York’s XL Group.
The FTSE 250 company, led by chief executive Stephen Catlin, said the proposed cash and shares deal would value its shares at 699p.
Consolidation among specialist corporate insurers and reinsurers is being driven by increased competition, squeezing premiums.
Last year, Japanese insurer Sompo bought Lloyd’s franchise Canopius for about £600million. Catlin said the terms of any offer are subject to mutual due diligence. There is no certainty that talks will lead to a deal.
Catlin shares rose 63p to 645p.
XL chief executive Mike McGavick said: “Both XL and Catlin – respected, innovative, global property and casualty firms – are well positioned on their own.
“However, we both believe that we will be far better positioned and stronger together. We see this transaction as deeply accelerating the strategies of both companies.
“Specifically, the combined entity would be a leader in the global specialty and property catastrophe markets and would make greater and more efficient use of both companies’ global networks and infrastructure.
“In the increasingly competitive reinsurance market, the combined company would be a top 10 player, thereby increasing alternative capital opportunities and overall relevance to clients and brokers.”
