QBE has signalled the seriousness of its bid for Insurance Australia Group (IAG) today by confirming that it has sweetened the terms of its merger proposal.
QBE informed the Australian Securities Exchange today that it had approached IAG last Friday with an increased final proposal on price of 0.145 QBE shares and 90 cents cash for each IAG share.
It said this was equivalent to a consideration of $8.7 billion or $4.60 per IAG share based on QBE’s closing price on May 16.
Commenting on the increased offer, QBE chief executive Frank O’Halloran said his company regarded it as very fair.
“QBE considers its final proposal is very fair and reasonable given IAG’s declining profitability in the past three years and the recent profit downgrade,” he said. “The recent rise in QBE’s share price means that our final proposal still meets QBE’s acquisition criteria, including earnings per share accretive in year one.”
