Omega backs Byrne in line with Invesco

OMEGA, the Lloyd’s insurer courted for a takeover for almost a year, will push ahead with plans to sell a 25 per cent stake to Haverford after its biggest investor turned down rival bidder Canopius yesterday.

Canopius walked away from Omega after ten months of talks that ultimately rested on whether Neil Woodford, manager of the Invesco Perpetual funds that hold 29 per cent of Omega, would agree to sell.

Woodford’s view is critical, after he led a coup in 2010 against Omega’s previous chief executive Richard Tolliday and parachuted in current chairman John Coldman.

Omega admitted other investors were by no means happy at the decision to reject Canopius’ all-cash offer in favour of a lower-priced bid from Byrne that would leave a minority holding illiquid shares.

“The board is aware that amongst the larger shareholders there are different views on the form of the most appropriate transaction,” Omega said. “In view of Invesco Perpetual’s preference for the Haverford offer, no alternative is available to shareholders at present which gives a total cash exit.”

Canopius said it was “disappointed” at being overlooked despite offering Woodford equity in its business.

But Byrne, son of US insurance veteran Jack Byrne, was jubilant.

“You don’t want to do your chicken dance until you get over the tryline, but it does seem that my deal is now favoured,” he said.

TIME LINE | OMEGA INSURANCE’S MANY SUITORS

10 January 2011
Omega confirms unsolicited approach from Canopius offering cash and shares.

18 March 2011
Omega admits it has had several approaches.

9 May 2011
Trade press report that US insurance group Barbican is in talks with Omega.

31 May 2011
Novae says it is conducting due diligence.

13 June 2011
Barbican confirms it has put in a bid.

28 June 2011
Trade press report that Mark Byrne is trying to raise £200m to buy Omega outright.

12 September 2011
Byrne’s Haverford sets out recommended 83p offer for 25 per cent of Omega.

13 September 2011
Canopius says it plans to make an 83p offer.

22 September 2011
Barbican sets out a reverse takeover plan for Omega.

27 September 2011
Byrne posts offer documents; Canopius says it needs two weeks to finish due diligence.

20 October 2011
Canopius terminates talks.