Chaucer shuns Terra Firma for #313m takeover by Hanover
Chaucer has ended more than two years of speculation about its future by accepting a £313m cash offer from US general insurer The Hanover.
By Jamie Dunkley 11:15PM BST 20 Apr 2011
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The Lloyd’s of London insurance group recommended the 53.3p-a-share offer after rejecting a rival bid from Guy Hands’ private equity firm Terra Firma. Over the past two years, Chaucer has also rebuffed interest from Brit Insurance and Novae.
Chaucer Holdings
Bob Stuchbery, Chaucer chief executive, said a deal would enhance the company’s presence in the US market. Frederick H. Eppinger, president and chief executive of The Hanover, added: “The combined organisation would provide both companies with the benefits of greater scale, earnings diversification, and expanded market presence.”
Chaucer said it already had the backing of 21.28pc of its shareholders, including Aberdeen Asset Management, which is run by its own chairman, Martin Gilbert.
However, in a separate statement, Pamplona Capital, the company’s largest investor with a 9.9pc holding, said it would not back the deal. “We believe the price is inadequate and have no current intention of accepting this offer,” it added.
Chaucer expects to incur claims of up to £35m from March’s earthquake and tsunami in Japan, based on industry claims of up to $30bn (£18.2bn).
Earlier this year, the group saw pre-tax profits dip to £32.9m, from £42m in 2009, following heavy catastrophe claims in 2010.
The news is the latest wave of merger and acquisition activity in the Lloyd’s markets. Other companies tipped for deals include Omega Insurance, which received a bid approach from Canopius in January.
Chaucer shares rose 1¼ to 55¼p.
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