Omega Insurance also confirmed that its issued share capital as at the close of business on April 02, 2012 consisted of 244,229,862 common shares of $0.10 each.

The company said it will consult with its shareholders and a further announcement will be made when appropriate.

There can be no certainty that a formal offer from Canopius will be forthcoming on these or other terms, Omega added.

Bermuda-based Omega Insurance posted last month a pre-tax loss for the full year 2011 of $94.71 million, wider than $42.94 million in the previous year.

In January Omega  rejected a “merger of equals” proposal made by its Lloyd’s of London peer Barbican.

That overture came after a tortuous and ultimately fruitless offer period for Omega which began a year earlier with an initial approach from Canopius Group Ltd.

After a flurry of proposals in the fall, including one from Barbican and Carlson Capital, Bermuda’s Haverford Ltd. — owned by locally based reinsurance entrepreneur Mark Byrne –gained Omega’s de facto backing for a partial tender.

Haverford later launched a tender for a 25 percent stake in Omega worth up to 83 pence per share but controversially allowed it to lapse in November after its target’s performance deteriorated.

Mr. Byrne’s company tried unsuccessfully to open talks about a lower offer and eventually walked away on December 23.

President & CEO John Wight stated that “We are proud to be announcing the acquisition of a market leader in the Caribbean. It is BF&M’s strategy to enhance our footprint in the Caribbean region.

“The acquisition by BF&M of Island Heritage is part of the company’s strategic goal of becoming a major insurer in the Caribbean region. Island Heritage has a talented team of experienced insurance professionals, and we look forward to working collaboratively with them to enhance their product and service offerings.”

BF&M comprises many companies with operations dating back over 100 years. Its two principal operating companies BF&M “General” and BF&M “Life” are rated “A” Excellent by rating agency AM Best. There is no domestic insurer in Bermuda or the Caribbean with a stronger rating

“We look forward to embracing ITS into the BAS Group of Companies,” said Kenneth Joaquin, Group President.

“We strongly believe that the addition of ITS into our family of companies will compliment the services already provided across the group. ITS will be a great asset. This addition to the group further enhances BAS’s ability to provide the full service experience and in doing so bring added choice and value to our clients.”

Gregory Woods, the founder and Chief Executive Officer, of ITS stated “I had decided to restructure my investment in ITS and consequently I undertook an extensive exercise to determine the appropriate potential partners.

“I am extremely pleased that BAS will merge with ITS as we share core values in supporting the ITS team, providing for continued investment in the company and further enhancing the excellent service ITS provides to its expanding customer base.

“I am pleased that ITS is now a member of an esteemed group of companies and I look forward to developing the synergies that exist within the group.”

ITS is an innovative company in Bermuda’s technology sector, providing both commercial and residential solutions. Commercial solutions that include; Board Room/Training Room Audio-Visual Systems, Electronic Automation Systems, Electronic Presentation Systems, Facility-wide Public Address Speaker Systems, Lighting Control, Small Office Data Networks, Window Treatments, Digital Signage Software Systems and Closed Circuit TV Systems. While ITS’s residential solutions cover everything from Security to Entertainment to Communications and Home Automation.

BAS is a Bermudian owned and based company incorporated in 1947. The BAS Group of Companies consists of: Aircraft Services Bermuda Ltd. (ASB), BAS-Serco Ltd, International Bonded Couriers Ltd. (IBC), Weir Enterprises Ltd., Otis Bermuda Ltd., CCS Group Ltd. and the most recent addition, Integrated Technology Solutions Ltd.

“The directors of Omega note the press speculation concerning the company and the movement in its share price,” the stock exchange circular said.

“The company confirms that it continues to review possible options to increase value for its shareholders, which include an offer for the company.”

Industry observers have suggested that non-life insurance and reinsurance player Catalina has put in an offer for Omega but analysts have said the Lloyd’s insurer is likely to reject the deal.

Eamonn Flanagan, an analyst at Shore Capital, told the financial website Postonline: “Catalina has no chance. The big appeal factor for anyone buying Omega is its surplus capital.

“Omega is a PLC so anyone can bid on it. Omega won’t take the offer seriously. Shareholders don’t want Omega to go into run-off.

“If they did, the sensible thing would be to shut it down and put the business out to tender and have a proper auction. Not accept the first offer it gets.”

In January Omega  rejected a “merger of equals” proposal made by its Lloyd’s of London peer Barbican.

That overture came after a tortuous and ultimately fruitless offer period for Omega which began a year earlier with an approach from Canopius Group Ltd.

After a flurry of proposals in the fall, including one from Barbican and Carlson Capital, Bermuda’s Haverford Ltd. — owned by locally based reinsurance entrepreneur Mark Byrne –gained Omega’s de facto backing for a partial tender.

Haverford later launched a tender for a 25 percent stake in Omega worth up to 83 pence per share butcontroversially allowed it to lapse in November after its target’s performance deteriorated.

Mr. Byrne’s company tried unsuccessfully to open talks about a lower offer and eventually walked away on December 23.

World Distributors will now be the authorised dealer for Honda and Piaggio motorcycles in Bermuda.

The product line-up will expand to include Honda, Piaggio, Vespa, Aprilia, Derbi and Gilera brands.

In addition, World Distributors will be offering after sales, parts and service for Honda and Piaggio. Currently, World Distributors is the only authorised dealer of Yamaha motor bikes in Bermuda.

