Byrne offers cash for 25% Omega stake
The long-running saga into the ownership structure of Lloyd's (re)insurer Omega may have finally been resolved following a cash offer from Flagstone Re founder Mark Byrne to acquire a 25 percent stake in the business today (12 September).
Byrne's vehicle Haverford (Bermuda) Ltd is offering to pay up to 83 pence a share - equivalent to book value - for the (re)insurer, which is listed on the London Stock Exchange.
If successful, Byrne will replace former Benfield Group chairman John Coldman as executive chairman of the firm.
In an announcement, Omega said the strategy will be to simplify the business and to "to return the underwriting to overall profitability".
The Insurance Insider - which first reported in June that Byrne was looking at Omega - revealed recently that the company had effectively closed its Bermudian underwriting operations to concentrate on its London and US platforms.
In a variant of a dutch auction, Omega shareholders will be invited to tender their shares at up to 83p per share. The strike price will be the lowest price that enables Haverford to acquire 60,240,964 shares - the equivalent of 25 percent of outstanding Omega equity.
Neil Woodford's Invesco Perpetual - Omega's largest shareholder with a near 30 percent stake - will not tender its shares unless it is required to do so to ensure Haverford's bid succeeds.
The offer is the culmination of a year-long search for new ownership following shareholder dissatisfaction with the group, which led to an overhaul of the management and board of directors in 2010.
The group effectively doubled in size with a £130mn capital raise at 140p a share in late 2008, following the near-collapse of AIG. But the markets failed to harden as anticipated and Omega's share price has tumbled on the back of heavy 2010-11 catastrophe losses.
Other parties involved with recent discussions with Omega include the private equity-backed Lloyd's (re)insurers Barbican and Canopius.
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