The biggest investor in Novae Group has hit out at the Lloyd’s of London firm’s deal with Axis Capital, saying the Bermuda-based company’s offer undervalues the specialist insurer. Axis unveiled an agreed $604m (£468m) takeover of Novae today, in an effort to boost its presence in the Lloyd’s of London insurance market. The deal could leave only three specialist insurers listed on the London Stock Exchange. However, Neptune Investment Management, which has a 16pc stake in Novae, said Axis’s 700p-a-share cash bid had come after a “torrid” nine months for the company. Mark Martin, head of UK equities at Neptune, said that the share price has been hit by short-term issues and could rise by 20pc. “It’s undervalued because management have made some decisions around accounting that have caused short-term pain but will benefit over the long term,” Mr Martin said.
A proposed takeover of Novae by Axis Capital would leave only three publicly listed specialist insurers at Lloyd's of London. The $604m deal will mean only Lancashire, Beazley and Hiscox will remain of the London Stock Exchange-listed companies on the long-established market. The largest investor in Novae, Neptune Investment Management, has complained that the merger undervalues the target firm. Shares in Novae soared as investors bet an improved offer would be made. Shares of the other three listed Lloyd's companies also rose.