Mega hedge fund D.E. Shaw & Co. certainly likes insurance plays. The most recent deal: the $575 million buyout of the James River Group (NASDAQ: JRVR).

The firm provides property and casualty insurance coverage across 48 states. In fiscal Q1, earnings increased 49% to $10.1 million.

But with D.E. Shaw's heft, James River should scale its business even more.

I had a chance to interview Gene Mueller, who is a managing partner at Mueller Carey Companies and an expert on insurance. According to him:

"In this proposed deal, investors reacted poorly on day one to slightly below-market pricing. But of course, not every deal that's signed actually closes on the same terms. Here, there doesn't appear to be a meaningful no-shop clause, and no financing contingency, indicating that the buyer, investment manager D.E. Shaw, may be looking at a financial play. Despite a termination fee of some $7MM, that would be only a little over 1% of the deal price. Hard to predict, but maybe this is just a toe in the water for the target. James River is a very well-run company, so I would expect others to take close look at the proposed pricing. I would say stay tuned on this one."

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.