Validus Holdings Ltd is reportedly in takeover talks with fellow Bermuda reinsurer Ariel Re, according to a report in the UK trade press.The Insurance Insider cites sources who claim that Ariel Re has invited Validus to undertake due diligence on the deal.Senior executives at both companies yesterday had no comment on the report when contacted by The Royal Gazette.Both companies were part of the ‘Class of 2005’ wave of companies to set up on the Island in the wake of Hurricane Katrina. Ariel is privately held, while Validus trades on the New York Stock Exchange.If Validus pulls off the deal, it would be a second acquisition of a Bermuda reinsurer, following the $1.77 billion cash and shares deal to take over IPC Holdings in 2009.Ariel, which has offices on the fifth floor of Victoria Place in Hamilton, had shareholders’ equity of $1.27 billion at the end of September last year, according to the financial statements on its website. During the third quarter, it paid out $400 million in dividends to shareholders, the figures show.Ariel also has offices in Switzerland and Brazil, countries where Validus does not yet have a physical presence.Validus Re is based in the Bermuda Commercial Bank building on Par-la-Ville Road, Hamilton.Should the merger go through, there would be some overlap between the two companies’ lines of business. Both firms write reinsurance in property, marine and energy and aerospace lines, for example. After Validus acquired IPC, 16 of the 30 jobs at IPC were cut.It is not the first time Ariel has featured in takeover rumours. In December 2009, reports in the British media claimed Ariel was close to reaching a merger agreement with Aspen Insurance Holdings Ltd, another Bermuda company.The reports quoted London market sources as saying that Ariel had two other suitors before Aspen and due diligence was performed on Ariel on all three occasions before the failure to reach a deal.The founder and former chairman and CEO of Ariel, Don Kramer, did not make any secret of his desire to take Ariel public.In an interview in the November/December 2009 edition of The Bottom Line magazine, Mr Kramer said: “We are privately owned, the next step is to get some recognition and find a way to join the publicly owned fraternity either through a public offering or a potential merger, so we can continue to build a franchise. That is my goal.“Staying private worked well for us. But now it is time to look for opportunities to be a broader, bigger company, because size now matters and diversification matters.”Since then Mr Kramer has retired and has been replaced by Tom Hulst as CEO. George Rivaz is chairman.Last week, Validus announced a full-year profit of $402.6 million for 2010. Its shareholders’ equity at the end of 2010 was $3.5 billion.