Bermuda-based Lancashire Holdings has announced that its shareholders have voted through its proposal to acquire Cathedral Capital, a privately owned Lloyd’s insurer.Lancashire’s investors last Thursday voted more than 99 percent in favour of its 266 million-pound ($416 million) acquisition of Cathedral, a Lloyd’s of London insurer, from Alchemy Partners and Cathedral’s management.Shares of Lancashire, a registered insurer of the Costa Concordia cruise liner, rose for a third day Friday after it was announced shareholders approved the acquisition of Cathedral Capital, and Credit Suisse upgraded the company’s stock.The shares advanced 1.8 percent to 751 pence in London, where Lancashire has its head office.The volume of shares traded was more than double the three-month daily average.Concern among investors about Lancashire’s ability to continue paying special dividends following its acquisition of Cathedral was “overdone,” Adam McInally, an analyst at Credit Suisse, said in a note to clients.Bloomberg reported that McInally raised his recommendation on the stock to outperform from neutral while cutting his 12-month price target to 860 pence from 920 pence.“The capital efficiencies resulting from the deal, as well as the already strong capital position pre-acquisition, should allow Lancashire to pay a special dividend” in the fourth quarter of this year and the first quarter of 2014, leaving the stock trading on a yield of more than 10 percent, McInally said.According to Bloomberg, UBS AG removed Lancashire from its most preferred list on the Cathedral transaction after downgrading the stock last month to neutral from buy.The purchase is a departure from its previously stated strategy and makes it harder to estimate future earnings, analyst Angela Gu said in a note.Martin Thomas, chairman of the company’s board, stated: “The board is pleased with our shareholders’ strong support for the proposed acquisition of Cathedral.“This is a rare opportunity to acquire a high-quality Lloyd’s business with short-tail focus, strong business model fit and robust underwriting performance.“The acquisition will create value for Lancashire’s shareholders at a time of change in the market.“It strengthens and diversifies Lancashire’s core underwriting business and we expect the Cathedral team will enhance Lancashire’s competitive positioning.”Richard Brindle, the Company’s CEO, commented: “The acquisition of Cathedral represents an exciting and welcome addition to the Lancashire Group.“Cathedral is an ideal partner for Lancashire, being a well-respected and well-run business within the Lloyd’s market that will complement Lancashire’s existing underwriting base.“I am very much looking forward to working with the Cathedral team to enhance the enlarged group’s business and performance for the long term.”