* Had made up to 350 pence/share approach for Hardy
* Hardy shares down 4.6 percent, Beazley up 1.5 percent
(Updates share price, adds analyst, Beazley CEO comment)
By Sudip Kar-Gupta
LONDON, Dec 14 (Reuters) - Lloyd's of London insurer Beazley dropped a proposed 180 million pound ($286 million) offer for rival Hardy Underwriting after failing to win an agreed deal and said it might now return cash to investors.
In a brief statement on Tuesday, Beazley said it had submitted a final offer of up to 350 pence per share for Hardy but the target company had responded by saying it would only consider an offer substantially above this level.
Beazley said it would now look at other growth strategies.
"We will continue to look at ways to grow in the United States, at Lloyd's of London and in Europe," Chief Executive Andrew Horton told Reuters.
"If we can find bolt-on acquisitions in any of those areas, then we'd be interested ... If we end up with surplus capital, I am sure we will look at ways of handing back cash to shareholders."
The withdrawal is no shock given Beazley had said on Nov. 15 it might pull the bid after its terms -- already increased to 330p per share from an initial 300p -- were rejected by Hardy.
Hardy shares were down 4.6 percent at 269 pence by 0900 GMT, above a day's low at 250 pence. Beazley stock edged up 1.3 percent to 115.3 pence.
Brokerage Execution Noble said Hardy's management would remain under scrutiny despite Beazley's withdrawal.
"In the near to medium term, we expect management will come under pressure to deliver quickly on their growth strategy given that Beazley's final offer comes in at around 1.25 times 2010 estimated tangible book value," Execution analysts said in a research note.
Lloyd's of London insurers have been at the centre of takeover speculation as an unpromising trading environment has weighed on their share prices, opening up potentially attractive acquisition opportunities.
In October, Brit Insurance agreed to be taken over by buyout firms Apollo Management and CVC Capital Partners after a four-month takeover battle. (Editing by Julie Crust and David Holmes) ($1=.6301 Pound)