Challenges to CNA’s Hardy bid ‘highly unlikely’

A counter-bid to US insurer CNA’s £143m offer for Lloyd’s insurer Hardy is “highly unlikely” because of the premium CNA is paying, says Shore Capital analyst Eamonn Flanagan.

Another factor cementing the deal is Hardy management’s recommendation of the offer, Flanagan wrote in a research note. “As a result, we believe shareholders should accept the offer and move on,” he said.

CNA has agreed to buy Hardy for 280p a share, 1.5 times the company’s 2011 net tangible assets of 183.5p. Flanagan described it as  “a figure comfortably in excess of our expectations”.

Flanagan also suggested the move was positive for Beazley, which was in the running to buy Hardy. “We believe that Beazley’s shareholders can breathe easier with the group now unlikely to be dragged into a drawn-out bidding process which we could not envisage it winning,” he said.

Hardy’s stock price jumped 35% in trading yesterday, closing at 275.07p compared with 204.25p at the previous day’s close.