(Reuters) - Lloyd's of London insurer Novae Group Plc (L:NVA) said it had agreed to be taken over by AXIS Capital (N:AXS), a Bermuda-based speciality lines insurer and reinsurer, for 467.6 million pounds in cash.
The 700 pence per share offer for Novae represents a premium of over 20 percent to the London-based insurer's closing price on Wednesday.
AXIS Chief Executive Albert Benchimol said the acquisition of Novae, which covers property, casualty, marine, aviation and political risk, would create an about $2 billion player in the London speciality market.
"It (Novae) remains a relatively small player in a global industry. AXIS is a substantial and successful business which represents an excellent partner for the Novae business, its customers and employees," John Hastings-Bass, Chairman of Novae, said.
AXIS operates in the United States, Europe, Singapore, the Middle East, Canada and Latin America.
Insurers have been preparing for a wave of mergers and acquisitions, as valuations in the Lloyd's insurance market became more attractive to overseas buyers due to a fall in the value of the pound after Britain voted to leave the European Union.
Credit Suisse (SIX:CSGN) International and Fenchurch Advisory Partners LLP are the financial advisers to AXIS, while Evercore is advising Novae.
Simpson Thacher & Bartlett LLP and Willkie Farr & Gallagher LLP are the legal advisers to AXIS. Slaughter and May is providing legal advise to Novae.