Omega hits back at Haverford’s strategy comments

Omega has hit back at comments by Bermudan investment firm Haverford (HBL) that the Lloyd’s insurer needs a strategy change.

HBL is in the process of buying 25% of Omega, but the deal hit trouble after Omega’s performance deteriorated. The two firms are currently fighting over whether HBL’s initial tender offer of up to 83p a should go ahead. HBL argues the offer has lapsed, while Omega insists that it could still be declared unconditional and go ahead if all conditions in the offer are met 21 days after the 30 December closing date.

In its third-quarter interim management statement, Omega revealed  additional losses of $25m (£16m) – $6m of deterioration in previously announced catastrophe claims, $10m in new catastrophe losses and $9m in attritional losses. HBL asked for additional information about the performance.

In an statement this morning announcing its intention not to renew its 83p offer, HBL said that the strategy for Omega described in the offer document “may require significant amendment if the long-term financial stability and improved performance of the Omega Group is to be secured”.

However, Omega countered: “The Omega board does not believe there is any reason why the strategy for Omega to which HBL refer would need to be significantly amended either in light of the Omega interim management statement released on 18 November or in respect of any information provided to HBL.”

On the status of the offer, HBL contends that the minimum tender condition of the offer had yet to be met at the closing date. However, Omega said:  “The Omega board is not aware of any reason why the outstanding conditions should not be met within that [21 day post-closure] timeframe (as envisaged in the timetable in the offer document) and sees no grounds for a change to the strike price of 83p which has been arrived at under the tender mechanism which HBL itself devised and was set out in HBL’s offer document.”

Haverford has proposed a new fixed offer of 74p a share, but has yet to submit a formal offer document.