* New deal is an increase from earlier offer
* Tower Group to buy a stake in Canopius
LONDON, April 25 (Reuters) – Lloyds of London
insurer Canopius said it had agreed to buy rival Lloyd’s insurer
Omega after raising its offer to 164 million pounds
($264.6 million) in a recommended cash deal.
Canopius said on Wednesday it will pay 67 pence per share,
raising an approach it made earlier in April by 2 pence per
share to secure the support of the board.
The suitor said institutional shareholders owning 49 percent
of Omega said they would accept the offer.
Small Lloyd’s of London players are seen as vulnerable to
takeovers because persistently weak insurance prices have
weighed on their shares, with proposed tighter capital
requirements for European insurers adding further pressure.
Omega last month said its pretax loss doubled to $95 million
last year because of a surge in catastrophe claims.
.
Separately, American insurer Tower Group said it
would acquire a 10.7 percent stake in Canopius following the
close of the Omega deal for some $75 million.
Tower will get one seat on Canopius’s board and will get an
option to merge its business with Canopius’s Bermudan
reinsurance operations.
