Catlin is poised to acquire Wellington in a deal worth an estimated £593m by the end of this week, sources told Insurance Times.
Speculation mounted today that Catlin would make an offer of 125p per share on Friday. When the stock market closed today Wellington shares stood at price of 113p.
With an approximate 475m ordinary shares in the Lloyd's managing agent the offer would value the company at £593m.
Numis Insurance Analysts said there were three key factors driving Catlin's interest in Wellington: US expansion, tax savings and growth in catastrophe income.
Analyst Richard Gradidge said: “The challenge of integrating two people businesses without loss of revenue represents the main execution risk. Both companies have substantial Lloyd's operations where the overlap is material.
But, he warned: “In a market where underwriting talent is keenly contested, the potential clash of cultures and underwriting philosophies may prompt defections to competing businesses. In the past this has proved the main obstacle to consolidation.”
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