Brit Insurance turns up heat on Apollo with £48m profit
BRIT INSURANCE, the Lloyd’s of London reinsurer, will turn up the heat on US private equity suitor Apollo on Wednesday when it says it bounced back into first-half profit.
Brit, which sponsors the England cricket team, is expected to say it generated a pre-tax profit of £48m in the six months to June compared with a £9m loss in the same period last year. Analysts predict a six per cent drop in gross premiums to £907m.
Brit’s interims will put pressure on Apollo to come up with a third indicative offer or walk away. Just over three weeks ago, Brit spurned a sweetened offer of £10.50 per share worth £824m, saying it undervalued the company.
Chief executive Dane Douetil and chairman John Barton have played a high-stakes game. Brit’s shares closed at 910p on Friday. Analysts believe they will fall back to around the 800p level if Apollo abandons its pursuit, which would displease many smaller shareholders.
Fellow Lloyds of London outfits Novae Group and Chaucer Insurance have been touted by analysts as potential bid targets should Apollo back away from Brit. Novae closed at 310p on Friday, a 26.7 per cent discount to its 2009 tangible net assets (TNA), while Chaucer closed at 45.5p, an 18 per cent discount to 2009 TNA.