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Beazley has rejected a £7.7bn bid from Zurich Insurance, saying that the Swiss group’s offer “materially” undervalued the FTSE 100 group.
The cyber specialist insurer said its board had unanimously rejected Zurich’s £12.80-per-share offer, which was announced this week, adding that it was at a lower price than a previous offer by the Swiss group.
An offer made by Zurich in June valued Beazley at £13.15 per share, or an implied equity value of £8.4bn, according to the UK group.
Beazley’s shares fell slightly in early trading on Thursday, from £11.34 to £11.11. The shares had rallied 42 per cent when Zurich’s latest bid was announced on Monday but were still trading below the offer price.
The offer comes amid a wave of deals from foreign buyers for UK insurers, with New York’s AIG last year announcing plans to take a stake in Convex, another speciality insurer with operations at Lloyd’s of London and in Bermuda.
Shares in Beazley’s London-listed peers Hiscox and Lancashire have also risen since Zurich’s approach was announced, rising about 8 per cent and 5 per cent respectively.
Zurich went public with its interest in Beazley after making several previously undisclosed approaches, according to the Swiss group’s chief executive Mario Greco. Zurich said its latest offer was an improvement on a previous £12.30 per share bid it had made this month.
Zurich’s bid could attract other suitors for Beazley since the approach had “focused the spotlight” on the group’s strength and “the distinctiveness of its operations”, said RBC analyst Ben Cohen.
Under UK takeover rules, Zurich has until February 16 to make a firm offer or walk away from a deal for at least six months.
Zurich has the option to increase its offer but in a note published on Thursday morning before Beazley’s rejection, Jefferies analyst Derald Goh said the bank’s conversations with investors “point to a deal completion”, since “Zurich is close to its maximum willingness and ability to pay”.
“The speciality business is in very high demand,” Greco told the FT in an interview this week, pointing to high demand for insurance spanning infrastructure and energy construction, shipping, aviation, AI and cyber attacks.
Greco has emphasised the importance of Beazley’s operations to Zurich’s strategic plans for growing its speciality business.
The combined business unit would draw in about $15bn of gross written premiums, an important revenue measure in the sector, up from Zurich’s $9bn in premiums in 2024, the Swiss group said.
Greco also told the FT that Zurich was finalising plans for a Lloyd’s of London syndicate, which could launch in a matter of weeks, even as it pursues Beazley.