Haverford May Drop Its Omega Bid
Bermuda-based reinsurer Haverford says it may drop its bid to acquire 25 percent of London-listed rival Omega, citing a “very significant and unexpected deterioration in Omega’s financial position and prospects”.
Domiciled in Bermuda, Omega last month reported a 16 percent drop in nine-month gross written premiums and raised its estimate for the cost of 2011 catastrophes by $6 million.
Haverford said today [Dec.1] it may not extend its offer to buy up to 60.2 million shares and that, contrary to guidance from Omega this week, its offer may therefore lapse.
“Haverford Bermuda Ltd. does not agree with Omega’s announcement that if the minimum levels of tenders were received by 1.00 pm yesterday, the offer may not lapse,” Haverford said.
Headed by Bermuda-based insurance tycoon Mark Byrne, Haverford had hoped to buy into Omega at between 70 and 83 pence per share via a so-called Dutch auction, in which each shareholder submits the minimum price they will accept.
Haverford said it had sought further details from Omega after its November 18 results, as it tried to “understand the reasons for, and consequences of, the very significant and unexpected deterioration in Omega’s financial position and prospects”.
It said a further announcement would be made before Friday.
Haverford’s Full Statement Appears Below:
HBL announces that it may decide not to extend the partial cash offer by HBL to acquire up to 60,240,964 of the common shares of Omega (the “Offer”) and accordingly the offer may lapse. HBL does not agree with Omega’s recent announcement that if the minimum levels of tenders were received by 1.00pm yesterday, the Offer may not lapse.
Following the interim management statement of third quarter results by Omega, HBL requested further information from Omega, so HBL could understand the reasons for and consequences of the very significant and unexpected deterioration in Omega’s financial position and prospects, in particular in comparison to the position indicated by HBL’s previous due diligence. HBL is continuing to review this information and is considering its position.
A further announcement will be made by HBL before 8.00am (London time) on Friday 2 December. Tenders have been received for substantially more than the maximum number of shares that may be acquired under the Offer.
HBL confirms it indicated to the Omega Board on 29 November that, subject to the agreement of Omega, it would be willing to make a new offer for up to 60,240,964 shares, at a fixed price of 74p per share, with an initial closing date as soon as practicable after agreement with Omega has been reached, but otherwise on the same terms as the Offer. HBL stands ready to continue discussions and negotiations with Omega in connection with this possible new offer.
