Dear friend,

All the equity analysis I have read about Converium in the last six months keep saying that the shares are a bitty ‘toppy’ – and that this is due to a bid premium in the price.

Well, here’s proof that the market usually gets things right — Scor has made its move and as far as investors are concerned, Converium is in play.

The shares opened a little above Scor’s bid price on the move — which means that the money thinks that either another bidder will enter the race, or Scor will be forced to up its offer.

Whenever I gossip in the market the most touted ‘good fits’ for a tie up with Converium the names that always come up are Bermudian class of 2001 players, Arch and Axis.

They have the US business and the long-tail expertise and would get instant diversification of the type that would take an extremely long time to grow organically.

But hang on a minute, maybe they don’t need to bid?

If Scor eventually takes Converium out and treaties where Scor and Converium both have shares are redistributed in the sake of diversity, our Bermudian friends might find themselves being offered shares on grand old European business that they wouldn’t have dreamt of being shown prior to the deal

I await ‘as if’ research on this.

But as Swiss Re research recently confirmed – merger and takeover activity usually has the net effect of taking capacity out of the marketplace — and creating opportunity for other players.

Whatever happens its time to get down to Zurich — it’s all up for grabs.