Equilibria Capital Management is now 23.90 per cent owner of Argus Group Holdings, according to an announcement from the insurer today.

The actual change in shareholding was not disclosed in the release, but based on previous statements, the Bermudian-based investment company has significantly increased its ownership.

It has done so just as Argus, a major local insurer, is locked in a battle to purchase more than one third of rival BF&M, a move that could significantly consolidate healthcare in Bermuda.

The Equilibria position has been building for years.

In July 2020, it said it owned 11 per cent of the insurer, and by November that year, Equilibria was a 12.5 per cent owner of Argus.

The two companies entered into a “relationship agreement” at that point, and as part of the deal, the investment company got a seat on the board.

Garrett Curran, managing director of Equilibria and former managing director of Credit Suisse in Britain, became a director of Argus.

He sits on the audit and compensation committees, as well as on the boards of some subsidiaries, according to the most recent Argus annual report.

In January 2021, the Equilibria stake was 15.36 per cent, and by June of that year, the insurer said that the fund had increased its stake to 17.12 per cent.

It now owns almost a quarter of the shares, according to the disclosure.

In recent months, Argus has sought to gain a significant stake in one of its competitors.

In early June, it agreed to buy 36.9 per cent of BF&M from an existing shareholder for $100 million.

Under the terms of the deal, an Argus subsidiary is to buy the BF&M stake from a Camellia plc subsidiary for $50 million of cash on hand and $50 million raised through the issuance of debt. The transaction is scheduled for completion in the autumn.

BF&M is resisting the sale and is putting aggressive defences in place. It responded to news of the transaction by passing a shareholder rights plan, also known as poison pill, last week.

Under the terms of the plan, existing shareholders will be able to buy an additional share of BF&M at a discount, or get one for free, for each share they already own when Argus completes the purchase.

The acquirer will not get the free or discounted shares.

If the poison pill is triggered, the Argus stake would immediately be diluted, making the transaction far more expensive and far less effective in terms of ownership and potential control.

Most such poison pills are effective in stopping deals, and courts in Bermuda and elsewhere have upheld their use.

The Argus purchase of BF&M shares has been unpopular with some Bermudians. Those opposed are concerned about the lack of competition in healthcare, as Argus, which already controls 40 per cent of primary care in Bermuda, could become a dominant player in the provision of health insurance.

Bermuda does not have competition laws that would allow the transaction to be stopped on anti-monopoly grounds.