Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of property and casualty insurer Flagstone Reinsurance Holdings (NYSE: FSR) were flying high today, waving around a gain of as much as 24% in intraday trading.

So what: The reason for the big jump in Flagstone's shares is pretty straightforward -- Bermuda-based insurer Validus (NYSE: VR), has agreed to acquire Flagstone in a cash-and-stock transaction. In the deal, Flagstone shareholders will get $2 per share in cash along with 0.1935 Validus shares. At the time of this writing, that equated to a total price of $8.47 per share, which is roughly 20% above Flagstone's previous closing price.

Now what: It is certainly possible that another, higher offer could come in for Flagstone, but I wouldn't bank on that if I were a Flagstone shareholder. Flagstone's board has already given the OK for the deal and major shareholders representing roughly 23% of Flagstone's shares have said they'll vote in favor of the deal. At this point, then, the math that investors need to be thinking about is whether they want to become Validus shareholders, since $6.47 -- or more than three-quarters of the total per-share value of the deal -- is in the form of Validus shares. So investors can either hang on and become backers of the combined company, or sell now and find a better place for their now-20%-more-valuable capital.

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