XL Group, Catlin agree on takeover offer

Lloyd's of London insurer Catlin Group Ltd. has agreed to a takeover offer worth more than GBP2.5 billion (USD3.8 billion) from XL Group plc , the New York-listed, Dublin-based buyer said recently.

The transaction will be the largest ever takeover of a Lloyd's of London insurer and end Catlin's three-decade run as an independent company. XL has agreed to pay 388 pence in cash and 0.13 of a share for each Catlin share, which translates into a price of 693 pence per share based on the buyer's Thursday closing price, XL said.

XL noted that the price is a 23.5 percent premium to Catlin's undisturbed share price as of December 16, 2014. It said that the merged entity will have UDS17 billion of total capital and about USD10 billion of net premiums, based on 2013 results, when XL raked in net premiums of USD6.3 billion, and Catlin about USD4 billion.

In London, the deal will extend Catlin's leadership of the Lloyd's of London specialty insurance market based on the merged entity's gross written premiums of $3.8 billion, which make it half as large again as nearest rival QBE Ltd. XL chief executive Mike McGavick will continue as CEO, while Catlin CEO and founder Stephen Catlin will become deputy chairman.