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Nationwide Mutual Makes Offer For Public Affiliate

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Nationwide Mutual Insurance Company, Columbus, Ohio, a multiline insurer, announced an offer to reacquire all of the stock of a financial services affiliate that has been publicly traded since March 1997.

Nationwide Mutual has sent shareholders of the affiliate, Nationwide Financial Services Inc., Columbus, an offer to buy their stock for about $2.2 billion cash, or $47.20 per Class A common share.

The price is about 16% higher than the March 4 closing price, Nationwide Mutual says.

Nationwide Mutual and its affiliates now own 66% of the equity and 95% of the voting power of Nationwide Financial, Nationwide Mutual estimates.

The offer “provides the public stockholders of NFS with immediate liquidity and certain value in an uncertain market,” Fred Finney, a Nationwide Mutual board member, writes in a letter filed with the Securities and Exchange Commission.

Nationwide Mutual and Nationwide Financial should work better together if they are back under common ownership, he says.

Nationwide Mutual wants to acquire Nationwide Financial by merging the latter into a newly created corporation. Once the deal is completed, Nationwide Financial common stock would no longer trade on the New York Stock Exchange, Finney writes.

Nationwide Financial has formed a special committee to evaluate the proposal, and Nationwide Mutual says it expected the formation of the committee, Finney writes.

The deal still must be approved by the special committee and the boards of Nationwide Mutual and two Nationwide Mutual affiliates, Nationwide Mutual Fire Insurance Company and Nationwide Corp., also must approve the deal, Finney writes.

Finney notes that Nationwide Mutual reserves the right to walk away from the deal until the companies approve a definitive merger agreement.


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