Under the terms, XL would buy Catlin for 410 pence in cash and 0.130 XL share for each Catlin common share, the Bermuda- based insurer said in a statement today. Based on XL’s closing price yesterday, the offer values each Catlin share at 699 pence apiece. The stock jumped as much as 14 percent at 13:33 p.m. in London, the biggest advance since 2004.
Chief Executive Officer Mike McGavick has been reshaping Dublin-based XL, exiting a life reinsurance business and striking a deal this week to sell a stake in a home insurer to Progressive Corp. Catlin said in the statement that “discussions are currently ongoing” and there “can be no certainty” that talks will lead to any transaction.
With the pursuit of Catlin, he joins other insurers that are seeking deals to expand property-casualty coverage for commercial clients. RenaissanceRe Holdings Ltd. agreed last month to buy Platinum Underwriters Holdings Ltd. for about $1.9 billion to gain scale as established firms fend off competition from Wall Street investors.
XL slipped 26 cents to $34.75 in early trading at 8:41 a.m. in New York.
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