Insurance Australia Group Ltd Chief Executive Michael Hawker resigned on Monday, saying he had lost the confidence of some shareholders after the board spurned an $8.3 billion take-over offer by rival QBE Insurance Ltd. "Hawker was under pressure, even before the take-over they had a couple of downgrades," said Tom Elliott, managing director of hedge fund MM&E Capital.
"To me it was arrogance on behalf of the board not to entertain the bid. I suspect he realised he made a mistake." IAG shares slumped last week after it rejected QBE's sweetened A$8.7 billion offer as too low. The shares briefly rose as much as 3 percent on Monday after the news on Hawker, but last traded flat at A$3.98, well short of QBE's pitch at the equivalent of A$4.60 a share.
QBE was down 1.6 percent at A$25.06. IAG's board did not put QBE's revised offer to shareholders and some, including fund manager 452 Capital, said IAG did not give sufficient reasons for rejecting the offer.
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