Omega backs Haverford offer

Insurance entrepreneur Mark Byrne pulled ahead in the race to buy Lloyd's of London insurer Omega after Omega and its top shareholder backed his offer, prompting his main rival to withdraw.

Omega, at the centre of a three-way takeover battle since mid-June, will pursue the offer from Byrne's Haverford investment vehicle as the support of 29 per cent shareholder Invesco makes it the only one that can be completed, the insurer said.

"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," Byrne told Reuters in a telephone interview.

Byrne, co-founder of reinsurer Flagstone Re and son of US insurance magnate Jack Byrne, wants to buy 25 per cent of Omega for a maximum of 83 pence per share, and take over as the company's executive chairman.

Lloyd's of London rival Canopius, which had offered to buy Omega outright for more than 83 pence per share in cash while offering Invesco the opportunity to reinvest in the enlarged, privately-held group, withdrew its approach.

"We are disappointed not to be able to proceed with our offer and wish Omega and its shareholders all good fortune," Canopius chairman Michael Watson said in a statement.

Under the Haverford offer, the final price would be that required to achieve a 25 per cent sale after each shareholder submits the minimum they can accept in a so-called Dutch auction.

Haverford has set a maximum price of 83 pence, and a source familiar with the situation said it planned to raise the minimum price to 73 pence from 70 pence.