The battle for Bermuda-based Omega Insurance Holdings Ltd is heating up.Former Flagstone Re chairman Mark Byrne told The Royal Gazette that he was confident that he had the necessary shareholder support for approval for his Haverford (Bermuda) Ltd investment vehicle’s £50 million ($78 million) bid to buy 25 percent of Omega and he estimated the deal could close by mid-November.Rival bidder Canopius yesterday issued a statement saying that it expects to have completed its due diligence on Omega by the end of this week and to make a formal offer shortly afterwards.Canopius has already made an indicative proposal to acquire all of Omega’s shares at 83p per share, the same price as Mr Byrne is offering for a quarter of the shares.This comes after a third suitor, Lloyd’s insurer Barbican, threw its hat into the ring last week with a proposal for a merger that would result in Barbican buying 25 percent of Omega shares at 84p.Michael Watson, the chairman of Lloyd’s insurer Canopius, said in yesterday’s statement: “We are encouraged by the feedback from a wide range of institutional shareholders, a significant number of whom have expressed interest in a full cash bid.“We intend to complete our due diligence this week and expect to be in a position to table our bid very soon thereafter.”Canopius believes its timetable would allow for a shareholder vote by mid-November.Mr Byrne insisted that his deal could be done and dusted by then, as it has already won the agreement of the Omega board and the cash to finance the deal is sitting in the bank.Having secured commitments from Omega and major investor Invesco to each tender five percent holdings in the company, Haverford needs agreement from holders of another 15 percent of shares to get his deal approved.“Through our PR firm in London, I’ve been in touch with about 160 shareholders, about 85 percent of the shareholder base,” Mr Byrne said. “It seems to me that roughly half of the group are minded to sell. So approval seems likely.”These indications of shareholder intent left a significant margin for some to change their minds without derailing the agreement, he said.Four regulators will need to approve the deal, namely Lloyd’s of London, the Financial Services Authority in the UK, the Bermuda Monetary Authority and the state of Delaware, where Omega’s US operations are based.If the deal closes, Mr Byrne will become Omega’s executive chairman, would keep the existing management team and would also bring his father Jack Byrne onto the Omega board.Jack Byrne is a legendary figure in the insurance industry, having taken over as chief executive of GEICO in 1975, when the company appeared to be on the brink of collapse. He achieved a spectacular turnaround, which caused Warren Buffett to describe him as the “Babe Ruth of insurance”. He is also known on the Island as the former chairman of Bermuda-based White Mountains Insurance Group.“I thought I’d put him on the board because I’ll get his advice either way,” Mr Byrne quipped.For Mr Byrne, who stepped down as Flagstone’s chairman in 2010, having founded the Class of 2005 reinsurer in the wake of Hurricane Katrina, Omega represents the possible end of a long search for a suitable insurance investment.“We’ve looked at over 100 properties in insurance and we got serious about 10,” Mr Byrne said. “We made bids for three and Omega is the third of those.“The underlying business of Omega, the Lloyd’s syndicate, has been profitable for 29 of the past 31 years. It has a competent management team and a good book of business.”Mr Byrne would look to expand Omega, through adding new lines of business and seeking new merger partners. For now, he feels the company does not have the scale it will need to be competitive after the European Union’s enhanced regulations for insurers take effect in 2013.“In a post-Solvency II world, the amount of capital you need will be greater,” Mr Byrne said. “You will also need additional layers of corporate governance and more executive directors. So the optimal scale will be greater. I would expect to see more M&A happening in London and also in Bermuda.”Omega’s Bermuda operation, based in Crown House on Par-la-Ville Road, employs five people and has a third of the company’s overall capital. Mr Byrne will be looking to free up $100 million of Bermuda capital to fund the writing of about $200 million of new premiums at Lloyd’s.However, he plans to maintain the Bermuda operation, keep the holding company on the Island and grow the business here in time.Bermuda was on track to become one of the first two non-EU countries to gain Solvency II equivalence, he said, which would bolster its reputation as “the most upright of the offshore financial centres”.He also felt the uncertainty of recent years about the Island’s political climate had cleared up since several companies, including Flagstone, opted to move their holding companies off the Island.“I am certainly quite comfortable with Ms Cox’s administration as a government that international business can work with,” Mr Byrne said. “I appreciate there is an election coming up and I can say that we can also work with the people in the opposition party.”