“We’re excited to grow our product offering,” said Eugene Bothello, president of World Distributors. “The combination of quality products and stellar service from highly experienced staff will continue to be the cornerstone of our business.”

The cycle division at HWP Group will officially close on March 28 with Piaggio and Honda operations to begin again at World Distributors on April 9.

World Distributors’Eugene Bothello on the left, HWP’s Jonathan Brewin on the right:

“With the loss sustained from last year’s fire, we had to be strategic about our business and decided that we needed to focus on our core business of automotive sales and after sales including parts and service as well as our service stations on St. John’s Road and East Broadway,” said Jonathan Brewin, President & CEO of HWP Group.

“We’ve been in business with Honda motorcycles and Piaggio for over 50 years and it was very important to us that we nominated a successor that would represent these brands well. We’ve been working in conjunction with Eugene to ensure a smooth transition and we are confident that World Distributors will continue to offer the best service and after sales platform for Honda and Piaggio in purpose-built facilities.”

All warranties for customers who purchased a bike at HWP Group will be honoured at World Distributors.

“This is just the beginning for us,” said Mr. Bothello. “In addition to the largest cycle showroom in Bermuda with about 4,000 sq ft of product display, we will be unveiling exciting new plans for retailing.”

As a result of the acquisition, there will be six redundancies at HWP Group while World Distributors will be increasing its staff to handle the additional workload.

“Both companies will be actively working together to help redundant employees secure new employment,” said Mr. Brewin. “I would like to thank these employees for their years of service to HWP Group. Our key priority right now is to assist them in finding alternative employment as swiftly as possible.”

Mr. Bothello added: “Consolidation is key in this shrinking market. Cycle sales have decreased 30 per cent in Bermuda since 2006 and, in order to remain viable, we have had to look at creative strategies to grow our business in the current deteriorating market conditions.

World Distributors is located at 32 North Street in Hamilton across from TCD. For more information, call 295-2329.

Commenting on the Acquisition, Thomas F. Motamed, Chairman and Chief Executive of CNA said: “We are delighted to have reached this agreement. Hardy is a specialist insurer and reinsurer with a respected brand and a long and distinguished history of disciplined underwriting in the Lloyd’s market.

“While Hardy’s recent results reflect the extraordinary level of natural catastrophe losses across the global insurance industry, the Hardy franchise is built on a strong foundation and has a bright future. The proposed Hardy acquisition significantly expands CNA’s global capabilities and aligns well with our specialized underwriting focus.”

“Hardy and CNA share similar underwriting and management philosophies. We are pleased that Barbara Merry, Chief Executive, and Patrick Gage, Director of Underwriting, will continue to lead their outstanding team,” said Mr Motamed.

David Mann, Chairman of Hardy said: “Since announcing our strategic review in December 2011, a thorough and transparent process has been conducted. The interest shown in Hardy during the strategic review process demonstrates the underlying quality of Hardy’s business, people and franchise.

“CNA is a highly regarded insurer with an international presence and a strong reputation for delivering outstanding client service. The Board believes that CNA’s offer represents the most attractive outcome for our shareholders and will enhance Hardy’s business in the interests of our customers, partners and employees.”

This summary should be read in co

The international insurance and reinsurance group also saw a 14.5% reduction in gross written premiums in 2011 to $304.6 million [2010: $356.1 million] and a deterioration in its combined operating ratio to 134.3% from 114.4% the previous year.

Omega, one of the smallest listed insurers operating in the Lloyd’s market, also cancelled its dividend.

The Bermuda-domiciled provider highlighted that of its 102.2% claims ratio 37.5% arose from catastrophe losses. The company revealed that in the year to 31 December 2011 it was hit by $85.6 million of catastrophe losses net of reinstatement premiums.

Richard Pexton, chief executive officer of Omega said: “This has been a difficult year, with an unprecedented frequency of large catastrophe losses, together with a frustrating corporate activity process.

“During 2011, we have continued the repositioning of our business which is now aligned with the board’s current risk appetite. We are seeing encouraging signs in the market with re-pricing in our core classes, with 60% of our portfolio showing increases of more than 5%.”

He concluded: “We remain a well capitalised business.

“The transformation of our business mix and positive pricing movements we are now seeing leave us in a good position to take advantage of market opportunities in 2012.

Omega, which rejected three takeover bids last year, provided no details of further acquisition interest alongside its 2011 results, stirring fears suitors might look elsewhere.

The company, which last year rebuffed offers including an 83 pence per share proposal from rival Canopius and in January turned down an approach from Barbican, described the failed takeover attempts as “unsatisfactory,” but did not say whether it had since come any closer to doing a deal.

“The risk remains that the longer this company is allowed to limp on as an independent entity the less there is that will be of value to a third party acquirer,” analysts at stockbroker Peel Hunt wrote in a note. “Independent shareholders should take decisive action to secure what little value is left.”

The stock has lost 50 percent of its value in the past year, having peaked at about 172 pence in 2008.

In 2011, insurers absorbed over $100 billion in claims from natural disasters including Japan’s Tohoku earthquake, making it the industry’s second-costliest year on record.

Smaller Lloyd’s players are seen as ripe for consolidation because persistently weak insurance prices have weighed on their shares, with proposed tighter capital requirements for European insurers adding further pressure.

Omega also received approaches last year from Lloyd’s rival Novae, as well as Bermuda-based reinsurer Haverford, which wanted to buy a 25 percent stake in the company at 74 pence per share.

