GUY Hands, founder of private equity firm Terra Firma, is in takeover talks with Lloyd’s insurer Chaucer Holdings, sources close to the situation confirmed to City A.M. yesterday.
Hands, who was forced to surrender control of record company EMI to its creditor Citigroup last week due to its debt mountain, has approached Chaucer with a bid to take it private.
In a statement, Chaucer said it “notes the recent share price movement and confirms that it has recently received a number of approaches regarding a possible offer for the company” but said there was no certainty an offer would be made.
London-listed Chaucer, which has a market capitalisation of about £300m, has been effectively up for sale for the past two years after suffering losses in the financial crisis.
A combination of subprime-related reinsurance losses, exposure to Bernard Madoff’s Ponzi fraud and a $65m (£40m) loss from US hurricanes caused it to lose an estimated £72m in the year to December 2008.
It resorted to a £75m rescue rights issue to recapitalise in January 2009 and returned to profit that year, but is still rebuilding under the guidance of chief executive Bob Stuchbery.
Hands’ bid is the latest in a string of insurance deals, such as Beazley’s bid to acquire Hardy Underwriting last year and Brit Insurance, which is being bought by private equity consortium Achilles.