Shares of Bermuda-based Omega Insurance Holdings plunged nearly eight percent yesterday after Mark Byrne’s Haverford (Bermuda) Ltd warned it may drop its bid to buy a one quarter stake in the insurer.The London-listed company’s shares fell 5.3p, or 7.8 percent, to close on 62.45p after Haverford’s announcement before the start of the trading day.Haverford cited a “very significant and unexpected deterioration in Omega’s financial position and prospects”.Mr Byrne, the co-founder of Flagstone Re, has been looking to buy a 25 percent stake in Omega. If he succeeds, he will become the company’s chairman.In September, Haverford made a “Dutch auction” bid with a range of between 70p and 83p per share for Omega. The offer was due to expire at 1pm London time on Wednesday.Omega last month reported a 16 percent drop in nine-month gross written premiums and raised its estimate for the cost of 2011 catastrophes by $6 million.It was reported that Haverford had made a new fixed-price bid of 74p per share on Wednesday, as talks continued between the parties after the deadline for the original deal passed.Haverford said in a statement this morning that it may not extend its offer to buy up to 60.2 million shares and that, contrary to guidance from Omega this week, its offer may therefore lapse.“HBL (Haverford) does not agree with Omega’s announcement that if the minimum levels of tenders were received by 1pm yesterday, the offer may not lapse,” Haverford said.Mr Byrne said Haverford had sought further details from Omega after its November 18 results, as it tried to “understand the reasons for, and consequences of, the very significant and unexpected deterioration in Omega’s financial position and prospects”.