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Meridian Insurance Group will be purchased by State Auto Financial Corp. of Columbus, Ohio. The company will pay $30 a share, or more than $228 million, to buy the large Indiana insurer.
The deal, announced late Wednesday, brings to an end the bitter takeover battle by Gregory Shepard. State Auto plans to maintain Meridian’s offices, which house 500 employees.
There is little overlap in the companies’ product lines in Indiana. State Auto will maintain the Meridian name, and Meridian Security Insurance Co., Meridian’s largest insurance arm, will continue to be an Indiana-domiciled insurer. The deal is awaiting regulatory and shareholder approval. State Auto was rumored to be a contender after Meridian rejected Shepard’s takeover offer. Shepard, Meridian’s second-largest shareholder, launched the offer in August. After Meridian rejected Shepard’s $20-per-share offer, he came back with an offer of $25 a share for a 50.1 percent stake in Meridian.
“I have long believed that Meridian’s stock is tremendously undervalued,” Shepard said Wednesday after the deal was announced. “I was glad that Meridian’s Board expressed a willingness to consider options for enhancing shareholder value. I am reviewing the details of the proposed transaction between Meridian and State Auto. Until I have carefully reviewed the terms, I will not be in a position to say whether the proposed transaction is the best option for increasing shareholder value or whether it fully reflects the value of the company.”
Analysts have long said Shepard had everything to gain by making a takeover offer for Meridian because it drove up the value of the company’s stock.