Chaucer's biggest shareholder dubs bid inadequate

Chaucer's biggest single shareholder has said it has no intention of accepting the offer from US insurance group Hanover.

Private equity firm Pamplona has dubbed the £313m offer for Chaucer "inadequate", Bloomberg reports.

This morning, Chaucer recommended Hanover's offer to shareholders, which comprised a base amount of 53.3p a share, plus a final dividend of 2.7p a share. Chaucer said the offer represented 1.09 times its net tangible assets at the end of 2010.

Pamplona owns a 9.9% direct equity stake in Chaucer, and an indirect stake, through other financial instruments, of around 6%.

However, the deal could still go through without Pamplona's support - the acceptance threshold has been set at 75%, and Hanover reserves the right to lower this to any amount over 50%, along with the approval of the takeover panel.

Chaucer said it had received commitments to accept the bid from 23.59% of Chaucer's shareholders, among them some of the largest shareholders, such as BlackRock, which owns a 9.8% stake, and Aberforth Partners, which holds 4.9%.

Speaking to Insurance Times earlier today, Chaucer chief executive Bob Stuchbery expressed confidence that the deal would go through.