Iag Bid Deadline Extended
Sydney Morning Herald
Wednesday April 23, 2008
QBE Insurance is persisting with its merger tilt at its fellow insurer Insurance Australia Group, pushing back the deadline on its proposed scheme of arrangement for another fortnight.
The extension came as IAG, owner of the NRMA Insurance brand, maintained its frosty stance on QBE's offer, which passed an initial deadline of 5pm, Monday. But the decision to set a new deadline of 5pm on Monday, May 5, may indicate QBE's pitch has struck an encouraging chord with IAG's shareholders.IAG has suffered heavy exposure to storm and weather damage along the east coast, while struggling with plans for overseas expansion, making it a target for QBE.QBE's statement to the market yesterday contained little new information about the bid, but reiterated the potential benefits.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 70c for each IAG share, representing about $4.05 a share, or 30c less than yesterday's closing price of $4.35. IAG's response remains cool. The chairman, James Strong, said in a statement that his board would not respond to the proposal, making QBE's new deadline meaningless. "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." QBE has tried to frame the offer as a merger that would catapult the combined group into the top 15 of global general insurers, while IAG has dismissed it as a takeover bid.
© 2008 Sydney Morning Herald
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