UPDATE 1-Brit Insurance accepts formal bid from CVC, Apollo

* Offer priced at 10.75 pence/share

* Brit CEO says consolidation more likely in sector

* Brit shares up 2.4 percent at 1045 pence/share

(Adds details)

LONDON, Oct 26 (BestGrowthStock) – Brit Insurance (BRE.L: ) accepted a
formal offer from buyout firms Apollo Management and CVC Capital
Partners after recommending an approach which values Brit at up
to 888 million pounds ($1.40 billion). [ID:nLDE68G1UV]

Lloyd’s of London [LOL.UL] insurers, which offer cover
against large-scale risks such as natural disasters, have
emerged as potential takeover targets because cyclically low
insurance prices have weighed heavily on their shares.

Brit’s chief executive Dane Douetil said conditions were now
ripe within the sector for consolidation given upcoming Solvency
II requirements, which may create capital issues for the smaller
players, and the short-term volatility weighing on results.

“Certainly, it is more likely to have more consolidation in
the next 12 to 24 months than there has been in the last 5
years,” Douetil told Reuters.

Earlier this month, insurer Hardy (HDU.L: ) rebuffed an
initial 300 pence per share approach from peer Beazley (BEZG.L: ).

Brit Insurance said in a separate statement on Tuesday that
overall gross written premiums for the 9 month period to Oct 25
fell 9 percent to 1.22 billion pounds as underwriting conditions
remain competitive.

Brit Insurance said the offer from the Apollo, CVC
consortium valued the business at 10.75 pence per share, but
included a provision through which shareholders would receive a
further 25 pence per share should Brit’s net tangible asset
value be more than 11 pounds per share at the end of 2010.

This represents a premium of 47-51 percent to Brit’s closing
share price of 729 pence on June 10 — the last day before the
offer period started.

Douetil said the deal represented a good price for
shareholders. Brit shares were up 2.4 percent at 1045 pence by
0742 GMT.

“It will allow us to build the business at the right part of
the cycle, to be more nimble in what we do and to have a longer
term perspective,” said Douetil.
($1=.6353 Pound)
(Reporting by Lorraine Turner, Editing by Sudip Kar-Gupta)

UPDATE 1-Brit Insurance accepts formal bid from CVC, Apollo