FBL Financial Group, Inc. (NYSE: FFG) (the “Company”)
announces today that it has received a non-binding proposal dated
September 4, 2020 (the “Proposal”) from Farm Bureau Property &
Casualty Insurance Company (“FBPCIC”) to acquire all of the
outstanding shares of Class A common stock and Class B common stock
of the Company that are not currently owned by FBPCIC or the Iowa
Farm Bureau Federation at a purchase price of $47.00 per share in
cash. The Iowa Farm Bureau Federation owns approximately 60% of the
Company’s Class A common stock and approximately 67% of the
Company’s Class B common stock.
The Proposal is subject to certain conditions. A copy of the
Proposal is included as Appendix A to this news release.
The Company cautions its shareholders and others considering
trading in the Company’s securities that the Company only recently
received the Proposal and that the Company’s Board of Directors has
not made any decision with respect to the Company’s response to the
Proposal. There can be no assurance that any agreement with respect
to the proposed transaction will be executed or that this or any
other transaction will be approved or consummated. The Company does
not undertake any obligation to provide any updates with respect to
this or any other transaction, or to provide any additional
disclosures to reflect subsequent events, new information or future
circumstances, except as required under applicable law.
About FBL Financial Group FBL Financial Group is a
holding company with the purpose to protect livelihoods and
futures. Operating under the consumer brand name Farm Bureau
Financial Services, its affiliates offer a broad range of life
insurance, annuity and investment products distributed by multiline
exclusive Farm Bureau agents. Helping complete the financial
services offering, advisors offer wealth management and financial
planning services. In addition, FBL Financial Group manages all
aspects of two Farm Bureau affiliated property-casualty insurance
companies for a management fee. Headquartered in West Des Moines,
Iowa, FBL Financial Group is traded on the New York Stock Exchange
under the symbol FFG. For more information, please visit
www.fblfinancial.com and www.fbfs.com.
Cautionary Note Regarding Forward-Looking Statements This
news release contains, and certain oral statements made by our
representatives from time to time may contain, certain statements
that may be deemed to be “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. Forward-looking
statements, by their nature, are subject to a variety of inherent
risks and uncertainties that could cause actual results to differ
materially from the results projected. Many of these risks and
uncertainties cannot be controlled by the Company and include the
possibility that discussions with FBPCIC may not be successful and
the possibility that the proposed transaction may not be entered
into or completed on the terms described in the Proposal or at all,
including as a result of changes in the business or prospects of
the Company or FBPCIC. When considering forward-looking statements,
you should keep in mind the risk factors and other cautionary
statements set forth in the Company’s Annual Report on Form 10-K
for the year ended December 31, 2019 and subsequent Quarterly
Reports on Form 10-Q and the other reports that the Company files
with the Securities and Exchange Commission from time to time. Any
forward-looking statements herein are made only as of the date of
this news release. Except as required under applicable law, the
Company assumes no obligation to publicly update any
forward-looking statements.
Appendix A
Board of Directors FBL Financial Group, Inc. 5400 University
Avenue West Des Moines, IA 50266 Attn: Paul E. Larson Lead Director
and Vice Chairman of the Board
September 4, 2020
Dear Paul:
Farm Bureau Property & Casualty Insurance Company
(“FBPCIC” or “we” or “us”) is
pleased to submit this proposal to acquire all of the outstanding
shares of Class A common stock and Class B common stock of FBL
Financial Group, Inc. (“FFG”) that are
not currently owned by us or the Iowa Farm Bureau Federation
(“IFBF”) at a purchase price of $47.00
per share in cash. The proposed transaction will not be subject to
a financing condition.
The $47.00 per share price represents a 26.2% premium over the
last closing price of FFG’s Class A common stock, a 25.6% premium
to the stock’s 30-day average price, and a 29.3% premium to the
stock’s 60-day average price. The price offered values FFG at an
approximately 1.06x multiple of FFG’s book value per share,
excluding accumulated other comprehensive income as of June 30,
2020. Based on the proposed price of $47.00 per share of Class A
common stock and Class B common stock and the number of outstanding
FFG shares not owned by FBPCIC or IFBF as of June 30, 2020, the
aggregate cash purchase price payable for FFG’s common stock in the
transaction would be approximately $440 million.