The ratings of Ariel Re reflect its strong level of risk-adjusted capitalization, favorable operating performance and solid enterprise risk management capabilities.

These strengths are partially offset by Ariel Re’s limited business profile following the company’s recent announcement that it has entered into a definitive agreement with the Goldman Sachs Group, Inc. for the eventual sale of its Bermuda-based property, marine and aviation businesses.

A Best analyst said: “As a result of this transaction, Ariel Re will be a much smaller entity with a significantly reduced risk profile. Ariel Re will continue to assume the business underwritten by its Lloyds affiliate, Atrium Underwriting Group Limited, under an existing quota share arrangement that will remain in force.

“This business has historically proven to be very profitable for Ariel Re and it will in effect be managed by the successful management team at Atrium Underwriting Group Limited, subsequent to the closing of the transaction, which is expected during the second quarter of 2012. It also is planned that Ariel Re will be renamed Arden Re as the Ariel brand name will be sold to Goldman as part of the announced transaction.”

The ratings agency said the risk-adjusted capitalization, subsequent to the close of the transaction, also is expected to remain supportive of the current ratings and considers the counter party credit exposure that will result from a loss portfolio transfer of underwriting liabilities to Goldman’s Lloyds syndicate.

This credit exposure also is somewhat mitigated by collateral that will be held through the run off of these obligations.

The outlook reflects A.M. Best’s expectation that the overall operating results will remain positive and the risk-adjusted capital levels will continue to be supportive of the current ratings. A.M. Best will continue to monitor this transaction through to its closing. Should there be any material departure from the Arden Re business plan that was shared with A.M. Best, which is not anticipated, the current ratings will be re-evaluated.

Rating factors that could lead to Ariel Re’s ratings being upgraded would be the continuation of a long-term, consistently strong operating profitability and the maintaining of excellent risk-adjusted capital levels. The rating factors that could lead to a negative outlook or rating downgrades include unfavorable operating profitability trends, outsized investment losses and a significant decline in the company’s risk-adjusted capital that would not be supportive of the current rating level.

The acquired business will operate as part of Goldman Sachs Reinsurance Group [GSRG], under the brand name of Ariel Reinsurance.

Ariel Re’s existing business will be reinsured by GSRG’s Lloyd’s syndicate and clients will experience a seamless transition and continuity of service. The majority of Ariel Re’s Bermuda-based staff will continue their employment with the combined organization.

“We’re excited to combine our business with Goldman Sachs at a time of significant market opportunity,” said George Rivaz, chairman of Ariel Re.

Ariel Re was created in Bermuda by insurance entrepreneur Don Kramer in late 2005 in the wake of hurricanes Katrina, Rita and Wilma.

Tom Hulst, chief executive officer at Ariel Re added: “the transaction combines two organizations with excellent underwriting track records and creates a superior platform from which to build on that performance.”

“The Ariel franchise adds scale, breadth and a deep talent pool from which to better serve our clients,” said Tom Milligan, a managing director and co-head of Goldman Sachs’ Property and Casualty Reinsurance business. “Ariel Re’s deep-rooted focus on an analytical and transparent approach to taking risk fits well with our own.”

This transaction does not include Ariel’s credit and surety business run through its Zurich branch office nor its Atrium Underwriting Group at Lloyds, which will continue to be owned and operated by Ariel Holdings Ltd.

The transaction is expected to close on April 1, 2012, subject to regulatory approvals. The purchase price of the transaction was not disclosed.

The Goldman Sachs Group, Inc. is a bank holding company and a leading global investment banking, securities and investment management firm.

Goldman Sachs provides a wide range of services worldwide to a substantial and diversified client base that includes corporations, financial institutions, governments and high net worth individuals.

Founded in 1869, the firm is headquartered in New York and maintains offices in London, Frankfurt, Tokyo, Hong Kong and other major financial centers around the world.

Velasco, who managed Chile’s economy during the 2008 and 2009 financial crisis, also is a visiting professor at Columbia University’s School of International and Public Affairs and founding partner of Santiago-based economic research company SCL Partners.

Lazard offers financial advisory and asset management services from some 40 offices in the Americas, Asia, Australia, and Europe.

Its investment banking arm provides advice on mergers and acquisitions, strategy, and restructuring and corporate finance services; specialties include the consumer, health care, energy, real estate, media, and telecommunications sectors.

Lazard has some $155 billion in assets under management, most of it in international equities; it primarily serves institutional investors as well as governments and wealthy individuals.

Mr. Cecil recently left Scotia and plans to join Lazard later this year, said a source who spoke on condition of anonymity. Mr. Cecil was co-head of the Scotia Waterous investment-banking unit in the US, according to a profile that previously appeared on Scotia’s website.

Mr. Cecil is at least the second senior banker that Lazard, the largest independent merger adviser, wooed to its energy advisory group this year, with Mark Renton, a former vice chairman at Citigroup Inc., joining this month. Mr. Cecil was among the bankers who advised on the biggest oil exploration and production deal of 2011, BHP Billiton Ltd.’s $12.1 billion acquisition of Petrohawk Energy Corp., according to “The Deal” magazine.

In 2010 and 2011, when the oil and gas industry announced a record $557.3 billion of mergers, Lazard worked on $7.7 billion of them, according to data compiled by Bloomberg. That put the Hamilton, Bermuda-based firm in 34th place on those types of deals, compared with its No. 10 ranking overall, the data show.

