FBPCIC has proposed to acquire the remaining stake in Iowa Farm Bureau Federation (IFBF) that it does not own at a cash consideration of $47 a share
FBPCIC proposes to take full ownership of FBL Financial Group. (Credit: Free-Photos from Pixabay)
Iowa-based life insurance company FBL Financial Group (FFG) has announced that it had received a minority stake buyout proposal from Farm Bureau Property & Casualty Insurance Company (FBPCIC).
FBPCIC has proposed to acquire the remaining stake in Iowa Farm Bureau Federation (IFBF) that it does not own at a cash consideration of $47 a share.
The aggregate cash purchase price payable for FFG’s common stock would be about $440m.
Currently, IFBF owns 60% of FFG’s Class A shares and 67% of Class B common stock. It will remain the majority shareholder of FFG following the completion of the proposed deal.
The proposed transaction is, however, subject to certain conditions.
In a letter dated 4 September to FFG Vice Chairman Paul Larson, the FBPCIC board of directors wrote that the $47 per share price represents a 26.2% premium over the last closing price of FFG’s Class A common stock and a 25.6% premium to the stock’s 30-day average price, as well as a 29.3% premium to the stock’s 60-day average price.
The letter further stated: “We expect that the FFG board of directors will appoint a special committee comprised of non-management directors not affiliated with IFBF or FBPCIC to consider our proposed transaction and make a recommendation to the entire FFG board of directors.
“We further expect that the special committee will retain its own independent legal and financial advisors to assist in its review of our proposed transaction.”
FBPCIC appoints Goldman Sachs as financial advisor
FBPCIC has appointed Goldman Sachs as its financial advisor and Skadden Arps Slate Meagher & Flom LLP as its legal advisor for the transaction.
In June this year, FBAlliance Insurance selected Sapiens CoreSuite for Property & Casualty and its IntelligencePro analytics solutions to accelerate growth and meet the demand for new products. FBAlliance Insurance is owned by nine Farm Bureau insurance companies in the US.