Stockwatch

Biggest mover of the week was Benfield, which saw its stock rocket after broking giant Aon made a 350p a share move on the business.

Aon’s offer valued Benfield’s existing issued share capital at £738m, or £844m on a fully diluted basis.

Shares in Benfield climbed over 27% on the news of the bid, which represented a 29% premium to the closing price last Thursday.

Investment bank KBW said in a note that there was a high probability that the deal would complete. Benfield’s board will recommend the offer, which values the shares at 10.4x the estimated EBITDA for 2009, to shareholders.

Aon has already received a binding commitment from 25.4% of Benfield's existing shareholders.

Earlier this month, Benfield reported first half pre-tax profits of £87.7m, down 5% from £92.3m at the same period last year. Group revenue fell to £233m, down 4%, on the back of softening reinsurance rates.

Specialist insurer Hiscox also enjoyed strong growth in its share price this week, after reporting record interim pre-tax profits of £109.2m.

The insurer’s stock has been in the ascendance since the end of July, after taking a downward path in early May.

As Insurance Times went to press, Hiscox shares were trading at 257.50p up 13% for the week.

Meanwhile, Amlin reported a robust set of first half results, posting pre-tax profits of £137.3m. This was down 26% on the same period last year, due to losses on investments, but proved well ahead of analysts’ forecasts.

Alongside its results, Amlin said it was consider acquisitions that might help strategically to build the diversity of its business.

Citigroup said the company appeared prepared to consider a meaningful bolt-on, probably in the US, of a high quality business skewed towards non-catastrophe short-tailed risks with a preference for property rather than casualty exposures.

“If successful such expansion would tilt the balance of Amlin’s business away from catastrophe exposures, enabling the company to quickly expand its cat business at the next point of market dislocation,” Citigroup said in an analysts note.

Amlins share were trading at 289.50p as Insurance Times went to press.
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The biggest mover of the week was Benfield, whose stock rocketed after broking giant Aon made a 350p-a-share move on the business.

Aon’s offer valued Benfield’s existing issued share capital at £738m, or £844m on a fully diluted basis.

Shares in Benfield rose more than 27% on news of the bid, which was a 29% premium on the closing price last Thursday.

Investment bank KBW said in a note there was a high probability that the deal would complete. Benfield’s board will recommend the offer, which values the shares at 10.4 times the estimated earnings before interest, taxes, depreciation and amortisation for 2009, to shareholders.

Aon has already received a binding commitment from 25.4% of Benfield's existing shareholders.

Earlier this month, Benfield reported first-half pre-tax profits of £87.7m, down 5% from £92.3m in the same period last year. Group revenue fell to £233m, down 4%, on the back of softening reinsurance rates.

Specialist insurer Hiscox also enjoyed strong growth in its share price this week, after reporting record interim pre-tax profits of £109.2m.

The insurer’s stock has been in the ascendant since the end of July, after taking a downward path in early May.

As Insurance Times went to press, Hiscox shares were trading at 257.50p, up 13% for the week.

Amlin reported pre-tax profits of £137.3m for the first half (see left). This was down 26% on the same period last year, because of losses on investments, but well ahead of analysts’ forecasts.

Alongside its results, Amlin said it was considering acquisitions that might help to build the diversity of its business.

Citigroup said the company appeared prepared to consider

a meaningful bolt-on, probably in the USA, of a high-quality business skewed towards non-catastrophe short-tailed risks with a preference for property rather than casualty exposures.

“If successful, such expansion would tilt the balance of Amlin’s business away from catastrophe exposures, enabling the company to quickly expand its cat business at the next point of market dislocation,” Citigroup said in an analyst’s note.

Amlin’s shares were trading at 289.50p as Insurance Times went to press.