Beazley, which abandoned a $284.7 million offer for Hardy in 2010, today [Feb.7] also reported a 75 percent slump in its 2011 profit as catastrophe-related claims more than doubled.

Beazley chief executive Andrew Horton said the company’s latest initiative to acquire the Bermuda company, launched before Christmas, would probably trigger interest from other potential acquirers.

“Nobody else has actually announced they’re interested, but the information we get is that is that it’s going to be competitive,” he told the Reuter news agency in an interview, adding he had “no idea” who the other potential bidders were.

“We will go through the process in a disciplined manner, and hopefully we will be successful,” Mr. Horton said.

Lloyd’s insurers are seen as ripe for consolidation because persistently weak insurance prices have weighed on their shares, opening up potentially attractive takeover opportunities.

Net income fell to $1.4 million, or one cent a share, from $104.5 million, or 76 cents, in the same period a year earlier, the Hamilton-based firm said in a statement.

Revenue from mergers and acquisitions [M&A] activity plunged 36 percent to $167.1 million from the year earlier, according to the statement.

Global announced deal volume fell in the third and fourth quarters as a downgrade of US debt and the European sovereign- debt crisis stoked investor concern of a worldwide recession.

Lazard, run by Chief Executive Officer Kenneth Jacobs, 53, ranked ninth on the financial advisory league tables last year, overseeing $232.6 billion in announced transactions, according to data compiled by the Bloomberg financial news network.

“We saw turmoil in the markets beginning in the summer, and by the mid fourth-quarter, you were really feeling the impact of that,” Mr. Jacobs told Bloomberg after the results were announced. “Things that were started didn’t get completed. Things that were almost done got pushed off. That’s the nature of what happens when you get periods of turmoil.”

Financial advisory revenue, which includes fees from overseeing M&A, capital markets and restructuring, fell 26 percent to $260.5 million in the fourth quarter from the same period a year earlier, according to the statement. Full-year revenue for the segment declined 11 percent to $992.2 million from 2010.

Asset management revenue was $204.4 million in the three months-ended Dec. 31, down from $255.7 million. Full-year revenue from the unit rose 6 percent to $882.8 million.

Lazard cut discretionary bonuses by about 20 percent in 2011, the firm said in the statement. The company set aside $337 million in compensation expenses for the fourth quarter, compared with $347.7 million in the same period a year earlier.

Lazard repurchased $206 million of shares in 2011, according to the statement.

The deal, which closed last week, saw Jeffery Greenberg-led Aquiline and JCL management buy out a number of JCL equity partners including Aon Benfield, Japanese conglomerate Itochu Corporation and reinsurer Transatlantic Holdings.

Aon Benfield launched the manager in May 2008 with a $50 million investment.

The company takes its name from the tree Juniperus Bermudiana — or the Bermuda Cedar. Since the species is exceptionally resistant to both wind and salt and Bermuda Cedars are among the least damaged trees after hurricanes, the founders of the catastrophe investment firm decided it made an appropriate name for their local venture.

Mr. Greenberg is a former chairman and CEO of Marsh & McLennan Companies. His father is insurance industry legend Maurice R. [Hank] Greenberg, former chairman and CEO of AIG, and his brother Evan Greenberg is president and CEO of the Zurich- and Bermuda-based insurance company ACE Limited.

An aborted merger between Canada’s TMX and the London Stock Exchange Group plc [LSEG] and the current proposed take-over by Maple Group Acquisition Corporation illustrate the trends driving consolidation in the global exchange industry and the political and regulatory challenges posed by stock exchange mergers, say lawyers at Osler, Hoskin & Harcourt LLP.

“This latest round of stock exchange consolidation has been driven by increased competition, the globalisation of capital markets and the benefits of economies of scale in developing capital-intensive technology platforms for trading, clearing and settlement,” says the law firm in an analysis of the TMX take-over saga released today [Jan. 24]. “In particular, traditional stock exchanges have been losing significant market share in their cash equities businesses to alternative trading systems, and are looking to diversify and acquire higher margin derivatives and clearing and settlement businesses.”

TMX, the owner of Canada’s main exchanges, purchased a 16 percent holding in the BSX in December, becoming one of its largest shareholders.

Tom Kloet, the chief executive of TMX, joined the board of directors of the BSX which specialises in niche capital markets segments such as insurance-linked securities.

“This investment represents TMX Group’s commitment to looking beyond Canada for opportunities,” Mr. Kloet said in a statement.

The Maple Group — a consortium backed by some of Canada’s biggest banks and pension funds — hopes to buy TMX for $3.8-billion..

Ms Simmonds will be responsible for Ironshore Australia’s Mergers & Acquisitions [M&A] insurance programme offerings throughout the Asia Pacific region, as well as overseeing the implementation of Ironshore Australia’s business growth objectives, reporting to David Rogers, Managing Director.

Ms. Simmonds joins Ironshore from Chartis, where she led the M&A practice for Australia and New Zealand. Previously, Katherine was a Senior Lawyer in the Private Equity/M&A practice at Minter Ellison, and has also worked as a management consultant in the Australian and London markets.

“Katherine’s expertise and relationships in the M&A and private equity arena will provide our regional partners with local and innovative solutions, which are central to Ironshore’s continued expansion in this region,” said David Rogers, Managing Director of Ironshore Australia.

Ms. Simmonds noted that “this is an exciting time for Ironshore as it builds in Australia and across Asia Pacific, and I welcome the opportunity of working closely with the Ironshore global team of M&A experts.”

