Specialty insurer Beazley has rebuffed Zurich’s latest takeover offer of £7.67 billion ($15.14 billion), saying its “detailed evaluation” of the proposal shows the price “materially undervalues” the business. 

Zurich made the £12.80 cash per share offer on Monday, its fifth attempt at acquiring the London-listed insurer. The revised offer came after Beazley turned down a £12.30 per share proposal last Friday. 

Beazley shares soared 42% to above £11 after Zurich announced its bid on Monday.  

Beazley CEO Adrian Cox told the Financial Times why Monday’s offer was rejected. “We were a bit nonplussed. We don’t think the price is right, but also we don’t want to fail to recognise the realities of the capitalist world that we’re in.” 

The latest offer was below a bid put forward by Zurich in late June last year, Beazley said. The bid, one of three made that month, valued the insurer at £13.15 per share or an implied equity value of £8.4 billion. 

Beazley says its board “engaged with Zurich appropriately, including providing Zurich with certain limited due diligence information in a good-faith effort to come to a shared understanding of value” after receiving the three offers. 

On the latest offer, Beazley says the board has “unanimously rejected the cash proposal … on the basis that it materially undervalues Beazley and its longer-term prospects as an independent company. This followed detailed evaluation of the proposal by the board together with its advisers. 

“The board is very confident in Beazley's standalone prospects as a publicly listed company and in the attractiveness of Beazley's business model fundamentals and believes that Beazley is uniquely positioned within the global insurance market to maximise long-term shareholder value and realise the full potential of its specialty platform.” 

Beazley says its strengths include a track record of delivering shareholder value and success in building a presence in the fast-growing cyber line. 

“Beazley has a leading product set including notably in cyber, which, in the board’s view, continues to be one of the most significant structural growth stories in global specialty insurance.” 

Zurich CEO Mario Greco told investors last November that he was keen to grow the insurer’s specialty business. “Today we’re at number three globally on specialties … I want to quickly start growing ourselves even faster … we like specialty because it’s a very sustainable business where you cannot simply enter,” he said.