Kemper Corporation Opens Up to Bidding War Following $190 Million Increase in General Electric's Offer

Strategic Insights -

Kemper Corporation, a financial services giant based in Long Grove, Illinois, has formally put itself up for sale, marking a significant shift in its stance on a potential takeover bid from the General Electric Company. The decision follows a $190 million increase in G.E.'s offer, which now stands at $60 a share, valuing the company at nearly $2.4 billion. This move opens the door for a bidding war between G.E. and other potential suitors, including Travelers Inc. and other big financial services companies.

Key Takeaways:

  • Kemper Corporation has put itself up for sale following a $190 million increase in General Electric's offer to $60 a share.
  • The move marks a significant shift in Kemper's stance on a potential takeover bid from G.E.
  • G.E. sees Kemper as a means of increasing its small base in the management of financial assets, with Kemper handling $70 billion in investors' funds.
  • Kemper's board has authorized the company to explore options with multiple interested companies, including Travelers Inc. and other financial services giants.
  • The decision to put the company up for sale averts a showdown between Kemper and G.E. at the company's annual shareholders meeting on Wednesday.
  • Major shareholders feared that turning down G.E.'s offer would send the stock back to the $40 range, whereas accepting the offer would see the stock trading at $57.50 on the New York Stock Exchange.
  • Kemper's $1.7 billion real estate portfolio poses a question mark for prospective acquirers, with about one-third of the real estate located in California.

Statistics:

  • Kemper's stock has risen sharply since G.E.'s offer, closing at $57.50 on the New York Stock Exchange on Friday.
  • Securitization unit business: $70 billion handled by Kemper.

Sources:

  • Reuters news agency
  • The New York Times (article title and author not provided)
  • T. Rowe Price, Robert Gensler, analyst at T. Rowe Price, cited by Reuters news agency
  • Goldman, Sachs & Company, Kemper's investment bankers
  • Lazard Freres & Company, GE's advisers