At least five suitors gunning for Hardy

At least five companies are thought to be interested in buying Lloyd’s insurer Hardy, which put itself up for sale last year.

News reports suggest that Japanese insurer Mitsui Sumitomo, which has a significant operation at Lloyd’s, and Bermuda-based reinsurer Montpelier Re have expressed an interest in Hardy.

They join Lloyd’s insurer Beazley, which has confirmed its interest, and US insurer Tower Group and Bahraini reinsurer Arig, which are both capital suppliers to Hardy and have been on the list of possible suitors since Hardy first revealed its sale plans.

“That there is this level of interest in Hardy does not surprise us,” Shore Capital analyst Eamonn Flanagan said in a research note this morning.

Attractive features include the fact that Hardy’s shares are trading at a 5% discount to Shore Capital’s forecast for Hardy’s 2012 net tangible asset value, coupled with the Lloyd’s insurer’s conservative accounting, cautious reserving and strong positioning in key lines of business.

“For Beazley, Hardy offers capital diversification benefits, especially under Solvency II, while for the others the key attractions also include a presence in the Lloyd’s market,” Flanagan said.

He also noted that Montpelier Re chairman Tony Taylor is a non-executive director of Hardy.