Commercial General Union (CGU) has brought months of speculation to an end with an agreed cash offer for Hibernian Group, which values the group at £413 million (€524 million) and for which it already has acceptances from a majority of shareholders.
If successful, the bid will create the second-largest general insurer in the State by combining Hibernian's 12.5 per cent share of that market with CGU Ireland, which has a market share of 6.1 per cent. This will put it just behind GRE/PMPA, which had a market share of 19 per cent at the end of last year.
"The combination of Hibernian and CGU should enhance significantly the position of the combined group in the life and savings and general insurance markets in Ireland, one of Europe's major growth economies," CGU chief executive Mr Bob Scott said.
Following the merger of Commercial Union with General Accident last year, CGU holds a 28 per cent stake in Hibernian. The company has also received acceptances of its offer from Hibernian's two largest shareholders, the German insurer, Munich Re, and Bank of Ireland Asset Management (BIAM) and from Hibernian's independent directors.
The offer had been conditional on these groups of shareholders accepting it by a deadline of 3 p.m. yesterday. Their acceptance means that investors representing 53 per cent of Hibernian have now approved the deal.
Under the terms of the offer, shareholders are being offered £7.60 (€9.65) in cash for each Hibernian share they hold. The price represents a premium of 61 per cent over the last-dealt price of Hibernian before the offer was announced. It is below the highs which Hibernian hit last year.
The company intends to combine Hibernian's operations with CGU's general and life insurance businesses in the Republic under the Hibernian brand. Products such as CGU's successful withprofits bonds will be sold through Hibernian's distribution channel.
Hibernian currently employs around 800 people, while CGU has some 270 employees in the Republic. Hibernian chief executive Mr Pat Gorrian says there may be some overlaps but these should not be extensive.
"This is really a story about growth. Following the offer, we will have the widest product range, the widest distribution network. There will be lots of work, plenty to do."
