Australia's QBE lifts bid for IAG
Australian-listed global insurance group QBE Insurance said Monday it had lifted its offer for the nation's second-largest general insurer, Insurance Australia Group (IAG), and declared the offer final.
By Agencies |
SYDNEY: Australian-listed global insurance group QBE Insurance said Monday it had lifted its offer for the nation's second-largest general insurer, Insurance Australia Group (IAG), and declared the offer final.
QBE said it will now offer 0.145 of its shares plus 0.90 Australian dollars cash for each IAG share, valuing the target company at about 8.7 billion dollars (8.3 billion US dollars) or 4.60 a share, based on QBE's closing price on Friday of 25.55.
The group had previously offered 0.142 of its shares and 0.70 dollars cash for each IAG share, valuing IAG at about eight billion.
"QBE considers its final proposal very fair and reasonable given IAG's declining profitability in the past three years and recent profit downgrade," QBE chief executive Frank O'Halloran said in a statement.
The fresh offer represents a 24 per cent premium to IAG's one-month and three-month volume weighted average price before QBE first announced its bid on April 10.
QBE said IAG chairman James Strong had indicated during weekend discussions that he believes the new offer is well short of the IAG board's expectations.
The insurer said it is now waiting for a formal notification from IAG on its takeover proposal following IAG's board meeting in New Zealand on Tuesday.
QBE had sought the backing of IAG's board before proceeding with its offer.
IAG has not challenged QBE's assertion that the two companies would make a good fit but has said the offer undervalues the company despite its recent poor performance.
IAG's earnings have been affected by a series of devastating storms in Australia, a weak performance from its recently acquired UK division and a "soft" commercial insurance cycle in Australia.
QBE said it will now offer 0.145 of its shares plus 0.90 Australian dollars cash for each IAG share, valuing the target company at about 8.7 billion dollars (8.3 billion US dollars) or 4.60 a share, based on QBE's closing price on Friday of 25.55.
The group had previously offered 0.142 of its shares and 0.70 dollars cash for each IAG share, valuing IAG at about eight billion.
"QBE considers its final proposal very fair and reasonable given IAG's declining profitability in the past three years and recent profit downgrade," QBE chief executive Frank O'Halloran said in a statement.
The fresh offer represents a 24 per cent premium to IAG's one-month and three-month volume weighted average price before QBE first announced its bid on April 10.
QBE said IAG chairman James Strong had indicated during weekend discussions that he believes the new offer is well short of the IAG board's expectations.
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The insurer said it is now waiting for a formal notification from IAG on its takeover proposal following IAG's board meeting in New Zealand on Tuesday.
QBE had sought the backing of IAG's board before proceeding with its offer.
IAG has not challenged QBE's assertion that the two companies would make a good fit but has said the offer undervalues the company despite its recent poor performance.
IAG's earnings have been affected by a series of devastating storms in Australia, a weak performance from its recently acquired UK division and a "soft" commercial insurance cycle in Australia.
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