Benfield shares soar. Benfield to become part of Aon Re Global.
Insurance broker Aon has made an accepted offer for reinsurance broker Benfield. The bid values Benfield, which is listed on the UK stock exchange, at £935m. Shares in Benfield were up over 30% in early trading today.
Aon will acquire Benfield for £3.50 per share in cash and assume £91m of Benfield net debt, representing an enterprise value of approximately £935 million ($1.75 billion) on a fully diluted basis.
The acquisition price of 350 pence per share represents a premium of over 29% to the closing price on Thursday.
Benfield would be integrated into Aon's existing resinsurance operations, Aon Re Global. Benfield's CEO Grahame Chilton, will become vice chairman of Aon Group.
The two sides said the expect the deal would mean savings from 2011 of £65m annually, mostly from shared administration. Aon said it would fund the purchase through cash on hand and expects it to close the deal by the end of the year. Credit Suisse acted as financial adviser to Aon. Merrill Lynch advised Benfield.