Ariel, the Bermuda-based insurer, is thought to be running the rule over Lloyd's of London specialist Chaucer Holdings.
Ariel is being advised by banking group Hawkpoint, which acted for it during the £193m acquisition of Atrium in 2007.
Chaucer shares have halved in price in 2008, closing on Friday at just 44.75p, for a valuation of £156m. Its pre-tax profits for the first six months of the year came in at £3.9m, against £47.9m a year earlier. It has suffered losses on investments in shares and private equity, as well as from hurricane claims.
Chaucer was described last month as "a sitting duck" for a takeover, amid speculation that Lloyd's in-surer Amlin could be preparing a bid. Ariel declined to comment.Reuse content