JLT Corporate Risks, a wholly owned subsidiary of Jardine Lloyd Thompson Group, has acquired Pavilion Insurance Network following weeks of speculation over the company's future.
The two firms have reached an agreement on the terms of a recommended cash offer for the whole of the issued and to be issued share capital of Pavilion.
Under the terms of the offer, Pavilion shareholders will be entitled to receive 12p per Pavilion share in cash.
On this basis, the terms of the offer value the share capital of Pavilion, a specialist insurance intermediary, at approximately £6.62m.
Dominic Burke, chief executive of broker JLT Group, said: “The Pavilion Group provides us with the opportunity to add a new arm to our UK retail insurance business.
“The acquisition will provide the JLT Group with access to on-line distribution and additional expertise in meeting the insurance needs of affinity groups."
Andrew Selby, executive chairman of Pavilion, added: "We believe that the offer provides shareholders with certainty of value at an attractive level which reflects both the quality and prospects of the Pavilion business, and its strong reputation in the insurance market as an innovative provider of niche insurance solutions through its e-business platform."
Speculation has mounted in recent weeks that Rock Holdings was gearing up to buy Pavilion after it bought a total of 2.75m shares, lifting its stake to 7.3% from 1.87%.
Rock Holdings, which paid between 10p and 10.25p per share, now has a total of 3.7m shares in the company.
Pavilion recently admitted it was in talks with a potential buyer.
