U.S. giant Aon makes cash offer for Benfield
Company pensions swing to multi-billion pound surplusAon acquired in February the reinsurance operations of rival Arthur J Gallagher for an upfront payment of $30 million.
Benfield has rebuffed previous takeover approaches but in the past 18 months has seen profits slip as a result of the weak dollar, spiralling costs and falling reinsurance prices, which has hit its fee revenue, and caused its shares to fall by a quarter since the start of 2007.
Grahame Chilton, Benfield's CEO, who had previously said suitors had "champagne tastes and beer money", said the offer was fair in tough market conditions.
"This is fair value for both parties... (the offer) will be recognised as good value to Benfield shareholders," said Chilton, who will become vice chairman of Aon Group.
Analysts said Aon's offer, which is the equivalent of 2.6 times Benfield's revenue, was fair. "The price is decent. It's game, set and match as far as I'm concerned," said one analyst.
Credit Suisse acted as financial adviser to Aon, while Merrill Lynch advised Benfield.
(Reporting by Clara Ferreira-Marques; Editing by Mike Elliott, Paul Bolding)
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