Ironshore Australia’s M&A suite of insurance products includes Buyer, Seller, and Tax warranties coverage. In addition to M&A product lines, Ironshore Australia provides specialty coverage for Professional Lines, Political Risk & Trade Credit, Global Property and Environmental risks.

Established in Bermuda in 2006, Ironshore provides broker-sourced specialty property and casualty insurance coverages for varying risks on a global basis through its international platforms. The Ironshore group of companies is rated A- [Excellent] by A.M.Best with a Financial Size Category of Class XIII. Ironshore’s Pembroke Syndicate 4000 operates within Lloyd’s where the market rating is A [Excellent] by A.M. Best and A+ [Strong] from both Standard & Poor’s and Fitch.

Barbican’s new all-share merger “offers no improvement” on an unsuccessful cash-and-shares bid approach it made last year, Omega said in a statement.

Omega, with a market value of about $203.4 million, is like other small insurers under pressure to consolidate amid increasingly competitive conditions and mounting regulatory capital requirements.

Guernsey-based Barbican’s move came after the failure of an initial approach it made for Omega last September and follows just a month after Bermuda reinsurer Haveford also ended talks over buying a stake.

Privately-held Barbican sent a letter which outlined an indicative merger proposal for Omega earlier this week. It said any transaction would be a merger of equals.

Barbican said any deal would take place via a share exchange, which would leave Omega shareholders owning the majority of shares in the new, combined company, with no acquisition premium paid to Barbican shareholders.

The text of a letter sent to the board of Bermuda’s Omega from Barbican and Carlson Capital — the Texan hedge fund behind the London insurer — appears below:

January 19, 2012
Board of Directors
Omega Insurance Holdings Limited
Crown House
Par-la-Ville Road
Hamilton
HM08
Bermuda

Gentlemen,

Carlson Capital L.P. [Carlson] is one of the largest shareholders of Omega Insurance Holdings Limited [Omega], and has followed the progress of the company with interest and concern. Carlson is also the majority holder of Barbican Group Holdings Limited [Barbican], an insurance group writing business predominantly through Syndicate 1955 at Lloyd’s with a stamp capacity of £180 million. Over the course of the last year, while Omega was in the process of pursuing strategic alternatives, Barbican put forth two proposals to combine the two companies. The Omega Board, to our knowledge, made but a cursory evaluation of those proposals.

Barbican was fully prepared to enter into negotiations to determine the optimal structure and terms on which to complete an agreed-upon transaction that would create value for the shareholders of both companies and stabilize the Omega business at a time of significant stress and volatility. It was extremely disappointing to learn that the strategic review process was simply a diversion to allow the company to enter into exclusive discussions with Haverford [Bermuda], Limited [HBL] and to agree to what we believe was a coercive transaction that disenfranchised shareholders. It is therefore in some ways fortuitous that the HBL offer has lapsed and further negotiations have been terminated, because it allows Omega to focus on a strategic transaction that actually creates value.

We believe that a merger between Omega and Barbican is the transaction that would create the most value for all shareholders. Barbican, with the support of its majority shareholders, is tendering a formal proposal to merge Barbican and Omega via a share exchange (the “Transaction”).
We firmly believe our proposal will create significant and compelling value for Omega shareholders. Barbican’s syndicate 1955 is ‘wholly aligned’ and will allow the combined enterprise to release surplus capital and create a more capital-efficient business going forward. The new company would have the potential to significantly cut corporate overhead and expenses, especially those surrounding compliance with Solvency II. Material savings also should be achievable from the combined company’s reinsurance program. Increased scale will also better position the combined company to compete for business in the Lloyd’s market. As Omega shareholders will represent the majority of the shares in the combined company, the majority of the future value created by the synergies, surplus capital, and increased scale will accrue to Omega shareholders.

The Transaction would be structured as ‘merger of equals’ with no acquisition premium to be paid to the Barbican shareholders. The merger consideration would be calculated based on the 31 December 2011 audited Net Tangible Book Value of each company, adjusted (i) based upon an independent actuarial review of each company’s reserves to ensure they are stated on an equivalent basis, and (ii) for any material changes through the Transaction closing date. The combined company will remain a publically traded entity, with its shares listed on the Official List of the London Stock Exchange (LSE: LSE.L – news) . As part of the Transaction, we also propose that Omega’s bye-laws be amended to bind the directors to the application of the UK Takeover Code in all material respects. The transaction would be conditioned on customary due diligence and regulatory approvals. As noted earlier, Barbican’s controlling shareholders fully support the Transaction and plan to remain long-term shareholders in the combined company.

We urge the Omega Board to immediately engage with Barbican management with the goal of completing a merger that will create significant value for all shareholders.

Barbican and Carlson, together with their advisors, will commit all the resources necessary to complete the transaction as swiftly as possible. We request that the Omega Board make a similar commitment for the future of the company and the benefit of its shareholders.

Yours truly,

Clint D. Carlson
David Reeves
Chief Investment Officer
Chief Executive
Carlson Capital, L.P.
Barbican Group Holdings

Business website The Daily Deal reports Barbican, which is based in Guernsey, the Channel Islands, and its controlling shareholder, Carlson Capital LP, wrote to Omega’s board to request talks.

The suitors said they wanted to “enable Omega shareholders to engage openly with Omega, Barbican and their respective advisers.”

The overture comes after a tortuous and ultimately fruitless offer period for Omega which began a year ago with an approach from Canopius Group Ltd.

