SHARES in Lloyd’s of London insurer Hardy Underwriting soared yesterday after it said it had accepted a 280p per share cash takeover offer from US rival CNA Financial, valuing it at about £143m.
“The board believes that CNA’s offer represents the most attractive outcome for our shareholders and will enhance Hardy’s business,” Hardy chairman David Mann said in a statement.
The insurer’s share price increased by more than a third after the sale was announced,
Hardy effectively put itself up for sale in December after being hit hard by a string of natural disasters last year, and had received offers from rivals including Ireland-based Beazley.
But Beazley said in mid-December it had dropped its possible offer of up to 350p a share for rival Hardy, saying that Hardy had sought a much higher price.
Smaller Lloyd’s of London insurers have been seen as ripe for consolidation because persistently weak insurance prices have weighed on their shares, with forthcoming strict regulatory capital requirements adding further financial pressure.
Chaucer accepted a £292m offer from Hanover Insurance last year, while Brit Insurance succumbed in 2010 to a bid from buyout firms Apollo and CVC.
“While Hardy’s recent results reflect the extraordinary level of natural catastrophe losses across the global insurance industry, the Hardy franchise is built on a strong foundation and has a bright future,” said CNA chairman and chief executive Thomas Motamed.
City A.M. Reporter