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Takeover deal boosts Cover-More shares

AAP logoAAP 12/12/2016 Trevor Chappell

Travel insurer Cover-More Group has agreed to a $741 million takeover offer by Zurich Insurance, driving up Cover-More shares by more than 40 per cent.

Cover-More shares were 56 cents, or 42.59 per cent, higher at $1.875 at 1504 AEDT.

Under a scheme of arrangement, Zurich will pay $1.95 in cash for each Cover-More share.

The offer price represents a 48.3 per cent premium to Cover-More's closing share price of $1.32 on December 9.

The Cover-More board has unanimously recommended that Cover-More shareholders vote in favour of the scheme.

"Cover-More's board has unanimously concluded that the sale of the company at a significant premium to market is an attractive outcome for shareholders," Cover-More chairman Louis Carroll said on Monday.

"This reflects the strategic value of Cover-More's business including its strong market position, global distribution footprint and its ability to deliver growth into the future."

Cover-More chief executive Mike Emmett said the takeover would give Cover-More access to Zurich's global platform and strong balance sheet, putting Cover-More in a foof position to accelerate its growth in the global travel market.

Cover-More shareholders are expected to vote on the scheme of arrangement in late March or early April 2017.

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