US insurer CNA to buy Hardy for £143m

US insurance group CNA Financial has agreed to buy loss-making Lloyd’s insurer Hardy for £143m.

CNA will pay Hardy shareholders 280p per share in cash for the insurer. The closing price for Hardy’s stock yesterday was 204.25p, but it has since surged to 277p.

Hardy’s net tangible asset value per share for 2011 was 183.5p following heavy catastrophe losses, which pushed the firm into a £41.2m loss before tax during the year. Its 2010 net tangible assets were 270p, which still means CNA will pay a premium to buy the firm.

“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,” CNA chief executive Thomas Motamed said in a statement. “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.”

Fellow Lloyd’s insurer Beazley, which was in discussions to buy Hardy, issued a statement saying that it is no longer in talks and has no current intent to buy the company.