CNA Surety Corp. said Friday that it has rejected a $375 million buyout offer by its majority owner, CNA Financial Corp. A special committee of CNA Surety’s board said the $22-per-share bid by CNA Financial Corp. “substantially undervalues” the company, but the committee said it was open to more discussions with CNA Financial.
On Nov. 1, CNA Financial proposed buying the 38 percent of CNA Surety it doesn’t own. The price represented a 14-percent premium over CNA Surety’s closing price of $19.25 on the previous trading day.
CNA Financial, a Chicago-based commercial insurer, is focusing its growth on its specialty franchise.
CNA Surety, which provides surety bonds, also reported Friday that its fourth-quarter earnings rose 10.5 percent to $54.5 million, of $1.21 a share, from $49.3 million, of $1.11 a share, in the same period a year earlier.
“The company’s recent results demonstrate the continuing strength of CNA Surety’s business,” said Philip Britt, chairman of the special committee. “The special committee is confident that the company’s prospects and opportunities and excellent capital position will allow the company to deliver additional value to our shareholders, whether through a transaction with CNA Financial or as an on-going public company. In addition, we look forward to CNA Surety maintaining its productive relationship with CNA Financial, regardless of its ownership structure.”
asachdev@tribune.com
