Omega Insists Haverford Deal Proceed
London insurer Omega insisted this afternoon [Dec. 2] rival Haverford go ahead with a $78.4 million deal to buy 25 percent of its shares after its Bermuda suitor said the agreement was no longer valid and it wanted a cheaper price.
Omega Insurance Holdings Ltd. “sees no reason why the offer would not proceed” said in a statement.
Haverford, led by Bermuda insurance tycoon Mark Byrne, had earlier said it hoped to pay just 74 pence per share for the Omega stake, less than the 83 pence demanded by shareholders last month in a so-called Dutch auction.
It said its original offer had lapsed because legal conditions, including regulatory approval from Lloyd’s of London and the US state of Delaware, had not been met by the closing date of November 30, and raised concerns about a “very significant and unexpected deterioration” in Omega’s financial position.
Omega revealed on November 18 that it had incurred another $9 million of catastrophe-related claims in the three months to September 30, and that its previous estimate of disaster losses in the first half had risen by $6 million.
“It’s quite disappointing for shareholders,” Sarah Lewandowski, an analyst at brokerage Peel Hunt, told the Reuter news service.
“The general performance of Omega has continued to deteriorate — [net tangible assets] will have dropped and Haverford are trying to get that reflected in their bid price.”
Under the original offer, Haverford had asked Omega investors to submit shares for sale at the lowest price they could accept within a range of 70 pence and 83 pence.
The Dutch auction drew offers to sell 162.2 million shares, more than double the 60.2 million shares required, at the maximum price of 83 pence, Haverford said on Friday.
Bermuda-domiciled Omega, one of the smallest listed insurers operating in the Lloyd’s of London market, has been seen as a takeover target since last year.
Haverford aims to install Flagstone Reinsurance Holdings co-founder Mr. Byrne as Omega’s executive chairman if its offer eventually succeeds.
