Kemper aims to thwart buyout offer

May 04, 1994|By Bloomberg Business News

LONG GROVE, Ill. -- Kemper Corp., seeking to thwart General Electric Capital Corp.'s $1.8 billion buyout offer, vowed yesterday to boost its stock price 14 percent in the next twelve months or consider putting itself up for sale.

The insurance, asset management and securities brokerage company, facing an unwanted $55-a-share bid from the General Electric Co. unit, made the proposal in a letter to shareholders from Chairman and Chief Executive David Mathis.

The promise to get its value up to $65 a share is an attempt to buy time for the company and its restructuring plan.

It also ups the ante for GE Capital, which has said it may raise its bid.

4 Kemper shares fell $1.50, to $57.125, yesterday.

Some analysts said Kemper shareholders will support GE Capital's bid next Wednesday at Kemper's annual meeting by voting for a slate of four GE nominees to Kemper's board.

"I'm sure everybody will be happy if GE raises its bid and you get a bird in the hand," said Michael Lewis, a Dean Witter Reynolds Inc. analyst. "Two in the bush is a year down the road."

That said, some big investors said they'll cast their votes in favor of Kemper. "Of the two choices presented to shareholders, it is clear that voting for Kemper management is the superior alternative," said Southeastern Asset Management Inc., a $3.4 billion money manager that owned 8.1 percent of Kemper's shares in March.

Mr. Mathis said Kemper's shares will be worth more a year from now because the company's asset sales and a turnaround in the real estate market are boosting the company's earnings.

Its first-quarter earnings from continuing operations totaled $56.6 million, or $1.43 a share, compared with a loss of $5 million, or 14 cents a share, a year earlier.

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