Insurer Brit backs £888m private plan

England cricket team sponsor Brit Insurance is set to be taken private after it backed a buy-out deal valuing the company at up to £888 million.

Brit accepted a formal offer from private equity firms Apollo Management and CVC Capital Partners after the independent directors of the Lloyd's of London insurer recommended that shareholders accepted the deal of between 1,075p and 1,100p per share.

The offer, made by Achilles, a new vehicle formed by Apollo and CVC, values Brit's shares at up to 51 per cent more than the closing price 729p on 10 June, the last day before an official offer period for bids commenced.

Brit - which offers cover against large-scale risks such as natural disasters - emerged as potential takeover target because cyclically low insurance prices have weighed heavily on its shares. Chief executive Dane Douetil said conditions were now ripe within the sector for further consolidation.

The latest takeover comes amid intense activity in the industry. The Co-operative is considering a sale of its 18 billion life assurance arm, while buy-out firm Resolution has unveiled a deal worth 165m to acquire Bupa's operations in critical illness and life insurance cover.