Brit Insurance Accepts Takeover Offer from Investment Fund

October 26, 2010

Brit Insurance Holdings NV has accepted an offer to be made by Achilles, an investment vehicle under formation in the Netherlands, for the acquisition of the company’s shares.

Brit, a Lloyd’s insurer, is domiciled in the Netherlands with its main operational headquarters in London.

Achilles will be majority-owned by funds managed by Apollo Management VII, L.P. and funds advised by CVC Capital Partners Limited. Apollo made an earlier offer to acquire Brit for £11 [$16.30 at the time] per share, which was rejected. That offer put the total value of the insurer at around $770 million [$1.142 billion at the time]. The new offer values Brit at up to £888 million ($1.407 billion).

Brit’s bulletin said that under the terms of the newly proposed offer “shareholders who accept the Offer will be eligible to receive up to £11.00 [$17.43] in cash per Brit Share Proposal, which comprises the Offer and the £0.30 [47.54 cents] Capital Distribution.” The offer will also involve a “Contingent Value Payment,” or CVP, of up to 25 pence (39.6 cents) per share, calculated “by reference to the extent to which Brit Insurance’s audited consolidated net tangible asset value as at 31 December 2010.”

Brit indicated that the “aggregate amount payable under the Proposal of £10.75 to £11.00 per Brit Share represents a premium of between approximately 47 percent to 51 percent to the Closing Price of £7.29 [$11.56] per Brit Share on 10 June 2010 (being the last Business Day prior to the commencement of the Offer Period).”

Source: Brit Insurance

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