CNA Financial has signed a merger agreement to acquire all of the outstanding shares of common stock of its member company CNA Surety which are not currently owned by subsidiaries of CNA for $26.55 per share in cash.
CNA said that the $26.55 per share price represents a 38% premium to the closing price of CNA Surety’s common stock on 29 October 2010, and a 21% premium to CNA’s original proposed price of $22 per share.
CNA Financial chairman and CEO Thomas Motamed said this transaction will allow CNA Surety’s minority stockholders to monetize their investment at a substantial premium to their historical stock price.
CNA Surety president and CEO John Welch said when complete, this transaction will provide the company with the benefits of being an integrated part of a larger, diversified commercial lines insurance company.
JP Morgan Securities is acting as financial advisor and Simpson Thacher & Bartlett is acting as legal advisor to CNA in connection with the transaction.
Goldman, Sachs & Co is acting as financial advisor and Latham & Watkins is acting as legal advisor to the Special Committee of the board of CNA Surety in connection with the transaction.
The transaction is subject to approval and is expected to close in the second quarter.