Brit has launched a hostile takeover of PRI, the specialist professional indemnity (PI) outfit set up just last summer.

PRI directors are in frantic talks with shareholders this week assessing the offer.

Brit is offering to pay about 120p a share for PRI 's entire stock, which last week was trading on the Alternative Investment Market (AIM)at 115p. The offer values PRI at about £156m.

Brit said four shareholders together controlling 52%of PRI 's stock had accepted its offer in principle.

Brit sold its entire holding in PI Direct -another player in the PI market - last month, before announcing its move on PRI.

Brit said the takeover would give PRI the resources to storm the market for PI cover just when prices are high.

It would also cut PRI 's risk-based capital requirements as a result of diversifying its portfolio.

Brit's stockbroker, Collins Stewart, advised PRI when it listed on AIM last June. PRI has now appointed Lexicon Partners as its adviser.

Brit was waiting for a response as PRI bosses announced plans to spend this week talking to their

PRI director of underwriting Peter Matson said: "I would love to say lots of things, but I am not allowed to. "We need to talk to our institutional investors."

The company reported a pre-tax loss of £1.45m on £18.5m of gross premiums underwritten since it started business on 1 September.
PRI finance director Mike Walton said: "The challenge that faces PRI is to drive down acquisition costs and streamline IT costs."