By Ian Walker
LONDON--Shares of Brit PLC (BRIT.LN) rose 10% in early trade
Tuesday after the U.K.-listed specialty insurer agreed to a
takeover by Canadian insurance giant Fairfax Financial Holdings
Ltd. (FFH.T) for 1.22 billion pounds (US$1.88 billion).
"With the acquisition of Brit, Fairfax will have a significant
top five position at Lloyd's of London," Fairfax Chairman and Chief
Executive Prem Watsa said in a statement.
Fairfax is paying 305 pence in cash for each share of Brit,
which only re-joined the London Stock Exchange last April. The
price is an 11% premium to its closing share price Monday, and a
27% premium to its initial public offering price of 240 pence.
The offer comprises 280 pence per share in cash and the expected
final dividend of 25 pence, to be declared alongside Brit's
earnings on Feb. 25.
At 0855 GMT Brit shares were trading 27.8 pence, or 10% higher
at 302 pence.
Fairfax, which expects the acquisition to add to its gross
revenue and investments a share, said it has secured irrevocable
agreements to acquire about 73% of Brit's outstanding float.
"Brit has an outstanding track record over the last 10 years and
will continue to operate on a decentralized basis once owned by
Fairfax," Mr. Watsa said.
"Brit's Board is pleased to recommend the combination with
Fairfax, which I believe will bring us significantly closer to
realizing our strategy of building the leading global specialty
(re)insurer," its Chairman Richard Ward said.
Fairfax said it is fully supportive of Brit management's current
business plan and strategy, and intends to retain Chief Executive
Mark Cloutier and as much of the existing key management team as
possible.
Brit, formally Brit Insurance Holdings, rejoined the London
market on April 2, 2014 after a three-year absence. It was taken
private by Achilles Netherlands Holdings BV, a company formed by
funds managed by private-equity firms Apollo Global Management and
CVC Capital Partners, which bought the insurer for GBP888 million
in October 2010 and subsequently canceled its listing in March
2011.
Brit is a Netherlands-based firm providing a broad range of
commercial insurance and reinsurance products with a focus on the
property, casualty and energy business.
--Rita Trichur contributed to this article.
-Write to Ian Walker at ian.walker@wsj.com; @IanWalk40289749
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