Share-price surge as Brit Insurance rebuffs bid

SHARES in Brit Insurance, the Lloyd's of London insurer sponsoring the England cricket team, surged 20 per cent yesterday after it rejected a takeover approach following the market's close on Thursday.

The stock closed up 151p at 880p, as despite the rejection the market decided that Brit Insurance was seen as being in takeover play.

City speculation is that the bid approach from an unnamed private equity group is in fact Apollo, of the United States, and is worth 10 a share.

Brit Insurance has said the approach "significantly undervalues" its business, and that it has told the suitor there is no basis for further talks.

The group specialises in property and casualty insurance. It became the England cricket team sponsor in January.

A 10-per-share offer would be 37 per cent higher than the company's closing share price of 729p on Thursday evening.

Apollo was not available for comment, but is believed to have first approached Brit Insurance two weeks ago.

The group distributes insurance and reinsurance through brokers, and also operates in the Lloyd's of London insurance market and as an insurer to small- and medium-sized businesses.

Brit announced a 31 per cent leap in pre-tax profits in February over the previous year. But the company revealed in May that the earthquake in Chile would mean a 48m hit to this year's profits.