Woodford looking at loss as Omega offer stutters

 
David Hellier
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INVESCO Perpetual’s Neil Woodford was last night left to rue his decision to back insurance tycoon Mark Byrne’s move to take control of Omega Insurance, the company in which Woodford has a near 30 per cent shareholding.

Byrne has tendered for a 25 per cent stake in the struggling group at a price of between 70p and 83p, with many shareholders expecting a price at the top of that range.

But with just two days before the closing deadline for the tender, Byrne’s backers have been signalling that there is every chance he might try to negotiate a new lower offer.

Omega announced disappointing third quarter results at the end of last week and spooked the markets by saying it needed higher reserves for past catastrophes. The company’s net tangible assets have since fallen from 84p to 75p a share, giving Byrne ammunition to lower his offer price.

Byrne’s tender offer has always been subject to certain regulatory clearances, some of which have not been made, leaving him the option of lapsing his bid later this week.

He would then be free to come in again with a lower offer or walk away altogether. Some shareholders, but not Woodford, were always keener on a full bid from rival Canopius at 84p a share.