FTSE 100 insurer Beazley (BEZ) announced it has agreed an £8 billion takeover by Swiss giant Zurich. The offer, pitched at £13.35/share including dividends, represents a 60% premium to Beazley’s undisturbed share price.

Share price: £12.64 (+9%)	PE: 10.9x
Market Cap: £7.4bn	Yield: 2.2%

HEFTY PREMIUM

On 19 January, the Lloyds of London syndicate operator revealed it had received two approaches from Zurich. The Swiss firm initially pitched its offer at £12.30/share, followed by a second offer at £12.80/share.

Today’s offer of £13.35/share comprises £13.10 for the underlying business plus 25p for the FY25 dividend. As well as a 60% premium to the undisturbed price, the offer represents a 35% premium to Beazley’s all-time high.

The deal would create a leading global specialty platform with around $15 billion of gross written premiums. Based in the UK, the new business would be able to leverage Beazley’s Lloyd’s of London presence.

Beazley is a market leader for specialty risks in lines such as Professional Indemnity, Property, Marine, Reinsurance, Accident and Life. It also covers Political Risks and Contingency business, and in the last few years it has developed a Cyber Liability business.

As well as its Lloyds of London syndicates, the firm operates in 50 US states providing specialty cover. Total gross written premiums in 2024 came to $6.1 billion.

Another day, another deal, except this time it’s a FTSE 100 company which is being taken over. At a 60% premium to the undisturbed share price, we can’t see anyone challenging Zurich’s offer either.

Insurance is hardly a sexy business, and Beazley was under-delivering, with growth at the low end of its FY25 guidance. However, the opportunity to hoover up seven Lloyds syndicates and $6 billion of premiums was too good to pass up.

Read more about the offer here: https://www.beazley.com/en-US/investor-relations/