Bermuda-based reinsurer Haverford warned it may walk away from a bid to buy 25 percent of London-listed rival Omega , citing a very significant and unexpected deterioration in Omega's financial position and prospects.

A spokeswoman for Omega, which last month reported a 16 percent drop in nine-month gross written premiums and raised its estimate for the cost of 2011 catastrophes by $6 million (3 million pound), declined to comment.

Haverford said in a statement on Thursday it may not extend its offer to buy up to 60.2 million shares and that, contrary to guidance from Omega this week, its offer may therefore lapse.

HBL (Haverford) does not agree with Omega's announcement that if the minimum levels of tenders were received by 1.00 pm yesterday, the offer may not lapse, Haverford said.

Headed by insurance entrepreneur Mark Byrne, Haverford had hoped to buy into Omega at between 70 and 83 pence per share via a so-called Dutch auction, in which each shareholder submits the minimum price they will accept.

Haverford said it had sought further details from Omega after its November 18 results, as it tried to understand the reasons for, and consequences of, the very significant and unexpected deterioration in Omega's financial position and prospects.

Haverford said it had indicated to Omega on November 29 that it would be willing to make a new offer at a fixed price of 74 pence per share, and was ready to enter discussions. It said a further announcement would be made before 0800 GMT on Friday.

Shares in Omega were down 4.1 percent at 65 pence by 0824 GMT on Thursday.

(Reporting by Paul Hoskins; Editing by David Hulmes)