BRIT Insurance yesterday accepted a formal offer from private equity firms Apollo Management and CVC Capital Partners, which values Brit at up to £888m.
The offer from Apollo and CVC, which have formed a new company called Achilles to make the offer, values the Lloyds of London insurer at £10.75 per share but includes a provision through which shareholders will receive a futher 25p per share if Brit’s net tangible asset value is higher than £11 per share by the end of the year. The offer represents a premium of 47 to 51 per cent to the insurer’s closing price of £7.29 on 10 June, the last day before the beginning of the offer period.
John Barton, chairman of Brit Insurance, said: “Having given full consideration to the offer from Achilles, the independent directors believe it represents good value for Brit shareholders and recommend that they accept the offer.”
Brit Insurance said in a separate statement yesterday that overall gross written premiums for the nine month period to 25 October fell 8.5 per cent to £1.22bn, compared to £1,334.4bn a year earlier, as underwriting conditions remained competitive.
Dane Douetil, chief executive, said trends in the third quarter were similar to those in the first half of the year.
Brit’s shares closed 2.7 per cent higher yesterday at 1,045p.
BRIT Insurance has been advised by Lexicon Partners over the takeover bid from Achilles. Co-founded in 2000 by Andrew Sibbald and Angus Winther, Lexicon Partners is a corporate financial advisory and investment banking firm that focuses on financial services and utilities sectors.
The firm provides advice on mergers and acquisitions, public takeovers, management buyouts, joint ventures, IPOs, debt finance, equity placing, and alternative finance.
In its first three years Lexicon advised on 45 deals. It has since grown from a London-based financial services boutique into a corporate finance adviser covering a number of specialist sectors with offices in London, New York and Hong Kong.
The firm has advised on a number of deals and IPOs this year including the listing of Jupiter Asset Management in June. It also advised on deals including the acquisition of Thames River Capital by F&C Asset Management in April and the merger of Coventry and Stoud & Swindon building societies in March.
Previously Sibbald has said the boutique partnership model means "creative, bright people who are unfettered by all the woes of the big banks can just get out there and find business." The firm’s clients include 3i, Aviva, Gartmore, ISIS, the Blackstone Group, Barclays, Rubicon, QBE, and Prudential.