Opinion ID: 1934995
Heading Depth: 1
Heading Rank: 5

Heading: American General's Offer

Text: In January 1994, James Tuerff (Tuerff), the President of American General, met with Richard Vie, Unitrin's Chief Executive Officer. Tuerff advised Vie that American General was considering acquiring other companies. Unitrin was apparently at or near the top of its list. Tuerff did not mention any terms for a potential acquisition of Unitrin. Vie replied that Unitrin had excellent prospects as an independent company and had never considered a merger. Vie indicated to Tuerff that Unitrin was not for sale. According to Vie, he reported his conversation with Tuerff at the next meeting of the Unitrin Board in February 1994. The minutes of the full Board meeting do not reflect a discussion of Tuerff's proposition. Nevertheless, the parties agree that the Board's position in February was that Unitrin was not for sale. It was unnecessary to respond to American General because no offer had been made. On July 12, 1994, American General sent a letter to Vie proposing a consensual merger transaction in which it would purchase all of Unitrin's 51.8 million outstanding shares of common stock for $50-3/8 per share, in cash (the Offer). The Offer was conditioned on the development of a merger agreement and regulatory approval. The Offer price represented a 30% premium over the market price of Unitrin's shares. In the Offer, American General stated that it would consider offering a higher price if Unitrin could demonstrate additional value. American General also offered to consider tax-free [a]lternatives to an all cash transaction.