A 56% Premium for a FTSE-100 Stalwart Doesn’t Look Enough

Cyberattacks have been a great business line for insurers selling cover against digital hijackings. But this lucrative opportunity has inevitably attracted greedy new entrants who’ve put downward pressure on pricing and profitability. Cue falling valuations for the specialist cyber insurers and now a takeover bid for a FTSE-100 player at an eye-catching premium.

London-based Beazley Plc on Thursday rejected an approach from Zurich Insurance Group AG worth £7.7 billion ($10.2 billion), a thumping 56% premium. That followed a proposal last week with a 50% top-up, precisely calibrated to hit this psychological bite-your-arm-off dealmaking metric. Zurich Chief Executive Officer Mario Greco had attempted a deal last year at a higher price. There’s no colossal cost-cutting opportunity here. Greco must see value where the stock market does not.