Omega reveals ‘issues’ with suitors’ bids

Lloyd’s insurer Omega says it may not be able to fulfil requirements of one of its suitors’ offers and that shareholders have “issues” with another.

The company is currently under offer from fellow Lloyd’s insurers Canopius and Barbican, as well as Bermudan investment firm Haverford (Bermuda) Limited (HBL).

Canopius has offered 83p a share for the entire company, Haverford has offered the same amount for 25% of the firm, while Barbican has proposed an all share merger, after which it will plans to back 25% of Omega’s shares for 84p a share.

In an update released today, Omega said that as a pre-condition to making an offer, Canopius’s proposal requires certain Omega shareholders to reinvest a “substantial” portion of their cash proceeds in the enlarged Canopius group.

“That requirement is outside the control of the Omega Board and may or may not be met,” Omega said in a statement.

In addition, Omega said that its board has discussed with HBL and its advisers “the issues that have been raised by certain of Omega’s shareholders regarding the terms of the tender offer” made by HBL.

Despite this, HBL’s offer is the furthest advanced of the three. It has been recommended by Omega’s board as “being in the best interests of shareholders” and received approval from the Financial Services Authority at the end of last week.

Omega confirmed it is continuing discussions with all three suitors. “The board will further engage with Omega’s shareholders in order to reach finality as soon as possible,” the statement said.

In a separate statement, Canopius said it had completed its due diligence on Omega on September 30 and submitted an all-cash offer to the board on October 13. It also confirmed the reinvestment condition for certain shareholders in its offer.

“Discussions with the Omega board and those shareholders are continuing and Canopius anticipates announcing the outcome shortly,” the Canopius statement said.