As you know, IFBF owns approximately 60% of the outstanding
shares of Class A common stock and approximately 67% of the
outstanding shares of Class B common stock of FFG. We expect that
the FFG board of directors will appoint a special committee
comprised of non-management directors not affiliated with IFBF or
FBPCIC to consider our proposed transaction and make a
recommendation to the entire FFG board of directors. We further
expect that the special committee will retain its own independent
legal and financial advisors to assist in its review of our
proposed transaction.
We will not move forward with the transaction unless it is
approved by a special committee properly constituted and empowered
as described in the prior paragraph. We will also seek to ensure
that none of FFG’s directors who are directors of IFBF or FBPCIC
participate in the consideration of our proposal, other than as may
be required to approve a transaction already approved by the
special committee. In addition, it is a condition to our offer that
the proposed transaction be subject, in addition to any shareholder
vote required by Iowa law, to a non-waivable condition requiring
approval of a majority of the shares of Class A common stock of FFG
not owned by IFBF, FBPCIC, or their respective directors and
executive officers. Because IFBF owns 100% of the shares of
outstanding Series B preferred stock of FFG, those shares would
also be excluded from this vote.
In order to purchase the publicly-held shares of FFG, we intend
to form a new subsidiary (“Newco”),
and to effectuate a merger of FFG with and into Newco, with Newco
as the surviving entity. The consideration to be paid upon
consummation of the merger would consist of all cash to the public
shareholders. The transaction will be structured such that IFBF
will not receive any cash consideration for its shares of FFG
common stock and will instead receive shares in Newco. Concurrently
with the consummation of the merger transaction, all Class B common
stock and Class A common stock of FFG will be converted into a
single class of common stock in Newco. Following the consummation
of the merger transaction, IFBF’s proportionate ownership of Newco
common stock will be equal to its aggregate percentage ownership of
Class A and Class B common stock of FFG as of immediately prior to
the consummation of the transaction, with FBPCIC owning the
remainder of Newco common stock.
In addition to the transaction conditions described above
intended to safeguard the rights of minority shareholders of FFG,
the proposed transaction will be conditioned upon, among other
things, the negotiation of mutually acceptable transaction
documents and the receipt of required regulatory approvals, which
will include approval of the Iowa Insurance Division for FBPCIC’s
proposed investment in FFG.
IFBF has indicated that it will support the proposed transaction
as described herein, but that it otherwise has no interest in
selling any of the shares of FFG common stock owned by it, nor in
voting any such shares in favor of any alternative sale, merger or
similar transaction involving FFG. Given our longstanding knowledge
of FFG and our familiarity with its operations, we are in a
position to complete the transaction in an expedited manner and to
promptly enter into discussions regarding a merger agreement with
the special committee and its advisors providing for the
acquisition of the publicly-held FFG shares. We intend that,
following completion of the proposed transaction, FFG’s business
will continue to be run in a manner that is generally consistent
with its current operations, while enjoying the operational
benefits and cost savings inherent in FFG no longer being a public
company. We do not currently contemplate making any material
changes in FFG’s strategic or operating philosophy, or to its
business.
We have engaged Goldman Sachs & Co. LLC as our financial
advisor and Skadden, Arps, Slate, Meagher & Flom LLP as our
legal advisor in connection with the proposed transaction. We
intend to issue a press release that includes a copy of this letter
before the market opens tomorrow. A copy of the press release is
attached for your reference.
This indication of interest is non-binding and no agreement,
arrangement or understanding between the parties will be created
until such time as definitive documentation has been executed and
delivered by all appropriate parties and such agreement,
arrangement or understanding has been approved by such parties’
respective boards of directors and the special committee, as
applicable. Any obligation of FBPCIC and IFBF with respect to the
proposed transaction will be only as set forth in a definitive
written agreement. This letter does not constitute an offer or
proposal capable of acceptance and may be withdrawn at any time and
in any manner.
We believe that our proposal represents an attractive
opportunity for FFG’s public shareholders to receive a meaningful
premium to the company’s current and recent share prices, and an
attractive opportunity for FFG to capture meaningful cost savings
through going private. Once the special committee has been formed,
we welcome the opportunity to discuss our proposal with the special
committee and its advisors.
We look forward to your response.
Sincerely,
Farm Bureau Property & Casualty
Insurance Company Board of Directors
cc. Iowa Farm Bureau Federation
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version on businesswire.com: https://www.businesswire.com/news/home/20200904005301/en/
Investor Relations Contact Kathleen Till Stange, Vice
President Corporate & Investor Relations (515) 226-6780,
Kathleen.TillStange@FBLFinancial.com
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