Omega: new Barbican approach ‘no improvement’

Omega has rebuffed a fresh approach from fellow Lloyd’s insurer Barbican, saying it offers “no improvement on the earlier proposal”.

Omega also said that it had rejected a recent proposal by private equity firm Carlson Capital to appoint two nominees to Omega’s board because it presented a conflict of interest.

Carlson Capital is Barbican’s main backer and also owns 4.3% of Omega.

Barbican revealed this morning that it was seeking to make a new offer for Omega following the collapse of deal talks with Bermudian investment firm Haverford at the end of last year.

Barbican lost out to Haverford in last year’s bidding war, after Omega’s board deemed Barbican’s proposal to be not in shareholders’ interests. However, the failure of the Haverford deal has prompted Barbican to take a second shot.

Barbican’s original offer envisaged a stock for stock merger, after which it would buy 25% of Omega’s stock from shareholders for 84p a share. The new offer lacks the cash portion of the deal, and proposes a “merger of equals”.

Under the new Barbican proposal, there would be no acquisition premium payable to Barbican shareholders, and the amount paid would be based on the net tangible asset value of each company as at 31 December 2011.