Investors appear to have faith that Navigators CEO Stan Galanski will make good use of a 30-day “go shop” provision in a $2.1bn deal that could see his firm acquired by The Hartford.

Earlier today, the two firms revealed that they had reached an agreement that could see The Hartford buy Navigators for $70 a share in cash.

However, the deal - which allows Galanski a month to find a higher bidder - represents a mere 8.9 percent premium to yesterday’s closing price.

Navigator’s shares climb after The Hartford’s bid

And investors seem to think they can do a bit better. Half an hour after the opening bell rang on New York’s Nasdaq exchange, shares in Navigators were trading hands for around $70.05, slightly above The Hartford’s offer.

Meanwhile, investors punished The Hartford, which said the deal could cause an “immaterial” reduction in net income for 2019. Shares in the carrier were changing hands for as little as $50.36 after the New York Stock Exchange opened this morning, a reduction of 3.8 percent on yesterday’s close.

But The Hartford said that by 2020, the deal was likely to add between $30mn and $75mn to net income with additional core earnings of between $60mn and $95mn, despite an expected reduction of around $50mn in net investment income.

The lower investment returns would be a direct result of the deal, which The Hartford said would reduce its investment float.

The Hartford said it has sufficient funds to pay the total purchase price in cash, although it noted that it would consider alternative sources of capital prior to the closing.