Conseco Ends Efforts to Buy Kemper Corp. --- Buyout's Financing Began To Unravel; Big Insurer Still Remains for Sale
Conseco Inc. ended its efforts to acquire Kemper Corp. after the financing for the buyout began to unravel.</br></br>Kemper, a big mutual fund, life insurance and brokerage company, said it is still for sale. But investment bankers say Kemper is now a less attractive property, because of the collapse of Conseco's offer and because higher interest rates have hurt Kemper's earnings prospects.</br></br>Analysts predict that any buyer that surfaces now would bid far less than Conseco's original $67-a-share, $2.7 billion, offer, or its recent proposal to lower its bid to $60 a share, or $2.4 billion.</br></br>"When Conseco does a deal, they are very, very thorough," said Joanne Morrissey, president of Firemark Group, a Parsippany, N.J., insurance-research firm. "This doesn't bode well for Kemper." Conseco and Kemper consented to cancelling the original takeover agreement, a step that frees the two sides from any legal obligations. "It became clear to both parties that the proposed merger, even under Conseco's revised terms, could not be completed," said David Mathis, Kemper chairman. "Our board remains committed to the goal of maximizing value for our stockholders."</br></br>General Electric Capital Corp., which once bid $60 a share for Kemper, is exploring another run at Kemper. But the General Electric Co. unit has yet to notify Kemper of its plans, if any. SunAmerica Inc., a Los Angeles-based insurer, also would be interested at the right price, according to a person close to the company. Dean Witter, Discover & Co. and Chubb Corp. have previously shown various degrees of interest. Yesterday, none of the companies had any comment.