Private equity firm Apollo will meet with its advisors this weekend to decide whether to increase its £785m offer for Brit Insurance.   The U.S. buy-out house has already started direct negotiations with Brit's shareholders after its £10-a-share bid for the company was rejected earlier this week.

Shares in the Lloyd's of London insurer, which is best known outside insurance for its sponsorship of the England cricket team, soared over 20 percent to 880p after Brit claimed Apollo's offer significantly undervalued the group.   “Accordingly, the board advised Apollo that it was not prepared to engage in further discussions unless a higher indicative offer, which was capable of recommendation, was forthcoming,” the company added in a statement.
Brit is attractive to investors because its high dividend yield of about 7pc reflects its strong cash resources. Analysts say companies across the Lloyd's market are also currently undervalued.
One leading investor in the insurer said it would now seek discussions with Brit's management over the offer but agreed that Apollo's bid was too low.
“We don't think that the company should just simply roll over and accept an offer in this region,” the investor added.
(Source: Daily Telegraph)