Omega Hints At New Takeover Offer
Bermuda-domiciled re/insurer Omega has suggested that it may have received a takeover offer in a statement issued yesterday [Mar. 27].
“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.
