LONDON (Bloomberg) — Apollo Global Management and CVC Capital Partners Ltd. agreed to buy Brit Insurance Holdings NV for as much as £888 million ($1.4 billion), ending four months of takeover negotiations.

The private equity firms' 1,045 pence-a-share offer, which follows four previous approaches, was accepted by the Lloyd's of London insurer's board, led by chairman John Barton, Amsterdam-based Brit said yesterday in a statement. Apollo and CVC will cover Brit's dividend by paying 30 pence a share on December 7 and may make a further payment of as much as 25 pence a share in cash.

"We've listened to our shareholders very closely throughout the process, and it seems from what they told us that they believe this a price they would feel comfortable in accepting," Brit chief executive officer Dane Douetil said in an interview. "There's no doubt this is a low point in the sector's cycle and businesses are selling for a lot less than their intrinsic worth."

Lloyd's insurers have become cheaper takeover targets after earnings fell because of more competition caused by an abundance of capital built up after two years of relatively few natural catastrophes. Fellow Lloyd's insurer Hardy Underwriting Bermuda Ltd. last week rebuffed a £155 million bid from larger rival Beazley Plc, saying the offer undervalued the firm.

The bid for Brit is 47 percent to 51 percent more than the insurer's closing share price of 729 pence on June 10, the day before Apollo's first offer was announced. Brit rose 2.2 percent to 1,043 pence as of 12:38 p.m. in London.

"The terms are largely as expected," said Ben Cohen, a London-based analyst at Collins Stewart Plc with a "hold" rating on Brit. "They are reasonable terms. Given the somewhat volatile track record of Brit it probably does make sense to accept the offer."