Hardy again in sights of rival Beazley

BRITISH insurer Beazley is hatching a new plan to take over Hardy Underwriting, a year after abandoning an initial move on its smaller rival.

The potential bid would comes at a time of consolidation in the Lloyd’s of London insurance market.

Beazley revealed it was interested in talks following Hardy’s announcement this month of a strategic review triggered by big hits from payouts in global crisis zones – including an earthquake and tsunami in Japan and floods in Thailand.

In December last year, Beazley ditched a £180m offer for Hardy at up to 350p per share.

It pulled away after Hardy indicated it would have to up the offer, saying it was “opportunistic” by taking advantage of market conditions.

Beazley said in a statement to the stock market yesterday it wanted to enter “exploratory discussions” with Hardy about a deal.

It added that this did not constitute a firm intention to make an offer.

Hardy did not comment but has previously said that several unnamed potential suitors have come forward.

The company has also said that finding a partner could be a way to go forward rather than an outright sale of the business, whose shares have dropped in the second half of 2011.

Shares in Hardy rocketed 10.8 per cent yesterday.

Lloyd’s of London insurers are seen as ripe for consolidation because persistently weak insurance prices and a rash of disasters have weighed on their shares, while their small size makes them vulnerable as stricter capital requirements come into force.

Chaucer accepted a £292m offer from Hanover Insurance, while Brit Insurance succumbed last year to a bid from buyout firms Apollo and CVC.

Omega Insurance is also at the centre of a bid battle.

ADVISERS: EVERCORE

ANGUS WINTHER

SENIOR MANAGING DIRECTOR

Beazley’s lead adviser Angus Winther has over 20 years of corporate finance experience.

Winther is based in London and specialises in advice to clients who operate in the insurance and diversified financial sectors, including work on a number of significant transactions in these sectors over the past few years, such as advising Brit Insurance on the £880m offer from Apollo and CVC, helping Kiln with its £442m offer from Tokio Marine, and advising Equitable Life on their restructuring which included the transfer of £4.6bn of non-profit annuities to Canada Life and £1.7bn of with-profit annuities to Prudential. Winther was one of the co-founders of Lexicon, the corporate finance advisory business that was acquired by Evercore in June of this year. Prior to founding Lexicon in July 2000, He worked at Donaldson, Lufkin & Jenrette, where he also specialised in mergers and acquisitions in the financial institutions sector. He was previously a partner in The Phoenix Partnership, a corporate advisory and private equity business which was acquired by DLJ in 1997.