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Shares of insurance provider Hastings Group Holdings (LON:HSTG) have surged after the company’s directors agreed on a deal for the insurer to be taken over for £1.66 billion.

The deal will see a consortium of South Africa’s Rand Merchant, and Finnish insurance company Sampo team up to form a jointly owned company named Dorset Bidco Limited, although, they intend for Hastings to still operate as a standalone company…

Sampo and Rand will pay 250p per share in cash, which is 16% above yesterday’s close price.

Sampo, said that it has a strategic ambition to expand further into non-life insurance…

“The acquisition of Hastings represents an attractive opportunity for Sampo to advance its strategy and accelerate its repositioning towards retail P&C insurance. Hastings is a leading motor insurer in the UK and has recently been diversifying into other non-life insurance products including home insurance. Both motor and home insurance represent large markets in the UK with growth potential for the Hastings business,” said Sampo in its press release.

After the announcement, shares of Hastings Group exploded higher and are now trading at 253.2p per share, after a 17.7% move higher. For the year to date, the company’s share price is up 41.32% after a previous move higher at the end of July when news of takeover talks was first reported.

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