After a flurry of proposals in the fall, including one from Barbican and Carlson Capital, Bermuda’s Haverford Ltd. — owned by locally based reinsurance entrepreneur Mark Byrne –gained Omega’s de facto backing for a partial tender.

Haverford later launched a tender for a 25 percent stake in Omega worth up to 83 pence per share but controversially allowed it to lapse in November after its target’s performance deteriorated. Mr. Byrne’s company tried unsuccessfully to open talks about a lower offer and eventually walked away on December 23.

Barbican and Carlson Capital said they believe “it is some ways fortuitous that the [Haverford] offer has lapsed and further negotiations have been terminated, because it allows Omega to focus on a strategic transaction that actually creates value.”

In their letter, Carlson CIO Clint Carlson and Barbican CEO David Reeves suggested Omega’s board had “made but a cursory evaluation” of two proposals Barbican had put to it last year.

Carlson Capital is already a significant Omega shareholder, having on December 16 raised its stake to 5.5 percent.

The executives proposed the companies’ respective price in the merger would be based on their December 31 audited net tangible book value. They want the enlarged company to remain listed and for Bermuda-based Omega to adopt the UK Takeover Code in its bye-laws. Omega, because of its overseas incorporation, isn’t caught by UK takeover regulations.

The transaction would be conditional on due diligence and regulatory approval.

Shares climbed as much as 12 percent in London this morning [Jan. 10], the highest since Gulf Keystone’s listing in 2004.

The stock rose 8.6 percent yesterday when the firm released the latest analysis of proven reserves in the fields it is developing.

The Bermuda-based company also confirmed that the Kurdistan regional government had the right to buy into the Shaikan and Akri-Bijeel blocks.

The UK’s “Daily Mail” newspaper reported that speculation the company will be taken over had been revived after Gulf Keystone last month denied it was in talks with Exxon Mobil Corp.

“Gulf Keystone will sell up, that’s the consensus,” said Alex Ogbechie, an oil analyst at Fox-Davies Capital Ltd. in London. “It’s just a matter of time. The agreement on provisions of the contracts makes investors a bit more comfortable.”

Completing the first phase of its integration with HIM,  Kane has said the former HSBC business unit heads and their teams have been retained to run and develop the Bermuda operations along with those in Cayman and the US.

The firm says the HSBC deal has made Kane the fourth-largest captive insurance manager globally — and the largest that is independent of a global broking business.

Kane recently received another injection of cash from its London private equity backer CBPE to open a offices in New York and has promoted former Aon Global Insurance Management head Clive James to chief operating officer.

In addition, Kane has employed Simon Hinshelwood, an experienced global financial services executive, to take over as group CEO from Stephen May, who will be leaving Kane.

Bermuda reinsurer Old Lyme has been in runoff since 2008.

Old Lyme loss reserves of approximately $23 million were transferred via novation agreements into a Bermuda reinsurance subsidiary of Sirius Group.

The transaction closed on December 30, 2011 and was led by White Mountains Solutions — the specialist runoff acquisition team of Sirius Group.

Old Lyme is the seventh runoff acquisition White Mountains Solutions has completed.

“We are pleased by the successful conclusion of the Old Lyme transaction,” commented Neal Wasserman, president of White Mountains Solutions. “This was a somewhat unusual transaction structure for the runoff sector – and represents an example of our flexibility in working with clients to find creative solutions for bringing closure to their legacy liabilities.”

Sirius Group is a wholly owned subsidiary of White Mountains Insurance Group, Ltd. White Mountains Insurance Group, Ltd. is a Bermuda-domiciled financial services holding company traded on the New York Stock Exchange and the Bermuda Stock Exchange.

The transaction, announced on July 20, 2011, provided for ConvergEx to be acquired by funds advised by CVC.

ConvergEx said the US Securities & Exchange Commission and Department of Justice are probing “certain non-electronic trade execution practices” conducted through its Bermuda subsidiary, ConvergEx Global Markets.

The unit is projected to generate approximately 7% of the company’s total revenues in 2011.

“We want to thank CVC for their interest in partnering with ConvergEx. While we regret that a transaction could not be consummated at this time, the Company’s obligations to focus on the regulatory questions raised by the inquiries made it difficult to execute the transaction at this time,” said Joseph M. Velli, Chairman and Chief Executive Officer of ConvergEx.

Mr. Velli said, “Since becoming aware of the matters under review, we have taken strong actions to remedy any lapses that have occurred. We are taking additional steps to ensure that we are in full compliance with our own policies and procedures as well as all other regulatory requirements.”

The Audit and Risk Committee of the company’s board of directors has retained outside counsel to conduct a thorough review of the facts.
The Committee stated, “We take all regulatory questions seriously, and we have zero tolerance for misconduct by any employees of the Company. The credibility of the Company is paramount and we look forward to reaching an appropriate resolution.”

Mr. Velli concluded, “We are focused on running our business and continuing to provide our clients with the high quality services on which they rely. This is a highly diversified company, and we are on track to have a strong year. Our balance sheet is the strongest that it has ever been. We have discussed this development with our major shareholders, who remain committed to the Company’s growth strategy, organically and through acquisitions.”

ConvergEx Group, based in New York, is a leading technology company providing mission-critical proprietary software products and technology-enabled services to asset managers and financial intermediaries globally.

