Deadline Pushed In Qbe's Bid For Iag
The Age
Wednesday April 23, 2008
QBE Insurance is persisting with its merger tilt at fellow insurer Insurance Australia Group, pushing back the deadline on its proposed scheme of arrangement.
The extension came as IAG, the owner of the NRMA Insurance brand, maintained its frosty stance on QBE's offer, which passed by an initial deadline on Monday. But the decision to set a new deadline - 5pm on Monday, May 5 - could indicate QBE's pitch has struck a chord with IAG's shareholders, encouraging it to continue with the offer. QBE's statement to the market yesterday contained little new information about the bid, but reiterated the potential benefits for IAG's shareholders. Goldman Sachs JBWere said the tactic was not surprising, given QBE's "very disciplined" approach to acquisitions, with the Mexican stand-off between the two insurers likely to continue until the offer was raised to at least $5 a share. QBE's offer is 0.142 of its shares and 70? for each IAG share, representing about $4.05 a share, or 30? less than yesterday's closing price of $4.35. IAG's response remains cool. Chairman James Strong said his board would not respond to the takeover proposal. "The board and management are addressing the short-term challenges facing the company, such that it will be well positioned to benefit from the anticipated improvement in the insurance cycle," Mr Strong said. QBE chief executive Frank O'Halloran said QBE would continue to look for other global opportunities, regardless of the IAG outcome.QBE shares fell 21? to $23.60.
© 2008 The Age
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