UK - Pamplona challenged for stake in Chaucer

Brit is offering 0.23 shares of its own company for each Chaucer share, valuing a share at 40.25 pence, based on the closing price of 42 pence on Friday June 19.

On the back of the offer, Pamplona, who owns 40 million shares in Chaucer and controls a 7.3% stake, has applied the FSA for permission to build a holding of over 10% in the company. The private equity firm has announced its intent to up its stake in Chaucer to 29.9%.

The Brit bid, which is almost a third below Chaucer's book value, is likely to be unpopular with the company's shareholders.

It is reported that no action will be taken by Chaucer's shareholders until the Brit offer can be further studied. Shares in Chaucer were down 5.36% yesterday.

Chaucer is an insurance underwriter for the Lloyds market.

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