Chaucer sells up to Hanover

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The Independent Online

Chaucer, the Lloyd's of London insurer, has agreed to sell itself to Hanover of the US for £313m after losses mounted from the Japanese earthquake and other natural disasters.

Hanover offered 56p in cash for each Chaucer share, including paying the 2.7p final dividend. Chaucer has been in an offer period since February when Guy Hands' Terra Firma private equity firm made an approach at 65p a share.

The insurer said yesterday it accepted Hanover's bid because it was "a higher offer price than any other written proposals" during the offer period.

Hanover has won irrevocable support from investors holding 21.28 per cent of Chaucer's shares unless a bona fide offer emerges at 61.6p or more.

The structure of the offer and Hanover's solid business also give a high level of certainty to shareholders, Chaucer added.

The 56p offer is only 6.2 per cent more than Chaucer's price before it announced bid approaches.

However, general insurers have had a terrible first quarter, including the Japanese disaster, the New Zealand earthquake and Australian floods. Chaucer has said these could cost it £59m.

The deal will make £2.1m for Chaucer's chief executive, Bob Stuchbery, who owns 0.68 per cent of the shares.