Beazley bosses bought shares between bids

Three board directors of Beazley and the wife of a fourth bought more than £347,000 of shares in the besieged insurer between undisclosed bids from rival Zurich, The Mail on Sunday can reveal.

They are sitting on paper profits totalling £154,000 after Beazley shares soared last week when the Swiss insurance giant finally made its long-running pursuit of its FTSE 100 target public.

While there is no suggestion the directors broke any laws or takeover rules, the purchases highlight a grey area for those with perceived access to privileged or price-sensitive information not available to their shareholders. Beazley has rejected Zurich’s latest bid, worth £7.7 billion, saying it ‘significantly undervalues’ the cyber specialist insurer.

Zurich went public about its long-standing interest in Beazley after making several undisclosed offers that shareholders only learned about last week.

Beazley said it was first approached by Zurich in June last year and gave the Swiss insurer ‘limited due diligence information’ before an £8.4 billion bid was tabled – and rejected – later that month. Zurich came back with two more bids this month and went over the heads of the Beazley board by announcing its latest offer directly to shareholders.

The Beazley board members bought their shares in the middle of August, almost two months after rejecting Zurich’s initial tilt. The biggest purchase was made by Carolyn Johnson, who sits on Beazley’s risk and appointments committee.

According to stock market filings, she paid almost £177,000 to buy 22,800 shares at 776p each.

These are now worth nearly £258,000 after last week’s share price leap. The other directors who bought Beazley stock around the same time were John Reizenstein, who is chairman of the audit committee, and Raj Agrawal. Barbara Stuchbery, the wife of another Beazley board member, Robert Stuchbery, also purchased shares.

Under takeover rules, companies on the receiving end of a bid do not have to tell shareholders if the board rejects the approach. An exception is if there is a leak, which did not occur in this case.

Sources also say that the Beazley directors would not have known when they bought their shares if Zurich planned to come back with another offer.

They also point out that Beazley continued with a $500 million (£375 million) share buyback programme after the initial Zurich offer was made in June, meaning the board thought the shares were undervalued. Zurich has until February 16 to make a firm offer or walk away from a deal for six months.

Beazley said: ‘The company has policies in place to ensure any dealings are lawful.’ The Takeover Panel, which supervises bids for quoted companies, and FCA declined to comment.