Employers Insurance Group, the Reno-based workers compensation carrier, last week cleared a regulatory hurdle that had stalled its proposed acquisition of a Florida insurer.
And the Reno company apparently got a concession of more than $3 million to smooth any ruffled feathers over the delay.
When Employers in January originally announced its plans to acquire AmCOMP of North Palm Beach, Fla., it said it would pay $12.25 for each AmCOMP share. That priced the deal at about $194 million.
But last week, Employers said it's now planning to pay only $12.15 a share a total of about $182.25 million for AmCOMP's 15 million outstanding shares.
That's a difference of about $11.75 million from the original prices.
Part of the difference about $8.4 million apparently reflects refunds that AmCOMP has been forced to make to its customers by Florida regulators.
The rest of the $3.35 million price cut? Employers isn't talking about its reasons.
Ann Nelson, Employers' vice president of corporate and public affairs, acknowledges that the two companies amended the terms of their deal.
She adds only, "We were pleased with the results as AmCOMP is a terrific strategic fit for our company."
The transaction, which still needs the OK of AmCOMP shareholders, now is scheduled to close in October. Originally, the two companies expected to wrap it up during the second quarter of this year.
But it stalled when the Florida Office of Insurance Regulation began asking whether AmCOMP had generated excess profits in 2003-2006.
AmCOMP has signed a consent agreement with regulators and will send out refund checks.
Douglas Dirks, the president and chief executive officer of Employers, says Florida regulators also have given their blessing so that the transaction can move forward.
About a month ago, he'd raised the possibility that Employers might walk away from the transaction.
"Employers is committed to the acquisition, but we will continue to act in the best long-term interests of the company and our shareholders," he said in early August. Last week, however, Dirks said he is "very pleased" with recent developments.
Employers executives have said the transaction would give the Reno firm a stronger presence in states, particularly in the South and the East, where it currently doesn't write much business.
The company will finance the purchase with a combination of cash reserves and debt.
