XL Group plc’s acquisition discussions with Catlin for a rumored $3.97 billion-plus aren’t exactly wowing investors. Media outlets reported that the insurer and reinsurer’s stock dropped nearly 4 percent after the potential M&A was first disclosed on Dec. 17.

The stock closed at $33.16 on Dec. 18, down another 1.5 percent.

Analysts offered mixed responses so far, even though there’s no guarantee that their negotiations will come to a final agreement.

Nomura Research analysts Clifford Gallant and Matthew Rohrmann said in a Dec. 17 research note that this could lead to “near-term weakness in the shares.”

“Terms, timing, cost savings, risk of overlap in business, and plans for retaining key people and accounts are among the many questions which will need to be addressed. Without clarity, we remain Neutral on the shares,” Gallant and Rohrmann wrote. At the same time, they also said they have “high regard” for the XL management team, which helped revamp the company in the wake of the 2008 financial crisis.

As well, as Seeking Alpha reported, Bernstein downgraded XL’s stock in the wake of the deal discussion announcement to Underperform from Market Perform.

XL CEO Mike McGavick touted the possible merger as something that would benefit both companies, particularly on the reinsurance front, creating a top 10 player in the sector that can be more relevant to clients and brokers. Also, McGavick said the combination would create a leader in both the global specialty and property cat markets.

Catlin itself is a formidable entity, launched by Stephen Catlin in 1984. It is now the biggest syndicate at Lloyd’s and has expanded on four continents.