Lloyd's firm approached in takeover move

Omega Insurance, parent of Lloyd’s insurer Omega Underwriting, has received interest from up to seven insurers looking to acquire the Lloyd’s firm.

The AIM-listed company confirmed to the Stock Exchange that it had received a number of approaches following a report by insurancetimes.co.uk.

Lloyd’s rival Hiscox, four unnamed Bermuda insurers and two unnamed US-based insurers were touted as possible candidates.

Trading at 151p last Thursday morning, Omega shares leapt to 174p before settling back to 172p as Insurance Times went to press – a gain of over 14% on the week.

The company confirmed that parties had shown interest in taking over the entire Omega Insurance operation, comprising US, European and Bermuda units, as well as Omega Underwriting.

It has handed marketing documents to interested companies, but said that these were not information memoranda.

The distribution of information memoranda would indicate that a formal offer had been made.

A spokesman said: “The board has to act in shareholders’ interests in responding to interest from other companies,” adding that all discussions were at an early stage.

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%.