Enstar Group Ltd has made a $31 a share offer to buy fellow Bermudian insurer Watford Holdings Ltd, which values the company at about $616 million.The offer came in a letter to the Watford board, signed by Paul O’Shea, Enstar’s president and dated September 30. The cash offer from Enstar, which specialises in acquiring and managing assets in run-off, represents a 35.1 per cent premium over Watford’s closing price on the Nasdaq Stock Exchange on Wednesday. Yesterday, Watford’s shares surged more than 25 per cent in response to news of Enstar’s offer and closed at $28.81.Casualty insurer and reinsurer Watford, which formed in 2014 and which floated on the stock market last year, outsources its underwriting operations to another Bermuda re/insurer, Arch Capital, which also owns 12.6 per cent of Watford.It was reported in early September that a consortium led by Arch offered about $500 million, or about $26 a share to buy out Watford.Enstar already holds a 9.1 per cent stake in Watford. In the letter to Watford’s board, which appears in a regulatory filing, Enstar states: “We have recently increased our shareholding given our view that the current share price undervalues the true economic value of Watford. “We understand that the board of directors of Watford have hired Morgan Stanley to help evaluate strategic options for the company. “We would be pleased to engage with Watford and its board to help provide a solution and are pleased to provide you with our non-binding indicative proposal for the acquisition of 100 per cent of the ordinary share capital of Watford.”