Fitch said those insurers that are struggling to repair balance sheets weakened by Asia-Pacific catastrophes in 2011, including the earthquake and tsunami in Japan and flooding in Thailand, are viewed as primary targets, as are smaller franchises.

“The likelihood of continued earnings pressure in 2012, driven by sustained low yields from investment portfolios across the non-life insurance sector, will make it harder for many insurers to convince shareholders to inject fresh capital when faced with the prospect of lower returns,” said Fitch.

Hardy announced earlier this month that it had launched a strategic review in the wake of catastrophe losses. While the firm said it had sufficient liquidity and capital to absorb the losses, it added that it would consider looking for a buyer. Beazley said Wednesday that it is interested in takeover talks after a previous approach failed last year.

“We believe insurers may also be more willing to complete deals as they get a better view of the capital requirements that will be implemented under the Solvency II regime,” said Fitch. “The capital requirements should become clearer next year, allowing potential buyers to more accurately assess the true value of targets.”

For the smallest insurers with only one or two business lines, Solvency II is likely to require higher capital levels to compensate for a relative lack of diversity. These firms could, therefore, also become takeover targets in 2012 as they would be able to operate with lower capital levels as part of a bigger group.

“Overall, Fitch’s rating outlook for the UK non-life insurance sector in 2012 is stable,” said a spokesman. “We expect the sector’s capitalisation, underwriting and operating trends to support current ratings over the next year or two, even as fundamental indicators remain weak in 2012.”

Beazley said in a statement this does not represent a firm intention to make an offer and there can be no certainty that an offer will be made.

Hardy had announced earlier this month that it was starting a strategic review of its operations after receiving preliminary expressions of interest in its business and in the light of the incidence and size of catastrophe events in 2011.

Investment bank Espirito Santo is not surprised given Beazley’s failed attempt to acquire Hardy 12 months ago after Hardy management refused a 350 pence per share bid.

“With Hardy having recently effectively been put up for sale after a catalogue of damaging international catastrophe losses which have pressured the capital base, it seems logical that Beazley would be interested in another approach,” it said.

Hardy Underwriting Bermuda Limited, listed on the London Stock Exchange, is the ultimate holding company for the Hardy group of companies.

Hardy’s business has been built around its management of and participation on Lloyd’s syndicate 382, which underwrites a range of insurance and reinsurance classes on a world wide basis.

Beazley plc, is the parent company of specialist insurance businesses with operations in Europe, the US, Asia and Australia. Beazley manages five Lloyd’s syndicates and, in 2010, underwrote gross premiums worldwide of $1,741.6 million. All Lloyd’s syndicates are rated A by A.M. Best.

The Transatlantic saga sits near the top of a list dominated by the Japanese earthquake and tsunami and a string of other other global disasters which were the leading concerns of catastrophe/property reinsurers this year.

“Ending a five-month, multiparty bidding war—with Warren Buffett as one of the belligerents—investment holding company Alleghany Corp. recently reached a deal whereby reinsurer Transatlantic would become its independent subsidiary in a $3.4 billion deal,” said National Underwriter.

“The battle for Transatlantic began on June 12 when the company and Swiss-based Allied World Assurance Co. Holdings announced a $3.2 billion merger deal that executives said would create a global specialty insurer and reinsurer operating in 18 countries on six continents. But one month later, Bermuda-based Validus Holdings Ltd., led by CEO Edward J. Noonan [pictured], made an unsolicited, competing $3.5 billion offer of its own to acquire Transatlantic. The companies sparred throughout July, with Transatlantic filing a lawsuit in Delaware alleging that Validus had made false and misleading statements to Transatlantic’s stockholders through tender-offer materials.

“In August, yet another player entered the game as Berkshire Hathaway’s National Indemnity Co. put in a competing bid. Validus then filed suit against Transatlantic and the board, arguing that the board had not given sufficient reason for refusing to consider Validus’ offer.”

The National Underwriter report concluded: “Days before a scheduled September 20 vote on their planned merger, Transatlantic and Allied World announced they had ended their attempted deal. Transatlantic was left to consider bids from Validus, National Indemnity and an ‘undisclosed third party’. Ultimately, in November, Alleghany and Transatlantic announced their transaction, which is expected to be finalized during 2012’s first quarter.”

She will replace current chairman and CEO Michael Watson, who becomes executive chairman.

Canopius — which does business in Bermuda but which launched a major Swiss operation last year – was recently embroiled in a bidding war with locally based entrepreneur Mark Byrne for Omega Insurance Holdings Ltd.

The former CEO of Scor SE’s Swiss unit, Ms Beale was most recently the global chief underwriting officer at Zurich Financial Services AG.

Jim Giordano will continue in his role as chief underwriting officer, Canopius said.

Ms Beale will assume ultimate responsibility for all of Canopius’s business in the UK and overseas.

Mr. Watson is leaving the CEO role following Canopius’s October 20 withdrawal from the bidding war for Omega, which endorsed a rival offer from Bermuda insurance executive Mr. Byrne’s Hamilton-based Haverford Ltd. The Omega-Haverford deal now appears to be in limbo.

“For the past eight years, Jim Giordano and I have overseen the group’s operations,” Watson said in the statement. “We believe the scale and complexity of Canopius now require that we add an additional member to our most senior ranks to oversee the next stage of our development.”

Earlier this month Haverford, led by Bermuda-based insurance entrepreneur Mark Byrne [pictured], said it wanted to lower its price for the holding in Omega.

