UPDATE 1-Catalina Holdings to buy Quanta Capital for $197 mln

(Recasts; adds details, share movement)

May 30 (Reuters) - Specialty insurer and reinsurer Quanta Capital Holdings Ltd QNTA.O agreed to be acquired by privately held Bermuda-based Catalina Holdings Ltd for $2.80 a share in cash, in a deal value at about $197 million.

Catalina's per-share offer is 55 percent more than Quanta Capital shares' Thurday closing price of $1.88 on Nasdaq.

Shares of Quanta were up 42 percent at $2.67 in morning trade, making it the highest percentage gainer on Nasdaq.

Catalina Holdings (Bermuda) Ltd, whose shareholders include the investment arm of Royal Bank of Scotland (RBS.L), acquires and manages non-life insurance and reinsurance companies and portfolios in run-off.

Friedman, Billings, Ramsey & Co Inc was acting as Quanta's financial advisor and Baker & McKenzie LLP was acting as its legal advisor. Morgan Stanley and Allen & Overy LLP advised Catalina in connection with the transaction. (Reporting by Supantha Mukherjee in Bangalore; Editing by Pratish Narayanan)