Brit Insurance shares rocket after it recommends CVC and Apollo takeover

 
Marion Dakers
SHARES in Brit Insurance roared upwards yesterday after it advised shareholders to accept an £850m joint offer from buyout firm CVC Capital Partners and original bidder Apollo.

Brit closed up 4.1 per cent at £10.28 yesterday as the markets reacted to news of the joint bid on Friday. The price values the listed element of the firm at £778m.

A spokesman for Brit said that CVC linked up with Apollo over the summer.

“During the course of the due diligence that Apollo had been undertaking it became apparent that Apollo wouldn’t be able to do this on their own. CVC approached the board of Brit at that time and the board of Brit worked quite hard to get Apollo and CVC in a place where they could work together on this,” the spokesman said.

Brit Insurance agreed to open its books to Apollo in July after the US private equity firm raised its offer to £10.75 a share, after two earlier bids were knocked back.

CVC and Apollo offered the same price on Friday, plus a further 25p per share if the fully diluted value of Brit’s assets passes £10.75 per share before the end of the year.

Brit said in a statement that the consortium’s due diligence was at a “reasonably advanced” stage, but that shareholders could yet reject the sweetened offer.

ANDREW GALLOWAY

WEST HILL

Apollo is using a team from West Hill, led by co-founder and partner Andrew Galloway, together with Bank of America Merrill Lynch.

Galloway helped set up HSBC’s investment banking arm in 1997, before leaving in 2002 to repeat the trick at West Hill. Recent deals include a placing for Metro Bank and the £851m takeover of Willis by KKR; less recent business includes advising media tycoon Robert Maxwell when Galloway worked for merchant bank Samuel Montagu. Galloway is working with West Hill colleagues John Terrando and Monica Wajda.

Bank of America Merrill Lynch’s team is led by Phillip Noblet with Andrew Chen and Matthew Watkins, together with the corporate broking team of Mark Astaire and Peter Brown. Brit has taken on a team at Lexicon, led by Angus Winther, Duncan Buck and Neil Bhadra. Lexicon is an old hand at M&A in the Lloyd’s insurance market, having worked for Wellington when it was taken over by Catlin in 2006.

Latecomer CVC is understood to have taken on Bob Fleischer and Stephen Matthews at Willis and Citigroup’s head of UK investment banking David Wormsley to advise, with Clifford Chance offering legal help.