Chaucer Hldgs Share Discussion Threads

[effortless cool] 21/4/2011 15:54

Little Beaker, Little Beaker, where are you Little Beaker?

We're still waiting for a cogent argument as to why this is worth more than the offer. Or did you hit your cogency ceiling with "you're a idiot"?

[effortless cool] 21/4/2011 13:33

From the Beazley IMS this morning.

"Following the recent catastrophes, we are seeing some hardening of premium rates in the affected classes. In general, trading conditions remain challenging and we do not believe these events alone will be sufficient to turn the overall market".

[effortless cool] 21/4/2011 13:31

I'm up over 35% in 2011.

Imagine how much better I'd be doing if I wasn't an idiot.

What sort of profit have the clever people made, Little Beaker?

[little beaker] 21/4/2011 10:39

London-quoted Lloyds ILV price/NTAV ratios have been rising sharply over the last few months on the back of the various disasters - the promise of increased premiums have trumped the costs of the disasters, along with a revaluation of the sector.

Have you actually bothered to look at the share price movements of peers such as HSX, CGL, AML, NVA, HDU, etc? You, sir, are an idiot.

I agree with Pamplona's stance and expect a higher price.

[effortless cool] 21/4/2011 09:05

Boros10 - on further reflection, I reckon if (c) happens it is likely to come with a small (0.5p) increase in the offer, as a face-saver for Pamplona.

FATKEN - I'm out of the sector just now, as i think prospects are uninspiring.

[fatken] 21/4/2011 08:52

@Boros10 and @Effortless Cool - according to the Times today, Pamplona bought in at 44p and is currently sitting on a tidy profit. I agree with the others that a higher bid is unlikely, given the Japanese, NZ and Chilean disasters. If the bid falls, my concern is that near-term dividends will be reduced or even suspended to preserve capitals.

Having sold out my position in Chu, I am actively looking at other Lloyds insurers such as Omega/Novae. Any views?

[boros10] 21/4/2011 08:39

Good post Effortless Cool in setting out the viable scenarios. I agree this is likely to be the best offer around and the chance of a better one emerging is small.

I think the possibility of Pamplona scuppering the deal will have been carefully considered by Hanover before making their bid. So I reckon option (c) is the more likely. Option (a) cannot be ruled out. Hanover may have kept a few pence in reserve to bring Pamplona around.

Does anyone know how much Pamplona paid for it's stake?

[effortless cool] 21/4/2011 07:10

Management has done well in these negotiations and those of you that are bleating about the price are, I believe, simply showing that you don't have a clue about what you are invested in.

Challenge - can any of you present a cogent argument as to why the price should be higher?

Even at this price, Pamplona's stance suggests this is not over yet. They hold/control enough to block compulsory purchase, and are no doubt actively lobbying uncommitted institutions to join their game of hardball.

Possible outcomes:
(a) The Hanover raise their price to bring Pamplona (and any other holdouts) on board;
(b) Someone else comes in with a higher offer;
(c) The Hanover call Pamplona's bluff and either Pamplona accept the offer or The Hanover tolerates a fractious minority shareholder; or
(d) The Hanover withdraw and we are as you were.

The most realistic hope for those wanting more is (a), although with the offer already being at a fairly full price, I find it impossible to imagine any increase exceeding 2p.

The terms of the Hanover offer, I believe, effectively scupper (b). The additional costs involved simply make CHU too expensive.

Regarding (c), I don't see Pamplona conceding and think it unlikely that The Hanover will accept a continuing minority interest (but can't speak with any authority in either respect).

It's very hard to call, but my money would be on (d) at the moment.

[bestace] 20/4/2011 18:33

Chaucer Holdings Plc (CHU)'s biggest shareholder, Pamplona Capital Management LLP, said it won't accept Hanover Insurance Group Inc. (THG)'s 313 million-pound ($510 million) offer for the Lloyd's of London insurer.

"We believe that the price is inadequate and have no current intention of accepting this offer," spokesman Peter Hewer said by telephone today.

[bestace] 20/4/2011 14:04

Chaucer has accepted a £313m cash takeover bid from The Hanover, a $2bn US general insurer, almost certainly ending a near two-year spell on the sales block for the Lloyd's of London insurer.

The company had also been holding talks with Guy Hands' Terra Firma, which in February made an approach with an indicative 65p offer and has ultimately been priced at 53.3p by The Hanover with a promise to fulfil the declared final dividend of 2.7p.

[harleymaxwell] 20/4/2011 12:22

yes but that was a year ago and now we are heading into a market with rates going up....

[edmundshaw] 20/4/2011 12:13

Good point. crawford, always the voice of reason :)

[crawford] 20/4/2011 12:05

The offer is around the same as BRE take out.

[boros10] 20/4/2011 09:13

Probably worth holding onto at least until the dividend goes ex in two weeks time (unless you want to take this income as capital for tax reasons). Thereafter, it depends on the opportunity cost.

Holding till the offer completes in July (although this might get delayed waiting for FSA approval) avoids further transaction costs and leaves you in the game should a higher offer materialise. Worst case is a 1.4% return (between offer price and price if sold now) - equivalent to 5% to 6% annualised. Best case is 10% plus if a counter offer is forthcoming.

[solarno lopez] 20/4/2011 08:57

Agree CARL

[this_is_me] 20/4/2011 08:57

Don't forget that the chairman is CEO of Aberdeen Asset and can vote all the shares of their clients. The whole thing stinks.

[carl79] 20/4/2011 08:54

If it truly is low-ball, we'll see a better offer. It's not as if the company is not already on a couple of radars...

[this_is_me] 20/4/2011 08:33

An insurance company, like a bookmaker can have an unlucky year. That changes nothing.

The more I think of it the worse the offer appears. The share price has been moving up steadily for the last two years and should continue to do so whatever the occasional blip in earnings (up or down)

[edmundshaw] 20/4/2011 08:20

Break fee is approx. £3m. The cash offer values Chaucer around £65m. So Offers of 62p per share anyone? Agree with tom, given the Japan cat, I think that's optimistic, though not impossible.

The divi would likely not be covered this year imo. Holding on to the co would be a long term strategy. You cannot ignore the change in circumstances due to the exceptional cat losses this year imo. In December 60p was a lowball offer. Now 56p is OK I think. Times change.

[tom111] 20/4/2011 08:17

Cant see any more bids personally,unforunatley

[solarno lopez] 20/4/2011 08:14

If it is worth MUCH MORE than another bidder will appear

[this_is_me] 20/4/2011 08:11

If that is all the profit you want then you would be better putting your money in a building society.

I am angry about this; the company is worth much more so somebody is going to make a great deal of money if it is sold at this price and that will probably be the management.

[topvest] 20/4/2011 08:10

Yes, a poor offer.

[carl79] 20/4/2011 08:05

Could be a tactic to energise other bidders who may see this as the final furlong so if they want the company, they'll need to dig deeper or see if sold to a competitor....Or it could simply be the best they'll get in which case is voting against it wise? I only dipped my toe here so not entirely fussed. 56p allows me to get out with a small profit but I was hoping for a 60p+ exit PLUS divi!!