The board of directors of Columbus, Ohio-based insurer State Auto Financial Corp. has recommended that its shareholders reject a cash tender offer from Gregory M. Shepard to acquire 8 million shares at $32 each, but Shepard isn’t giving up.
“Despite the fact that the State Auto Financial Board has rejected our cash tender offer and refuses to negotiate with us, we are committed to this transaction,” Shepard said in a statement. “Our offer permits State Auto Financial shareholders to realize an attractive cash value for their shares today without bearing the risks of the vagaries of the insurance industry.
“We believe State Auto Financial’s board and management team has failed to seize this unique opportunity to maximize value for its shareholders. If State Auto Financial’s Board is willing to work with us to consummate a transaction quickly, we may be prepared to analyze further whether a higher value is warranted.”
The offer of Shepard’s group, the STFC Acquisition Corporation, represents a premium of 67 percent over State Auto’s closing stock price on May 28, 2003, the last trading day before Shepard submitted his first proposal to State Auto Financial Corp. in writing, Shepard said in a statement.
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