General Electric's Revised Offer for Kemper Corporation Creates Limited Competition

Strategic Insights -

General Electric's finance subsidiary, GE Capital Corporation, has increased its cash bid for Kemper Corporation to $60 a share, or about $1.99 billion, from its previous offer of $55 a share. This significant increase has put Kemper on the auction block, but analysts suggest that it is unlikely to attract any new bidders. As a result, General Electric's revised offer for Kemper may go through with limited competition.

Key Takeaways:

  • General Electric's finance subsidiary, GE Capital Corporation, increased its cash bid for Kemper Corporation to $60 a share, or about $1.99 billion.
  • Kemper responded by putting itself on the auction block, but analysts believe that no other bidder may surface.
  • Selling pieces of Kemper, a life insurance, money management, and brokerage firm, could yield more for shareholders than selling it intact.
  • Companies such as Travelers Inc., the American Insurance Group, and the German insurer Allianz A.G. have been mentioned as potential buyers of Kemper, but their interest is uncertain.
  • Michael Lewis, a Dean Witter analyst, believes that GE Capital might slightly increase its offer for Kemper to get the deal done.
  • Kemper's shares gained $1.625 to close at $59.125 in heavy trading on the New York Stock Exchange.
  • General Electric's shares fell $1.75 to $94.875 as a result of the increased bid.

Statistics:

  • GE Capital's revised offer for Kemper Corporation is $60 a share, which is a $5 increase from its previous offer of $55 a share.
  • The total value of GE Capital's offer for Kemper is approximately $1.99 billion.
  • Kemper's shares gained $1.625 in a single trading day, representing a 2.74% increase.
  • Ge Capital's shares fell $1.75, or 1.87%, to $94.875.

Sources:

  • "General Electric's Revised Offer for Kemper Corporation Creates Limited Competition" (quote and analysis by Ira Zuckerman, SBS Financial Group analyst)
  • Bloomberg News (quote and information on Kemper's shares and General Electric's shares)
  • Dean Witter (quote by Michael Lewis, Dean Witter analyst)
  • Wall Street Journal (information on Travelers Inc., American Insurance Group, and Allianz A.G.)
  • New York Stock Exchange (data on Kemper's shares and General Electric's shares)