Kemper board meets to discuss GE bid

March 17, 1994|By New York Times News Service

The board of Kemper Corp. met last night -- a day earlier than planned -- to begin discussions over the merits of a hostile takeover bid by the General Electric Co.

Kemper, the asset management and life insurance company based in Long Grove, Ill., has so far rebuffed a $55-a-share, or $2.2 billion, bid by GE Capital, GE's financial arm, saying it wishes to remain independent.

"We strongly believe that a sale of the company at this time is not in the best interests of our stockholders," David Mathis, Kemper's chairman and chief executive, wrote to GE earlier this month.

But Kemper shareholders, who already have seen their stock soar 46 percent on news of the GE bid this week, fail to see the logic of Kemper's insistence upon independence.

At least five shareholder lawsuits have been filed against Kemper since Tuesday, said Arthur Abbey of Abbey & Ellis, the New York law firm that filed one of the suits against Kemper.

Janice Kalmar, a spokeswomen for Kemper, said the company had not yet seen the lawsuits.

None of Kemper's eight independent directors returned telephone calls yesterday seeking comment on the GE bid.

But a person close to the company said that the board was meeting slightly ahead of schedule because the hostile bid had added unexpected work to the agenda.

Surprisingly, no "white knight" bidders have yet emerged with offers to buy the company, the source said.

Shares of other companies in the asset management business have rallied this week against the backdrop of further merger action in the fund business.

The asset management business began to see sizable mergers in late 1992, when Franklin said it would buy Templeton Funds for $913 million, and American Express said it would sell the Boston Co., a mutual fund record-keeping company, to Mellon Bank Corp. Mellon is now attempting to buy Dreyfus Corp. for $1.85 billion.

Asset management companies "are adding strength to strength," John Keefe, of Keefe Worldwide Information Services, said. "You're seeing industry concentration."

So there is little surprise that all the action has attracted Wall Street's arbitrageurs -- the traders who place bets on merger targets.

"We're very much involved," said George Kellner of Kellner DiLeo & Co., an arbitrage firm.

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