Zurich Insurance has put forward a revised takeover proposal for UK specialty insurer Beazley, valuing the company at up to 1,335 pence per share. The proposed transaction would be worth approximately 8 billion pounds, or $10.97 billion, and follows several previously rejected bids.
Under the updated proposal, Zurich would offer 1,310 pence per share in cash, along with permitted dividends of up to 25 pence per share. Beazley confirmed that its board would be prepared to recommend the offer once Zurich submits a formal bid, provided this occurs by February 16 in accordance with UK takeover rules.
Beazley had earlier rejected multiple approaches from Zurich, citing undervaluation. These included an offer of 1,280 pence per share in January and a prior proposal of 1,315 pence per share in June. The improved terms appear to have addressed at least some of the board’s concerns, leading to its more receptive stance.
Following the announcement, Beazley’s shares rose as much as 9%, reaching a record high of 1,265 pence. Market reaction suggested optimism around the likelihood of the transaction proceeding. According to Mark Kelly, CEO of advisory firm MKI Global, the risks surrounding the deal appeared low, both in terms of potential competing bids and the likelihood of successful completion.
If completed, the acquisition would strengthen Zurich’s position in specialty insurance. Beazley operates in a range of specialty lines, including cyber, marine, aviation and space, and fine art insurance. The transaction would also expand Zurich’s footprint in the UK, a market that may offer strategic diversification as the insurer’s exposure to the United States and the impact of a weaker U.S. dollar have weighed on its performance and share price.
Zurich stated that it looks forward to beginning confirmatory due diligence and working with Beazley toward a binding offer announcement. The two companies issued a joint statement reflecting this intent.
The proposed takeover would represent another example of a foreign buyer pursuing a London-listed company, a trend that has continued amid relatively lower UK equity valuations. Zurich disclosed earlier this week that it had acquired a 1.47% stake in Beazley.
The situation remains subject to Zurich making a formal offer and completing due diligence, with further developments expected ahead of the February 16 deadline.
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