Omega in Names offer

City A.M. Reporter
OMEGA Insurance plans to boost its exposure to Lloyds of London, spending up to &pound;125m buying out Names who are members of the insurance market&rsquo;s successful Syndicate 958.<br /><br />Omega already has a 16 per cent stake in Syndicate 958, which has turned a profit every year since 1980. It is offering to pay private investors in the syndicate, known as Names, between &pound;50m and &pound;125m in cash or shares in order to raise its stake as high as 50 per cent.<br /><br />Chief executive Richard Tolliday said it was the only capacity offer Omega would make this year after the company raised &pound;130m from investors at the start of the year to help fund expansion.<br /><br />Omega will offer existing capacity holders 0.332 new shares for every &pound;1, which equates to about 45p based on the current share price. Names will also be able to opt for a cash alternative of 40p.<br /><br />Charles Coyne, analyst at Finncap, said it was a sensible strategic move by Omega but that, based on past experience, there was no guarantee existing syndicate members would accept the offer.<br /><br />&ldquo;Since capacity on the syndicate has rarely traded above 20p per pound this looks reasonable, but Names are notoriously difficult to shift,&rdquo; Coyne said.