Beazley bid for Hardy rejected

Hardy has turned down a 300p per share cash offer made by rival Lloyd's insurer Beazley.

The offer was made on 6 October 2010 for the entire issued and to be issued share capital of Hardy, valuing the business at around £158.3m, funded from Beazley's existing internal resources.

However, five days later, Beazley received a letter from the board of Hardy, dated 8 October 2010, rejecting the proposal.

Beazley said it is "surprised and disappointed by the board of Hardy's outright rejection of its proposal". In its response, Hardy said Beazley's bid substantially undervalued the company.

Beazley said it believes that the two groups are "highly compatible" and that both have well-regarded underwriting teams, renowned track records of profitability and a shared objective to develop a diverse speciality insurance franchise.

In a statement, Beazley said: "Beazley remains committed to establishing a constructive dialogue with Hardy's board and shareholders with the intention of agreeing a recommended transaction. To this end, Beazley is announcing the proposal as a means of advancing that process.

"There is no certainty that Beazley will take any further action or that any offer will be forthcoming, and Beazley expressly reserves the right to withdraw its interest in making an offer or to make an offer on less favourable terms than those set out in this announcement."

Beazley's proposal represents:

• A 36% premium to the closing Hardy share price on 5 October 2010, being the last day prior to the submission of the Proposal to the board of Hardy;
• A 34% premium to the volume-weighted average Hardy share price over the three months prior to the submission of the Proposal to the board of Hardy; and
• A multiple of over 1.2 times Hardy's 30 June 2010 fully diluted net tangible assets per share.