Defending its second tender offer for Meridian Insurance Group, American Union Insurance Co. said Tuesday that disclosure laws governing tender offers are not intended to entrench management at the expense of shareholders.
The comments, made before the Indiana Securities Division, came just days after Meridian rejected the Bloomington, Ill.-based American Union’s $75 million tender offer for a 50.1 percent share of Meridian. American Union also countered claims by Meridian and state securities regulators that it failed to make required disclosures to Meridian shareholders. Meridian’s board rejected American Union’s offer last Thursday, citing lack of disclosure and the insolvency last June of Illinois HealthCare, controlled by American Union head Gregory Shepard.
American Union’s offer of $25 a share doesn’t expire until Oct. 20, however, and the company is still hoping Meridian might reconsider. But first, America Union must win the blessings of state securities regulators, who filed two administrative complaints last week against the tender offer.
One alleges Shepard and American Union failed to provide full and fair disclosure to Meridian shareholders. The other alleges failure to file required statements with the Indiana Securities Division during a partial tender offer last year. Indiana Securities Commissioner Bradley Skolnik told KnightRidder new service he will decide on or before Oct. 4. A cease-and-desist order would sink the tender offer.
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