|
AIG, Cendant square off
|
 |
February 6, 1998: 2:28 p.m. ET
ABI takes no position on Cendant bid; AIG sues to block rival proposal
|
NEW YORK (CNNfn) - American Bankers Insurance Group Inc. said it has completed its review of Cendant Corp.'s $2.7 billion takeover offer but is unable to take a position on the unsolicited bid, the Miami-based company said Friday.
Meanwhile, in the wake of its own attempts to take over the little-known insurance marketer, American International Group Inc. (AIG) has filed a suit against Cendant for allegedly trying to mislead American Bankers' shareholders.
Cendant -- which was formed by the $13-billion merger of CUC International and HFS Inc. -- made its offer Jan. 27, a month after American Bankers agreed to merge with AIG for $2.2 billion. American Bankers had until Feb. 10 to file an official response.
In a statement, American Bankers said its board decided to take no position because it has been unable to assess several aspects of the Cendant offer, "including Cendant's relatively high level of leverage, Cendant's business plans for American Bankers, the synergies Cendant has indicated will be achieved, required capital infusions in American Bankers' operating subsidiaries and others."
American Bankers is proposing to hold hearings with Cendant representatives before Florida regulators to aid in its assessment.
Not viewed as negative
To be sure, the response wasn't taken entirely as a negative by Cendant's camp. "I'd like to view it as a positive. They no longer continue to advocate the other deal," said Steve Wolitzer, investment banker at Lehman Brothers, which is advising Cendant on the deal.
Because the agreement with AIG prohibits American Bankers from discussing other possible offers, the requested hearing represents one of the only forums available for Cendant to present the details of its offer.
"You can say that they didn't ask us, but they are not permitted to ask us," Wolitzer said.
American Bankers also said it has taken action to ensure Cendant's offer won't trigger any anti-takeover provisions of its shareholder rights plan.
Cendant officials have been determined to reach a friendly accord with American Bankers. But representatives had been upset lately by American Bankers' efforts to accelerate the AIG deal.
American Bankers has called special meetings on March 4 and March 6 for shareholders to vote on the AIG bid. The record date for shareholders to vote at the meetings was Jan. 30 -- three days after Cendant unveiled its bid.
Wolitzer contends the record date doesn't provide enough time for Cendant officials to own the stock and vote at the meetings. Typically, it takes at least three days for a transaction to clear an account.
"They are trying to slam this through by having a meeting date as soon as possible. They are having a shareholder meeting way before they are ready to close the deal," Wolitzer said.
Federal suit filed
AIG's lawsuit, filed in U.S. District Court for the Southern District of Florida, alleges Cendant has embarked on "campaign of misinformation by disseminating numerous false and misleading statements to American Bankers' shareholders in violation of federal securities laws."
AIG also argued that Cendant violated federal securities laws by failing to file a registration statement in connection with the shares it needs to issue to finance the deal.
AIG is seeking an order enjoining Cendant from making any comments on its offer until a registration statement is filed with the SEC. It also hopes to dismiss Cendant's lawsuit, which sought to throw out portions of the AIG merger agreement.
-- by staff writer Robert Liu
|
|
|
|
|
 |
|
