UK based (re)insurance underwriter Canopius Group has made a formal offer to acquire Omega Insurance at a price of 67 pence per share which sums up at nearly £164m.

Canopius will fund the acquisition from a mixture of new shares in Canopius representing a 30% increase in shareholders’ equity, existing cash resources, and an increase in the group’s LOC facility, said the acquirer.

Upon completion of takeover, which is subject to necessary regulatory approval and acceptance by Omega Shareholders, will boost Canopius’s insurance business at Lloyd’s and set up a base in the US while delivering improved long term returns.

Omega’s existing business platforms at Lloyd’s and in Bermuda and the US will be combined into the Wider Canopius Group, under the Canopius brand.

Commenting on the acquisition, Canopius executive chairman Michael Watson said the firm’s long-held interest in acquiring Omega is well-known and it is pleased to have secured the recommendation for its bid from Omega’s Board.

"We hope for a speedy completion of this acquisition which will help us realise our ambition of building a leading Lloyd’s business in terms of both quality and scale," Watson said.

The acquisition would also be able to alleviate any negative impact causing due to economic turmoil, while positioned it to comply toregulatory changes by adopting diversification of the combined businesses.

Omega has reported that its pretax loss doubled to $95m last year due to an increase in catastrophe claims.