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Strategies & Market Trends : Speculating in Takeover Targets -- Ignore unavailable to you. Want to Upgrade?

To: REH who wrote (131)	8/26/2003 10:33:20 AM
From: richardred	Respond to of 7263

REH-I agree with what you are saying. That's why I mentioned as cash builds. The result of higher premium income from other insurance companies spreading their risk out. There are more than RNR in reinsurance to keep prices in check somewhat, but I feel this is an area of risk that only big companies can tackle. IMO- As a would be acquiring company gets bigger, so does their exposure to risk. As these companies get bigger. If what you mentioned, ( 9/11 has lead to increased security which should lead to less man-made disasters). I have a feeling the reinsurance industry will come under scrutiny. This from others, and customers balking at the premiums they charge. I'm not sure where the industry stands under pending or current legislation. This in regards to the shared responsibility with Govt, and like businesses, by terrorist attacks on business and property. If I was invested in this area. I would think it would be worthwhile finding out what's now in place. Maybe you already have? I think GE just did buy some Transamerica assets from a French company. I think Warren and his mentors always look for value. I heard rumors on the street at one time he was looking to sell General-RE to GE. That might have been baseless rumor. As to Warren looking at RNR. I suggest you look into my simplistic be the ball approach. The first place I'd start would be General-Re. Looking at historical and present separated reported financial data if available. There should be some out before he bought it. Comparing the data with RNR. You could be on the mark, in your thinking. RR :+ )

To: REH who wrote (131)	9/15/2010 12:34:41 PM
From: richardred	Respond to of 7263

DEALTALK-Reinsurer XL looks cheap; Bermuda ties may attract * Large European reinsurers seen potential suitors (For more Reuters DEALTALKs, click [DEALTALK/]) By Supantha Mukherjee and Sweta Singh BANGALORE, Sept 15 (Reuters) - It's cash-rich, led by a CEO with political aspirations, and was last year's top S&P 500 performer. Pressured by soft pricing and slow premium growth, reinsurer XL Group (XL.N) is also undervalued, analysts say, and a prime target for a bidder with $10 billion to spend and an eye on expanding into Bermuda, the world's biggest offshore reinsurance centre. Canada's Fairfax Financial (FFH.TO) and Berkshire Hathaway (BRKa.N) (BRKb.N), led by billionaire investor Warren Buffett, are among those cited by analysts as potential bidders, attracted by XL's $31.7 billion investment portfolio. More plausibly, large European reinsurance groups such as Munich Re (MUVGn.DE), Swiss Re (RUKN.VX) or Allianz (ALVG.DE) -- all sitting on billions of dollars in cash -- could be potential suitors who recognise the value of a Bermuda platform. "XL derives a lot of business from Bermuda and that might entice a large foreign reinsurer looking to enhance its platform by adding a Bermuda presence," said Michael Paisan at Stifel Nicolaus. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ TAKE A LOOK - Annual reinsurance summit [ID:nLDE68C1IZ] For Bermuda reinsurance FACTBOX: [ID:nSGE68D0KV] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> With more than half its premium volume originating outside the United States, Ireland-headquartered XL offers geographic and product diversification, a favorable tax status, and a platform that can generate a materially higher return on equity with the right kind of partnership. XL stock, which trades at just above $20, has an economic book value of $34. This means if the company were liquidated, its investors would pocket $8.70 more than its tangible book value, analyst Bijan Moazamio of FBR Capital Markets said. "No insurer in our coverage universe has a larger gap between its economic BV and tangible BV than XL," he said. XL CEO Michael McGavick, 52, ran as a Republican candidate for the U.S. Senate in 2006, and is seen as a a person motivated enough to sell up if the right offer comes along. McGavick, who stands to make $16.6 million from a possible sale of XL, was key to turning around Seattle-based insurer Safeco, which was sold to Liberty Mutual at a big premium in 2008 just after he left the company. McGavick took over at XL at a time when the reinsurer was hit hard by structured finance losses at majority-owned bond insurer Syncora Capital. Analysts credit McGavick with turning around XL, whose shares jumped fivefold last year, while the S&P 500 .SPX index gained 29 percent. "If given the right price, McGavick would certainly entertain offers," said Paisan at Stifel Nicolaus. XL declined to comment on the possibility of a takeover -- one which analysts said could trigger consolidation in Bermuda, where pricing in the reinsurance sector is soft and business growth is slow. "Acquisition offers the only potentially prudent means of growth in a softening pricing environment," said Bill Yankusat Macquarie Research. (Reporting by Sweta Singh in Bangalore, Editing by Ian Geoghegan) reuters.com