Lloyd's agency attracts US offer

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The Independent Online
The reconstructed Lloyd's insurance market received a vote of confidence yesterday when Chartwell, a big US insurance group, made a pounds 35m recommended cash offer for Archer, one of the top 10 managing agencies.

The offer came 11 days after the two sides announced they were in talks, and is one of a series of takeovers of Lloyd's managing agencies by outside companies.

Managing agencies look after syndicates of Lloyd's investors - the market's names - and appoint insurance underwriters. There has been renewed interest in them in recent months, since it became clear in the late summer that the market's pounds 3.2bn rescue plan was likely to go ahead. The rescue was approved by the Government last month.

Archer would provide Chartwell with significant geographic diversification and direct access to the Lloyd's marketplace for future growth, said Richard Cole, chairman of Chartwell.

In other recent moves, Capital Re of the US has reached preliminary agreement to acquire RGB Underwriting, which has insurance capacity of pounds 100m, and CLM, the UK Lloyd's investment fund, has agreed to acquire JH Chappell, which has pounds 30m capacity. Archer is much bigger than these two, with pounds 420m of insurance underwriting capacity.

Chartwell's offer of 92.5p a share includes a loan note alternative .

The Archer directors, who speak for 22.4 per cent of the company, have given irrevocable undertakings to accept the offer in respect of their entire holdings. The undertakings are also binding if there is a higher offer for Archer.

Chartwell now owns or has undertakings to accept the offer in respect of 52.3 per cent of Archer's issued share capital.

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