On Friday Minneapolis-based life Insurer ReliaStar confirmed that it was holding talks preliminary to a possible acquisition of the company, but declined to give further details. It was widely reported, however, that Reliastar is in negotiations with ING Group, the Dutch financial services giant. Although company officials declined to make any comment on the rumors, ING has frequently said it was looking for a major U.S. acquisition.
If the reports are correct, ING is prepared to pay $55 per share, which would value ReliaStar at close to $5 billion, and represents a substantial premium over the company’s recent market value of $2.8 billion. ReliaStar shares rose to $44 on the news, up almost 40 percent over the previous close.
ING has been having some difficulty in expanding lately. Its $10 billion bid for Aetna was rejected last March, and is apparently not being pursued. Earlier this month ING gave up its efforts to acquire French Bank CCF, and agreed to sell its 19.05 percent stake to Hong Kong and Shanghai Bank, as part of its acquisition of CCF.It reportedly made a profit of $820 million, however.
Earlier this month ING management reiterated its firm intention to become a major force in the U.S. ING’s CFO Cees Maas, in a meeting with analysts, as reported by Reuters, pointed out that the company had almost 15 billion Euros (currently about $13.5 billion) in excess capital. “How are we going to spend [our excess capital]? Our first priority was, and is, to do a major acquisition in the United States…we still need to buy something.” Looks like the “something” is ReliaStar.
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