(Reuters) - Catlin Group Ltd, operator of the biggest syndicate in the Lloyd’s of London insurance market, said it received a takeover approach from XL Group Plc that valued the company at 2.53 billion pounds ($3.98 billion).
The Bermuda-based insurer said XL had indicated a possible offer of 410 pence in cash and 0.130 share for each Catlin share.
This values Catlin at 699 pence per share, representing a 20 percent premium to the stock’s Tuesday close.
Catlin’s shares rose as much as 17 percent to a record high of 679.50 pence on the London Stock Exchange on Wednesday. The stock was the top percentage gainer on London’s FTSE-250 Midcap Index.
XL’s shares were down 3.7 percent at $33.72 in opening trading on the New York Stock Exchange.
If the deal goes through, Catlin will not pay a final dividend for the year, said the company, which provides insurance for everything from flooding to kidnapping.
Catlin also said it was in advanced talks to sell its interest in telematics-based car insurer Box Innovation Group Ltd. Any surplus cash generated from a potential sale will be distributed to shareholders in addition to the possible offer from XL, Catlin said.
($1 = 0.64 pounds)
Reporting by Esha Vaish in Bengaluru; Editing by Saumyadeb Chakrabarty and Kirti Pandey