Lloyd's of London insurer Novae Group Plc said it had agreed to be taken over by Axis Capital Holdings Ltd, a Bermuda-based speciality insurer and reinsurer, for 467.6 million pounds ($605.07 million) in cash, sending its shares soaring over 20 percent.

The 700 pence per share offer for Novae represents a premium of over 20 percent to the London-based insurer's closing price on Wednesday.

Axis Chief Executive Albert Benchimol said the acquisition of Novae, which covers property, casualty, marine, aviation and political risk, would create an about $2 billion player in the London speciality market.

The deal, expected to close in the final quarter of the year, will add to Axis' earnings in the first year and allow it to bulk up in the Lloyd's insurance market."It (Novae) remains a relatively small player in a global industry. Axis is a substantial and successful business which represents an excellent partner for the Novae business, its customers and employees," John Hastings-Bass, chairman of Novae, said.

Axis operates in the United States, Europe, Singapore, the Middle East, Canada and Latin America. "It (the deal) also allows Novae to continue to invest and grow its Lloyd's speciality insurance business backed by a strong capital base," Peel Hunt analyst Andreas van Embden wrote in a note.

The deal has no termination fee, implying confidence from both parties that a counterbid was unlikely, said Eamonn Flanagan, analyst at Shore Capital.

Insurers have been preparing for a wave of mergers and acquisitions, as valuations in the Lloyd's insurance market became more attractive to overseas buyers due to a fall in the value of the pound after Britain voted to leave the European Union. Lloyd's companies such as Hiscox, Lancashire and Beazley have long been seen as acquisition targets.

"All three offer significant benefits to an acquirer, over and above the access to Lloyd's with all its accompanying advantages," Flanagan said.

Insurers Amlin, Brit and Catlin were bought by international peers in recent years.

Lancashire was the top gainer on the FTSE Midcap Index , while Beazley was the third largest gainer. Novae's shares were up 22 percent at 709.5 pence at 0742 GMT. Credit Suisse International and Fenchurch Advisory Partners LLP are the financial advisers to Axis, while Evercore is advising Novae.