Catlin Group boss and founder Stephen Catlin stands to reap more than £40m if rival insurance firm XL Group is successful in taking over the massive Lloyd’s insurer.
Shares in the group soared by as much as 17 per cent yesterday after the company confirmed that it was in talks with XL over a £2.7bn takeover. Bermuda-based Catlin Group, whose shares ended the day up over 10 per cent at 645p, was forced to make the announcement following a leak to the media.
The proposed deal would see New York-listed XL, which is headquartered in Dublin, pay 699p each for 386m shares.
One City source said this was a “decent premium” given Catlin’s previous share performance.
Stephen Catlin, who holds approximately 1.7 per cent of the company’s shares, will hold a stake worth around £44m if the deal completes. He is planning to remain with the company, and would take on the role of executive deputy chairman in the combined firm.
A source close to the transaction said they believed there were no other bidders preparing an offer for Catlin, and added that the firm would be expected to register in the same country as XL if the deal goes through. XL chief executive Mike McGavick said both firms could “see meaningful opportunity in this transaction”.
“Both XL and Catlin – respected, innovative, global P&C firms – are well positioned on their own,” he added. “However, we both believe that we will be far better positioned and stronger together. We see this transaction as deeply accelerating the strategies of both companies. The proposed transaction is expected to result in attractive economies starting in the first year and long-term value for shareholders.”
Catlin Group said: “A combination of XL and Catlin would create a leading player in property and casualty insurance and reinsurance and expand opportunities for the combined underwriting team in the global marketplace.”
Catlin also said there could be no certainty that the discussions will lead to any transaction.