MULTIPLE institutional shareholders of Omega Insurance are deeply unhappy about the price offered by the recommended bidder for a chunk of its shares, City A.M. has learned.
Shareholders including Omega’s founder John Robinson are “very aggrieved” that an offer tabled by US insurance entrepreneur Mark Byrne for 25 per cent of the company will use a complex auction process to pay them anything between 70p and 83p per share, rather than a fixed price.
Several are determined not to tender their shares until Byrne commits to offering a fixed price of about 83p, which still undervalues Omega’s net book value but is higher than its 68p share price.
“You will struggle to find one shareholder that will tender at 70-73p,” one investor told City A.M. “We won’t be tendering any shares.”
Invesco Perpetual, Omega’s biggest investor with a 29.9 per cent stake, supports Byrne’s offer and has rejected rival bids from unlisted insurer Canopius and US group Barbican. But with both rival bids priced at about 83p, investors are reluctant to accept a lower price.
Another shareholder, Richard Bernstein, chief executive of Crystal Amber with a 3.2 per cent stake, said he believed Byrne would accept their concerns and fix the bid price.
“He is the bidder; he has initiated this and the conventional way is that bidders pay a fixed price. We are confident that Mark Byrne will listen to the owners of the company,” he said.
Omega sought to play down the divisions, saying it had consulted all shareholders and recommended the best offer. “The board has put the only proposal which could be implemented to shareholders,” it said in a statement.
Byrne was also unhappy that his bid – a 45 per cent premium to Omega’s pre-bid share price – had gained so little support.
“I don’t know how people can complain that they are not getting a good deal,” he said. “There were no other offers, only indicative proposals, for a year. I am the first guy to come along with an offer.”