Personal lines auto insurer Bristol West Holdings Inc., Davie, Fla., has agreed to be acquired for $712 million by Farmers Group Inc.
Under the agreement, holders of Bristol common stock will receive $22.50 per share in cash–close to 39 percent above the March 1 closing price of $16.21. Farmers is a wholly-owned subsidiary of Zurich Financial Services Group.
Commenting on the announcement, Jeffrey J. Dailey, chief executive officer and president of Bristol, said the sale is "a way of enhancing Farmers' non-standard auto insurance business through their own highly successful distribution network."
"Adding Bristol's non-standard auto insurance business as an additional product line in the Farmers platform is a great fit and contributes to increase our reach," said Farmers CEO Paul Hopkins.
Bristol will have until March 31 to solicit other possible bidders. Subject to certain conditions, it may respond to unsolicited inquiries by other persons interested in acquiring the company.
Should a superior offer be received and accepted, Bristol may terminate the agreement and pay a fee of $14 million to Farmers. After March 31, the fee is raised to $21 million.
Investment partnerships formed at the direction of Kohlberg Kravis Roberts & Co., which holds more than 42 percent of Bristol, are in favor of the merger.
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