This followed a downbeat trading update from Omega in October which saw the insurer reveal $9 million in fresh catastrophe-related losses.

Haverford had originally wanted to buy into Omega through a so-called Dutch auction, in which shareholders were invited to submit their minimum acceptable sale price within a range between 70 pence and 83p a share.

Omega investors offered to sell 162.2m shares, more than double the 60.2m Haverford was seeking, at the maximum price of 83p, valuing the stake at about £50 million.

Haverford effectively walked away from the prospective deal in early December.

Omega’s Statement Appears In Full Below:

Following consultation with all of the Company’s major institutional shareholders the Omega Board wishes, inter alia, to confirm the position in respect of Haverford (Bermuda) Limited (“HBL”).

The Omega Board has been notified that following the announcement from HBL on 2 December 2011 that HBL considers the Offer to have lapsed, HBL has returned share certificates and acceptance forms to Omega Shareholders who tendered their shares.

Separately HBL has advised the Omega Board that the hearing of the Delaware Insurance Commissioner, which was scheduled for 12 December 2011, has been cancelled and that HBL considers the Implementation Agreement between Omega and HBL to have terminated.

The Omega Board reiterates that it believes the Offer, for which the Strike Price was 83p, would have become unconditional in all respects if HBL had complied with the terms of the Offer and the Implementation Agreement and honoured the valid tenders it received.

Along with many of our peers, the Group has experienced significant catastrophe losses during 2011, however our capital position continues to be more than adequate. We have increased our participation in Syndicate 958 for the 2012 year of account to 48.8% from 40.5% which when combined with the quota share reinsurance of the Syndicate brings the Group’s overall economic interest in the Syndicate to 59.0% (52.4% in 2011).

The business is focussing on the January renewals, targeting the better priced areas of business where we are seeing signs of an improving rating environment in our core books.

Alterra Europe, the surviving entity, will underwrite business from its head office in Dublin, as well as from its branch offices in London and Zurich.

W. Marston (Marty) Becker, President and Chief Executive Officer of Alterra, commented: “We are pleased to have been able to merge our Irish underwriting companies in order to operate our insurance and reinsurance businesses as a single platform.”

“We believe there are benefits for all stakeholders in this single company structure that has been enabled by the Central Bank of Ireland relaxing its restrictions on the writing of reinsurance business by direct insurance companies. The new structure of Alterra Europe provides a stronger consolidated balance sheet for our Dublin insurance and reinsurance platform, allowing for greater operational efficiencies, and simplifying the implementation of Solvency II.”

The combined entities will operate as subsidiaries of BCB under the names of BCB Paragon Trust Ltd and BCB Charter Corporate Services Ltd. The current offices of Paragon and Charter at “Trinity Hall”, 43 Cedar Avenue in Hamilton will become the centre for Private Wealth services for BCB.

Michael Collier, Chairman of BCB, commented “We are very pleased with the completion of the amalgamation process and are looking forward to the future with our new wealth management centre at Trinity Hall. We are excited about expanding our Private Wealth business and this amalgamation solidifies our strategic positioning.”

Luciano Aicardi, Managing Director of Paragon and Charter, stated that, “Paragon and Charter are excited to be working with the entire BCB team. This is a great platform for all of our products and services and we will now be able to offer our clients a complete turn-key service.”

A statement released by BCB said, “As stated in the 2010 annual report, BCB’s goal is to become the recognized leader for customer service in Bermuda. The amalgamation further strengthens BCB’s platform and ability to deliver tailored financial solutions to the bank’s global clients. Paragon and Charter’s stellar reputations and established success within their individual markets will help to boost the bank’s current range of services and strengthen BCB’s position as Bermuda’s full-service, boutique premier wealth management financial institution. “

Digicel CEO Wayne Caines said, “Digicel is extremely pleased to have acquired Transact and we look forward to continuing the provision of reliable internet service to Transact customers. ”

“It is our aim to apply our existing business principles to the ISP market and, as such, have many enhancements planned. Our first efforts will be to build further redundancy and capacity systems that will protect service reliability for internet customers.”

“After these technical milestones are completed, Digicel will continue its commitment to all residential and corporate customers to provide the best value, best service, and the best network as a cellular provider and now also as an internet service provider.”

Bill Dickinson, CEO of Transact, also commented, “Over the past 20 years, Transact has had the pleasure of providing our customers with quality communication services in various forms. Transact wishes to thank all of our customers for their loyalty and patronage.”

“I am pleased to know that our valued customers will be looked after by Digicel Bermuda, a company with a great track record of bringing better value, quality innovation and excellent service to the telecommunications industry. I feel confident that our customers will be in good hands and trust our customers will feel the same.”

Mr. Caines added, “As part of our acquisition of Transact, we are planning to make available long distance voice services to all of Bermuda, which includes not only Digicel customers, but also any other cellular customer or any fixed line customer. ”

“We are excited about this planned service as we are eager to bring better long distance value to the people of Bermuda. The overall impact of this acquisition to the people of Bermuda is a healthy increase in competition, which translates to better value and better service for all. This has long been our goal in the cellular market and we look forward to doing the same in the ISP and long distance markets.”

In the short term, there will be no change to the service provided by Transact and this service will continue to be provided under the Transact name. Transact customer service will still be available by calling 272-4357 and the iStore, located on the upper level of the Washington Mall, will continue to be available for sales, bill payments and service queries. Customer bills will be delivered as usual and bills can still be paid using the same methods as before.