State Auto Financial Corp.’s largest individual shareholder boosted his takeover offer for the property and casualty insurer to about $316 million, but the firm’s majority owner gave the offer a frosty response.
Greg Shepard, who owns about 5 percent of State Auto’s shares, offered to pay $29 for each of the company’s 10.9 million shares, up from his offer last month of $27.50 per share. He also said he would exchange his 2 million common shares for $58 million of Class B preferred stock.
Shepard said his proposal is conditioned on his nominees representing a majority of the boards of State Auto, State Automobile Mutual — which owns about two-thirds of State Auto’s shares — and other affiliates and subsidiaries.
In a letter to Shepard, Robert Moone, chief executive of State Automobile Mutual, said Shepard’s plan was to take over State Auto using the firm’s own assets.
“Although in my view your plan continues to suffer from substantially the same defects noted in my last letter, we have forwarded your communications to the State Auto Mutual Special Committee for consideration as part of its continuing process,” said Moone’s letter, a copy of which was filed with the Securities and Exchange Commission.
State Auto shares rose 74 cents, or 3.4 percent, to close at $22.56 on Nasdaq.
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