Omega agrees to sell 25% stake to Byrne
Bermuda-based Omega Insurance Holdings Ltd has agreed to sell a quarter of its shares to Mark Byrne's Haverford (Bermuda) Ltd.
Haverford will buy up to 60 million shares in the insurer in a tender capped at 83 pence ($1.32) per share, a premium of 26 percent to Omega's closing price of 66 pence on Friday, Omega said in a statement yesterday.
The stake is valued at around £50 million ($79.4 million).
Mr Byrne, the founder of Class of 2005 Bermuda start-up Flagstone Re, will become executive chairman of Omega while his father, US insurance magnate Jack Byrne, will join the board as a non-executive.
Omega made a net loss of $49 million in the first half of the year as catastrophe losses took a heavy toll.
“While the company has experienced a challenging couple of years, the future for its core business looks bright,” said Mark Byrne in a statement.
Mr Byrne's strategy would be to simplify the business, rebrand it and return the underwriting operations to overall profitability, Omega added.
Omega has been in offer talks for some months, with British insurers Barbican and Canopius both previously vying to take over the company.
In its statement, Omega said the deal would allow Omega Shareholders to receive cash in some of their shares at a substantial premium to Omega's closing share price last Friday of 66 pence, while also providing an opportunity for continued investment in the business.
Omega shares closed 5p higher at 71p in London Stock Exchange trading yesterday.
Mark 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.
Jack Byrne is a legendary figure in American insurance, having taken over as chief executive of GEICO in 1975, when the company appeared to be on the brink of collapse. He achieved a spectacular turnaround, which caused Warren Buffett to describe him as the “Babe Ruth of insurance”.
He is also known on the Island as the former chairman of Bermuda-based White Mountains Insurance Group.