property and casualty reinsurer for $637 million, or $27 a share.

Both companies's headquarters are based in Bermuda. EXEL currently owns 1.2 million GCR shares, representing about five percent of the 24.8 million shares outstanding. EXEL will pay cash for the remaining shares in a tender offer which will begin no later than May 14, according to a press release.

Gavin Arton, EXEL's senior vice president of investor relations, said it was unlikely that there would be a counter offer for GCR as the boards of directors of both companies had unanimously approved the acquisition.

Major shareholders include The Goldman Sachs Group and Johnson & Higgins in New York. The two firms and company executives collectively hold a total of 12 percent of GCR shares.

GCR's shares rose 22 percent or $4.75, to $27 1 yesterday morning on the Nasdaq. EXEL's share rose $1.75 to $41 3 on the news. Mr. Arton said investors were paying a higher price for GCR than the tender offer based on an anticipated dividend payout at the end of May.

The purchase will boost EXEL's assets to about $5.53 billion from $5 billion.

For its first quarter ended February 28, EXEL's gross premium was $104.4 million. GCR's gross premium written in its second quarter ended March 31 was $66 million.

EXEL's purchase follows ACE Ltd. acquisition of catastrophe reinsurer Tempest Reinsurance Co. last year for about $744 million in stock and cash. ACE had successfully overcoming a rival offer from IPC Holdings Ltd, another Bermuda-based reinsurer.

Mr. Arton said it was "premature'' to call the acquisitions a trend in the marketplace. "There has certainly been a number of companies combining not just in Bermuda but worldwide,'' he said. "The feeling is that bigger is better.'' The tender offer is contingent on EXEL acquiring 75 percent of the outstanding shares. Cayman Islands law, under which both companies are regulated, considers the holding of 75 percent of a company as an amalgamation. If EXEL manages to acquire at least 90 percent of GCR then other shareholders will be forced to sell their shares. Mr. Arton said EXEL was "confident'' that it would be able to acquire at least 75 percent of GCR.

Brian O'Hara, President and Chief Executive Officer of EXEL Ltd., said in a written statement GCR's "disciplined approach to underwriting'' was a good fit for the company.

"GCR's philosophy to underwrite for a profit rather than premium volume matches our own,'' he stated. "The combination of GCR's relatively short tailed lines of business and EXEL's predominantly longer tailed liability book provides the combined organisation with further spread of risk and diversification. Additionally, the amalgamation of the two companies should be accretive to 1997 earnings and result in increased shareholder value.'' Lawrence Doyle, GCR President and Chief Executive Officer, will become an executive vice president of EXEL when the purchase is complete. He will also serve as president and chief operating officer of GCR. Mr. O'Hara will become GCR's chairman and CEO.

GCR was established in 1993 and provides reinsurance through wholly owned subsidiary Global Capital Reinsurance Ltd.