Beazley in threat to pull Hardy bid

The Lloyd's of London insurer Beazley threatened to pull its bid approach for rival Hardy Underwriting yesterday after a sweetened offer worth £174m was rejected.

Dublin-based Beazley said it would walk away unless Hardy agreed to discuss its revised 330p a share proposal, up from an initial 300p last month.

Hardy said the new proposal still "substantially undervalues" the company, describing it as "an attempt to acquire the company opportunistically".

Beazley's chief executive, Andrew Horton, said the company now hoped to discuss its latest proposal directly with Hardy's shareholders this week. "If the shareholders are not happy with 330p, or if the shareholders who work with Hardy management don't talk to us, we will be withdrawing our proposal," Mr Horton added.

Hardy's shares gained 6.5p to close at 305p yesterday, while Beazley rose 2.3p to 119.3p. Lloyd's of London insurers have been at the centre of takeover speculation because an unpromising trading environment has weighed on their share prices, opening up potentially attractive acquisition opportunities.

Buying Hardy would diversify Beazley's predominantly US-focused business, while giving it access to more lucrative catastrophe insurance business. Hardy shares lost a fifth of their value between the start of the year and Beazley's first approach after bigger-than-expected catastrophe claims almost wiped out its half-year profit.