Hardy rejects second Beazley advance

Hardy Underwriting has rejected a revised offer from fellow Lloyd’s insurer Beazley. Beazley had proposed an offer of £3.30 a share in cash, up from its initial offer of £3 a share, which was made on 6 October.

However Beazley said it was informed on 12 November that Hardy would not recommend the new £3.30 a share offer “and would not event be prepared to meet with Beazley to discuss it”.

Beazley argues that its offer would have “fully valued” Hardy, as it represents a 50% premium to Hardy’s closing price on 5 October, a 47% volume-weighted average Hardy share price over the three months before the submission of the initial proposal and a multiple of 1.36 times Hardy’s 30 June 2010 net tangible assets a share.

It added that the new proposal would have increased the goodwill value ascribed to Hardy by 50% compared with the initial proposal.

The language of Beazley’s statement on the offer suggests that a revised offer is unlikely.

“Beazley remains disappointed by the board of Hardy's continued refusal to enter into a dialogue with Beazley regarding its revised proposal or to provide access to due diligence information it requires to progress it,” the statement read. “Beazley believes that the board's resistance is not in the interests of Hardy's shareholders, and urges shareholders to encourage the board of Hardy to adopt a more constructive approach. In the absence of any such encouragement, Beazley will withdraw its revised proposal.”