Lloyd’s insurer to lose London listing after deal closure

Chaucer chief executive Bob Stuchbery is confident that the planned merger with US property/casualty insurer Hanover Insurance Group will go through.

“When you have got a transaction that has been unanimously supported by the board, recommended by the board and supported by a reasonably large percentage of our shareholders, that gives a strong signal that it is a deal likely to get done,” Stuchbery told Insurance Times.

Chaucer announced this morning that it was recommending an all-cash offer from Hanover of 53.3p a share, plus a final dividend of 2.7p to shareholders. The offer values Chaucer at £313m ($510m).

The insurer has received irrevocable undertakings of support for the deal from 23.59% of shareholders.

However, Russian private equity firm Pamplona, Chaucer’s largest individual shareholders with a 9.9% direct equity stake, was not on the list of firms that had submitted irrevocable undertakings.

Stuchbery said Chaucer has been in contact with Pamplona but declined to comment on their view of the offer. “We would hope they would be supportive of this alongside the other 23-24% shareholders that have given their irrevocables,” he said.

If the Hanover deal is successful, Chaucer will retain its brand, staff, senior management, underwriters and place of business. However, it will delist from the London Stock Exchange on the deal’s completion. According to the timetable released this morning, the companies expect to complete the deal in early July.

Stuchbery will remain at the helm of Chaucer. However, he will join Hanover’s executive board and oversee the company from there.

According to Stuchbery, there is no operational overlap between the two firms, allowing Chaucer to continue with its three-year Foundation, Flex, Flagship strategy. The acquisition expands Hanover’s speciality lines portfolio and its geographic spread, and in turn gives Chaucer access to Hanover’s US distribution for its products.

“The deal is not about banging companies together and saving expenses. It is about profitable growth in line with the cycle and our strategy,” Stuchbery said.