Cendant raises bid for American Bankers Move seeks to top rival bidder AIG

Credit services

March 17, 1998|By BLOOMBERG NEWS

STAMFORD, Conn. -- Cendant Corp. yesterday boosted its offer for American Bankers Insurance Group Inc. 16 percent to $3.1 billion in an attempt to wrest the credit insurer from rival bidder American International Group Inc.

The move is the latest salvo in a battle pitting Cendant President and Chief Executive Henry Silverman against AIG Chairman Maurice Greenberg.

Cendant wants Miami-based American Bankers' credit insurance products to add to a panoply of services and goods such as lodging, car rental and real estate brokerage it markets directly to consumers. American Bankers favors merging with AIG, the biggest U.S. financial company in terms of market value.

Silverman is a "titan deal-maker and marketing guy," and Greenberg is "a titan of the financial services industry," said Gloria Vogel, an analyst at Advest Inc.

They're also offering huge prices for American Bankers, an insurer that pays consumers' credit card and other bills in the event of death, disability or unemployment.

"It's an amazing price," and perhaps high enough to keep AIG from countering, said Steven Schwartz, an analyst at ABN Amro Inc. in Chicago. "What is attractive to Cendant is the ability to sell this product" through its existing marketing channels.

Cendant increased its offer to purchase 23.5 million shares of American Bankers for $67 a share in cash, and the remaining 18 million shares for $67 a share in Cendant. The offer, up from $58 a share, expires at midnight in New York on March 27.

American Bankers has already agreed to sell to AIG, which raised its bid to $58 a share in cash and stock, or $2.7 billion, to match Cendant two weeks ago. AIG is offering to pay cash for 51 percent of American Bankers' stock and the rest in AIG stock.

American Bankers rose $3.75 to $65.75. Cendant fell .1875 cents to $40.625. AIG rose $2.9375 to $127.125.

American Bankers' board will meet today to review the new Cendant bid, a company spokesman said. Shareholders of American Bankers are slated to vote on the agreement with AIG next week. Florida's insurance regulator has scheduled hearings the competing purchase plans this week.

American Bankers' management has favored AIG's offer because of the company's international connections. Founded almost 80 years ago in Shanghai, AIG does business in more than 100 countries.

Pub Date: 3/17/98

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