Penn Millers Holding Corporation (Nasdaq: PMIC) shares vaulted 23.4% as Thursday’s session wound to a close to $20.12, on word of a possible takeover by ACE Ltd. Volume for the stock totaled 581,000 shares, or about 100 times its daily average.
A news release out Sept. 8 revealed that the company, which provides property and casualty insurance through its wholly owned subsidiary, Penn Millers Insurance Company, today announced that it has entered into a definitive agreement on Sept. 7, to be acquired by a subsidiary of ACE Limited for $20.50 per share in cash.
The purchase price represents a premium of 39% over the $14.75 per share closing price of PMIC on August 15, the date of its announcement that it was reviewing strategic alternatives. It also represents approximately 101% of book value (108% of fully diluted book value) of Penn Millers at June 30.
The release quotes Penn Millers CEO Douglas A. Gaudet thus: “This transaction delivers outstanding returns to our shareholders and additional benefits to our policyholders, agents, brokers, and employees. We are excited to join ACE, one of the largest and most respected insurance companies in the world.
Gaudet continued, “We believe ACE’s national platform and product capabilities will provide strong growth opportunities to our well-established agency network. Our state-of-the-art loss control and claim services in agribusiness and other specialty niches will round out ACE’s agricultural insurance capabilities.”
Based in Wilkes-Barre, Pa. Penn Millers Holding Corporation provides property and casualty insurance through its wholly owned subsidiary, Penn Millers Insurance Company.