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Member, Beacon International Group, Ltd.
LONDONLloyd's insurer Wellington Underwriting P.L.C. has announced that it is in discussions with rival Catlin Group Ltd. over a possible takeover bid.
Wellington made the announcement after its share price rose almost 14% in late trading on the London Stock Exchange today. In a statement, the company said that it is in discussions with Catlin that "may or may not" lead to a cash and shares offer being made for Wellington by Catlin.
A spokesman for Catlin confirmed the details of Wellington's announcement, but was unable to comment further, saying that the Hamilton, Bermuda-based company will make an announcement when appropriate.Wellington said that its board will need to be satisfied that the business plan for the enlarged group is likely to deliver greater value to Wellington shareholders than Wellington's standalone strategic plans.
"In the absence of an offer which satisfies this requirement, Wellington will continue to work towards the delivery of its stated strategic objectives as set out in its interim results for the six months ended June 30, 2006," the company said in its statement.
Wellington said that discussions between the parties are continuing and the board will update shareholders in due course.
Catlin, which underwrites at Lloyd's of London, is domiciled in Bermuda and has a licensed Bermudian insurance company. Wellington has previously said that it was considering a similar move to Bermuda.
Catlin has been pursuing a growth strategy in the United States, while Wellington already has a non-admitted U.S. insurance company and a U.S. underwriting manager.
Wellington aborted a proposed merger with Lloyd's managing agent Limit Underwriting in 2000. Limit was acquired later that year by QBE Insurance Group.