The Associated Press
COLUMBUS -- Nationwide Insurance Enterprise, one of the nation's largest home and auto insurers, moved to become a larger player west of the Mississippi with a $1.6 billion hostile takeover bid for Allied Group Inc.
The takeover of Allied Group would clear the way for a related company -- Allied Mutual Insurance Co. -- to merge with Nationwide Mutual Insurance Co., but neither deal is contingent on the other, Nationwide officials said.
Both Columbus-based Nationwide and Allied Mutual, of Des Moines, Iowa, are owned by policyholders.
"We are convinced that there is compelling business logic for this combination that will be beneficial to shareholders, employees, management, agents and policyholders of both organizations," Dimon McPherson, Nationwide chairman and chief executive, wrote in a letter to Allied officials.
Mr. McPherson said he has been trying to negotiate a merger between Nationwide and Allied since January but has been blocked by the Allied Group's board of directors.
Now, Nationwide is taking its case directly to Allied shareholders with a $47-a-share offer that begins Tuesday and lasts until June 16. Allied's stock was up 24 percent, to $34.50, Monday.
Nationwide also has offered to buy Allied Group preferred stock held by Allied Mutual for $65 million, distributed as a dividend to policyholders. And Nationwide, which has about 200 employees at a subsidiary in Des Moines, promised to keep all current Allied employees and to bring 400 more jobs in the next four years.
