The Swiss insurer went public today with a possible £7.7bn ($10.3bn) cash bid for Beazley, lifting the price after an initial approach was rejected by the London-listed specialty carrier

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Zurich has revealed a possible £7.7bn cash bid for Beazley, lifting the price after its initial approach was rejected by the London listed specialty insurer.

The Swiss firm said it has submitted an improved proposal to acquire 100 percent of Beazley, offering 1,280 pence in cash per share.

The proposal represents a 56 percent premium to Beazley’s closing share price of 820 pence on 16 January, the last business day before the submission of the offer.

The price also equates to a 56 percent premium to the 30 day volume weighted average share price, a 27 percent premium to the median sell side analyst target price, and a 32 percent premium to Beazley’s previous all time high.

Zurich said its offer was designed to facilitate prompt engagement and provides full value for Beazley across all relevant metrics.

Beazley’s board rejected an earlier proposal of 1,230 pence per share on 16 January, saying it significantly undervalued the company.

Zurich said its latest proposal delivers immediate and certain cash value for shareholders at a level it believes exceeds what Beazley could achieve over a reasonable timeframe through the execution of its standalone strategy.

The insurer said the transaction would create a global specialty insurance group with around $15bn of gross written premiums, combining underwriting expertise, data capabilities, distribution and reinsurance infrastructure.

The combined business would be based in the UK, Zurich said, and would leveraging Beazley’s presence in the Lloyd’s market.

Zurich added that the acquisition would be funded through existing cash, new debt facilities and an equity placing, and would be accretive to its 2027 financial targets.

The announcement was made under Rule 2.4 of the UK Takeover Code and does not constitute a firm intention to make an offer.

Zurich has until 5pm London time on 16 February to either announce a firm intention to make an offer or confirm that it does not intend to proceed, unless the deadline is extended by the Takeover Panel.

 

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