By Supantha Mukherjee and Sweta Singh

BANGALORE, Sept 15 (Reuters) - It's cash-rich, led by a CEOwith political aspirations, and was last year's top S&P 500performer.

Pressured by soft pricing and slow premium growth,reinsurer XL Group is also undervalued, analysts say, and aprime target for a bidder with $10 billion to spend and an eyeon expanding into Bermuda, the world's biggest offshorereinsurance centre.

Canada's Fairfax Financial and Berkshire Hathaway, led bybillionaire investor Warren Buffett, are among those cited byanalysts as potential bidders, attracted by XL's $31.7 billioninvestment portfolio.

More plausibly, large European reinsurance groups such asMunich Re, Swiss Re or Allianz -- all sitting on billions ofdollars in cash -- could be potential suitors who recognise thevalue of a Bermuda platform.

"XL derives a lot of business from Bermuda and that mightentice a large foreign reinsurer looking to enhance itsplatform by adding a Bermuda presence," said Michael Paisan atStifel Nicolaus.

With more than half its premium volume originating outsidethe United States, Ireland-headquartered XL offers geographicand product diversification, a favorable tax status, and aplatform that can generate a materially higher return on equitywith the right kind of partnership.

XL stock, which trades at just above $20, has an economicbook value of $34. This means if the company were liquidated,its investors would pocket $8.70 more than its tangible bookvalue, analyst Bijan Moazamio of FBR Capital Markets said.

"No insurer in our coverage universe has a larger gapbetween its economic BV and tangible BV than XL," he said.

XL CEO Michael McGavick, 52, ran as a Republican candidatefor the U.S. Senate in 2006, and is seen as a a personmotivated enough to sell up if the right offer comes along.

McGavick, who stands to make $16.6 million from a possiblesale of XL, was key to turning around Seattle-based insurerSafeco, which was sold to Liberty Mutual at a big premium in2008 just after he left the company.

McGavick took over at XL at a time when the reinsurer washit hard by structured finance losses at majority-owned bondinsurer Syncora Capital.

Analysts credit McGavick with turning around XL, whoseshares jumped fivefold last year, while the S&P 500 indexgained 29 percent.

"If given the right price, McGavick would certainlyentertain offers," said Paisan at Stifel Nicolaus.

XL declined to comment on the possibility of a takeover --one which analysts said could trigger consolidation in Bermuda,where pricing in the reinsurance sector is soft and businessgrowth is slow.

"Acquisition offers the only potentially prudent means ofgrowth in a softening pricing environment," said Bill YankusatMacquarie Research. (Reporting by Sweta Singh in Bangalore, Editing by IanGeoghegan)