New Merger Proposal For Omega
Bermuda’s Omega Insurance Holdings Ltd. was today [Jan. 20], thrust back into play as previously thwarted suitor Barbican Group Holdings Ltd. said it had made a “merger of equals” proposal to its Lloyd’s of London peer.
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.
