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Flagstone co-founder Byrne seeks to buy Omega

Former Flagstone Re chairman Mark Byrne is seeking to make a return to the Bermuda insurance market.

Mr Byrne is reportedly prepared to make a bid of some $325 million to buy Bermuda-based re/insurer Omega Insurance Holdings Ltd, according to a report in the British newspaper the Daily Telegraph.

A source close to the situation confirmed with

The Royal Gazette that Mr Byrne made a presentation to the Omega board in Bermuda last week on behalf of his investment company Haverford (Bermuda) Ltd.

The source added that Canopius is also in the bidding and that its senior representatives have been in contact with Omega in London. Canopius also has an operation in Bermuda, based in Par-la-Ville Road. Another British insurer, Barbican Insurance, is also reportedly also interested.

In its interim statement to the London Stock Exchange yesterday, Omega said it hoped to conclude talks with suitors “shortly”.

Hopes that Omega will be acquired helped to boost the company’s share price yesterday by 5p, or 8.2 percent, to 66p. The Telegraph’s report suggests that Mr Byrne would be willing to pay between 82p and 87p per share.

Mr Byrne is well known in Bermuda, having co-founded Flagstone Re after in 2005 with its current chief executive officer David Brown. He also served as chairman of the Education Board for six months, but stepped down. claiming the political will to make the necessary changes to the public education system was not there.

Mr Byrne stepped down as the Flagstone’s executive chairman in May 2010. Days later, he gave an interview to this newspaper, in which he told of his plans to sail around the Pacific Ocean with his young family, while exploring business opportunities.

He concluded the interview by saying: “I’m sure Bermuda and the reinsurance industry has not seen the last of me.”

Omega’s interim report showed the company posted a pre-tax loss of $49.1 million in the first half of this year, compared to a loss of $34.2 million in the same period in 2010.

Omega was hit hard by $51.3 million in catastrophe losses, net of reinstatement premiums, and said it will pay no dividend for the first half of the year.

The company stated yesterday: “As previously announced, Omega has received a number of approaches that may lead to an offer being made for the company and the directors will continue to review these approaches in the context of the best interests of the business and all stakeholders. We are striving to conclude the process shortly.”

As well as being domiciled in Bermuda, Omega also writes reinsurance here through its Omega Specialty division. That business was scaled down during the first half of the year as part of the group’s plans to reposition its book of business.

Omega Specialty wrote $28.9 million in gross premiums during the first half of this year, just over half of the $56.5 million it wrote in the same period last year.

“We do not plan significant further writings in Bermuda this year, which will allow more efficient use of capital,” Omega’s statement said.

In line with its scaling down plans, the group’s gross premiums written fell 15.4 percent to $206.5 million, compared to $244.1 million in the first half of 2010.

Omega chief executive officer Richard Pexton said: “This has been the costliest first half for insured catastrophe losses on record and Omega’s half year result is largely attributable to those industry losses.

“As a result of the actions we have taken over the past 12 months our catastrophe losses are now in line with our peers. These actions have included the significant reduction in the more volatile areas of our catastrophe account and the placement of a more effective reinsurance programme.

“We have purchased additional reinsurance cover, all of which remains intact for the US wind season, and in the event of a major industry wind loss in the second half, we would expect significant rate improvements across several of our classes.”

Mark Byrne: The former Flagstone Re chairman is seeking to buy Omega

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Published September 01, 2011 at 10:34 am (Updated September 01, 2011 at 10:33 am)

Flagstone co-founder Byrne seeks to buy Omega

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