NEW YORK (TheStreet) -- Shares of XL Group (XL) were falling 5% to $33.25 Wednesday after the insurance provider confirmed it is engaged in preliminary discussions with rival insurance provider Catlin about a potential transaction.
The two companies are discussing the possibility of XL Group acquiring Catlin, or of the two merging to form a combined company. XL Group said that there is no assurance the discussions will result in a transaction, not is there any certainty any transactions would proceed.
"Both XL and Catlin - respected, innovative, global P&C firms - are well positioned on their own," XL Group CEO Mick McGarvick said in a statement. "However, we both believe that we will be far better positioned and stronger together. We see this transaction as deeply accelerating the strategies of both companies."
TheStreet Ratings team rates XL GROUP PLC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate XL GROUP PLC (XL) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income."