Property and casualty insurer Chubb Ltd on Thursday offered to acquire smaller rival Hartford Financial Services Group Inc in a $23.24 billion cash-and-stock deal.

Chubb’s $65 per share offer represents a premium of 13.2% to Hartford’s last close of $57.41.

In a note, Wells Fargo analysts called The Hartford’s small-business insurance franchise the main draw for Chubb, which currently focuses on covering mid-sized and large companies. Chubb has around $9.4 billion of excess capital to fund any transaction.

They noted that previous deals in the P&C space valued companies at upwards of 1.8-times book value, likely seen as a baseline for negotiation by The Hartford, which traded at 1.14-times prior to Thursday’s news. A 1.75-times valuation would price The Hartford at $30 billion.

Read more at Reuters

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