HCC Trying to Buy Centris of Costa Mesa

Centris Group Inc., a Costa Mesa-based underwriter of medical and property casualty insurance, said Tuesday it has received an unsolicited buyout bid from Houston-based aviation insurer HCC Insurance Holdings Inc. to acquire the company for $13.25 a share.

Centris’ stock moved up more than 24%, or $2.69 a share, to $13.69 after the company disclosed the bid and said it would review the offer.

If HCC is successful in buying the 92.2% of the company it doesn’t own, Centris would be valued at $155 million. HCC also would become one of the top providers of medical stop-loss insurance, which covers unexpected medical claims against employers that self-insure their employees’ health care.

The HCC offer came after talks between the two companies on a possible merger broke down last year when Centris Chief Executive David L. Cargile chose to remain independent.

HCC has annual medical stop-loss premiums of about $250 million, while Centris earned about $80 million in premiums for the first nine months of 1998, according to federal filings.

Centris has been pressured by key shareholders in recent years to put itself up for sale. Last year, for example, Dorchester Partners LP in Los Angeles and Michael J. Halpern urged the company’s directors to consider a number of options to improve shareholders’ value, including a sale.

Halpern said Tuesday he no longer owns Centris stock.

Separately, HCC said Tuesday it had agreed to buy Pepys Ltd., the parent of Lloyd’s of London broker Rattner MacKenzie Ltd., possibly for a combination of stock and cash. Exact terms of the transaction, which is expected to close by the end of the month, weren’t disclosed.

HCC stock rose $1.13 to $21 on the New York Stock Exchange.

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Centris Gets an Offer

HCC, after negotiating unsuccessfully to acquire Centris Group, is making an unsolicited bid for the firm. The companies at a glance:

Centris Group

Headquarters: Costa Mesa

Employees: 196

Chief executive: David L. Cargile

1997 net income: $15.2 million

1997 premiums: $159.5 million

Tuesday stock price: $13.69

Daily change: +2.69

Stock exchange: NYSE

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HCC Insurance Holdings

Headquarters: Houston

Employees: 929

Chief executive: Stephen Lyndon Way

1997 net income: $49.8 million

1997 premiums: $163.1 million

Tuesday stock price: $21.00

Daily change: +1.13

Stock exchange: NYSE

Source: Bloomberg News