Lloyd's insurer abandons sale.
Lloyd’s insurer Omega became the latest victim of the tough economic climate this week, after announcing that it had abandoned sales talks because it had not received an adequate offer.
It announced to the Stock Exchange last Wednesday that it had been unable to reach an agreement with any of its potential buyers – believed to have numbered up to seven.
A spokesman linked the failure to reach a deal to the current difficulties in raising capital as a consequence of the credit crunch. High profile deals such as Candover’s bid to take up to an £800m stake in Towergate have also fallen foul of the economy in the past few weeks. The spokesman added that while there were no talks at the moment, Omega would remain open to an offer of the right value. Its share price was 143p on Monday.
Omega chairman Walter Fiederowicz said in a statement: “We went into bid talks with an open mind, fully accepting that if a party would pay the right price for our franchise today then we would act accordingly in the best interests of shareholders.
“Our people and our business have come through quite extensive due diligence in the best light, but we do not believe that bidders’ valuations adequately reflect the value of Omega today and the value of what we are building in Bermuda and in the US. The board has therefore decided to terminate these discussions at this point in time.”
The statement added the was trading in line with expectations.
Omega Insurance writes mainly short-tail property insurance and reinsurance business, with a focus on insuring small to medium-sized companies and reinsuring smaller insurance companies.
Omega Underwriting manages Syndicate 958, which in 2006 wrote £250m in gross premiums, making pre-tax profits of £37m with a combined ratio of 85%.