CNA Financial buys Bermuda reinsurer Hardy

THURSDAY, MARCH 22: Hardy Underwriting Bermuda Limited has been bought out by CNA Financial Corporation for $227 million.

The two insurers agreed to terms on a cash acquisition by CNA of all common shares of Hardy.

The acquisition is to be implemented by way of a merger under the Bermuda Companies Act. CNA will pay approximately $227 million (US) for the Hardy common shares.

The proposed transaction has been approved by the board of directors of both companies.

Subject to the approval of Hardy shareholders, regulatory approvals and other conditions set forth in the agreement, the acquisition is expected to be completed during the second quarter of 2012.

Under the terms of the agreement, Hardy shareholders will be entitled to receive 280 pence ($4.44 US) for each common share.

The acquisition price values Hardy's entire issued and to be issued share capital at approximately £143 million ($227 million US).

Thomas Motamed, chairman and CEO of CNA Financial, said: “We are delighted to have reached this agreement. Hardy is a specialist insurer and reinsurer with a respected brand and a long and distinguished history of disciplined underwriting in the Lloyd’s market.

“While Hardy’s recent results reflect the extraordinary level of natural catastrophe losses across the global insurance industry, the Hardy franchise is built on a strong foundation and has a bright future.

“The proposed Hardy acquisition significantly expands CNA’s global capabilities and aligns well with our specialized underwriting focus.”

Mr Motamed continued: “Hardy and CNA share similar underwriting and management philosophies. We are pleased that Barbara Merry, Chief Executive, and Patrick Gage, Director of Underwriting, will continue to lead their outstanding team.”

Aon Benfield Securities is acting as financial advisor to CNA in connection with the transaction. Rothschild and Peel Hunt are acting as financial advisors to Hardy in connection with the transaction.