FBL Financial and Its Sister Win Over Deal Critic

Farm Bureau Property & Casualty Insurance Company may have moved a step closer to helping a sister company, FBL Financial Group Inc., go private.

Farm Bureau P&C announced Monday that it has agreed to increase its offer for outside investors’ shares of FBL Financial stock to $61 each, from $56. The move increases the total deal value by $47 million, to $575 million.

Capital Returns Management LLC, a company that had opposed the deal, has accepted the new price and agreed to vote its shares in favor of the purchase. Ronald Bobman, Capital Returns’ president, signed a cooperation and support agreement, according to a proxy statement amendment filed with the SEC.

The History

Farm Bureau P&C and FBL Financial are both controlled by the West Des Moines, Iowa-based Iowa Farm Bureau Federation.

The federation turned FBL Financial into public company in 1999, by selling a minority stake in the company to the public through an initial public offering.

FBL Financial managers now say that low interest rates, new accounting rules and its relatively small size make moving forward as an independent public company too expensive and too difficult.

The company told investors in September 2020 that it would go private by accepting an offer from Farm Bureau P&C, which originally offered $47 per share for FBL Financial. In January, the companies increased the price to $56 per share.

In related news, FBL Financial said Monday that higher investment yields and an increase in average invested assets helped its earnings in the first quarter. The company is reporting $28 million for the first quarter on $191 million in revenue, compared with a $2.5 million net loss on $135 million in revenue for the first quarter of 2020.

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