Why National General Holdings Stock Just Popped 65%
Shares of property and casualty insurer National General Holdings Corp. (NASDAQ: NGHC) are surging in early afternoon trading Wednesday, up 64.8% as of 1:35 p.m. EDT after insurance giant Allstate (NYSE: ALL) announced yesterday that it will purchase National General.
In its press release, Allstate stated that it will spend $4 billion to acquire all shares outstanding of National General, paying $32 per share, cash, as the purchase price, plus payment of National General's final dividend as an independent company -- $2.50, cash. Allstate CEO Tom Wilson noted that "acquiring National General accelerates Allstate's strategy to increase market share in personal property-liability and significantly expands our independent agent distribution," adding that "the acquisition increases personal lines premiums by $4.0 billion and market share by over 1 percentage point to 10%."
Allstate anticipates that "the transaction will be accretive to adjusted net income earnings per share and return on equity beginning in the first year."
Source Fool.com
