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September 01, 2021 at 11:56 AM
What You Need to Know
- Geneve Holdings, owned by the Netter family, has controlled IHC for decades and wants to take it private.
- The Geneve offer implies that IHC has a market cap of about $730 million.
- Analysts state low interest rates and new accounting rules are reasons for the trend to take companies private.
Geneve Holdings — the family-owned company that controls 62.5% of the common stock of Independence Holding Company — wants to take IHC private.
Geneve has made IHC a non-binding offer to acquire all other investors’ IHC shares for $50 each. IHC share prices have been between $38 to $45 for most of the year.
A $50 stock sale price would give the company a market capitalization level, or total stock value, of about $730 million, according to Nasdaq.
IHC is a Stamford, Connecticut-based company that has controlled insurance companies that wrote pet insurance, medical stop-loss insurance and supplemental health insurance products.
In recent years, IHC has shifted to a focus on selling Medicare plans and individual major medical insurance policies written by other companies, rather than on writing and selling its own insurance products.
Deal Details
The IHC board has formed a special committee of independent directors to consider the proposal from Geneve Holdings and to seek and evaluate proposals for alternative transactions, IHC said Monday.
IHC and Geneve Holdings did not give a deal completion date estimate. They noted that the deal is subject to approval by the special committee and by IHC shareholders other than Geneve Holdings.
The IHC-Geneve Holdings deal also depends on the completion of the pending sale of two IHC insurance company subsidiaries, Independence American Holdings Corp. and Standard Security Life Insurance Company of New York.
Geneve Holdings said it intends to keep IHC, not sell IHC to another entity.
IHC and the Netter Family
IHC was started in 1980. Edward Netter, an investment banker with a firm that eventually became part of Lehman Brothers, founded Geneve Holdings in 1987.
He and his family used Geneve Holdings as a vehicle for acquiring IHC and other companies, and IHC itself became a vehicle for acquiring insurance companies. Some of the current and former insurance company subsidiaries were organized before 1900.
