Trading the news is a technique to trade equities, currencies and other financial instruments on the financial markets. Trading news releases can be a noteworthy tool for financial shareholders. Economic news reports often drive strong short-term moves in the markets, which may create trading opportunities for traders. Declarations about corporate profits, a change in administration, rumors of a merger, are events that can cause a company’s share price to move wildly up or down. Interest rates, unemployment and export rates, or the central bank’s policy shifts, can cause a deep change of an exchange rate.
Shares of Vale SA (ADR) (NYSE:VALE) declined 0.99% to $9.48 on Wednesday, soon after the news that Markel Corporation (MKL) and State National Companies, Inc. (SNC) recently declared that they have reached a definitive agreement under which Markel will acquire all of the outstanding shares of State National common stock for $21.00 per share in cash. The transaction has a total value of about $919 million.
The stock is currently floating in a range of $9.40 – 9.63. The stock is moving on low volume, traded at a volume of 14.64M shares, as compared to its average daily volume of 27.21M shares. The market capitalization for the company is reported at $50.92B.
The agreement, which has been unanimously approved by both companies’ board of directors, represents a 38% premium to State National’s 30-day volume-weighted average stock price as of May 18, 2017, the last trading day before published market speculation regarding a potential sale of State National, and a premium of about 7% to State National’s closing stock price on July 25, 2017.
The transaction brings together two values-driven organizations with a shared commitment to innovation, service, and long-term relationships. State National’s two core businesses, Program Services and Lender Services, are well positioned to capitalize on changing market dynamics and new opportunities. State National is the leading and longest-standing pure-play U.S. insurance fronting business with about $1.3 billion in gross written premium (2016) and more than 60 programs. State National is also the leading collateral protection insurance provider in the U.S.
Richard R. Whitt, Markel’s Co-Chief Executive Officer said, “We are excited to be joining forces with State National — an industry leader with a talented administration team that has delivered exceptional long-term results. In addition, we are impressed by the cultural fit between our two organizations. Plannedally, State National will assist us to leverage our Insurtech and digital distribution programs, diversify our underwriting and fee based portfolios and revenue streams, and add to Markel’s third party capital capabilities. Combining Markel’s financial strength with State National’s unique business model and proven record of success, we are confident that all stakeholders will be well served moving forward.”
Terry Ledbetter, State National’s Chairman and Chief Executive Officer, said, “After careful and thorough analysis of a range of opportunities, our board of directors determined this transaction with Markel to be in the best interest of State National and our shareholders. We believe the transaction appropriately recognizes the value of State National’s business model, recent growth and future market opportunities as a leading specialty provider of property and casualty insurance services operating in two niche markets throughout the United States, and provides our shareholders with an immediate and attractive cash premium for their investment in State National.
“We believe this transaction with Markel is good for our employees and clients, in addition to our shareholders. Markel recognizes our shared commitment to offering unique, high-quality solutions that simplify the complexities of insurance for clients nationwide. We have long respected Markel and are proud to partner with this distinguished company that has a strong reputation and proven track record of success in acquiring and partnering with insurance companies. Markel understands the uniqueness of our business model, and will be a tremendous asset as we, together, build upon our leadership position and specialty insurance service offerings, and continue to implement our planned plan to deliver improved value for our clients. This transaction is all about growth, not cost-cutting, and we believe that State National employees will benefit from being part of a larger, stronger, growth-oriented company with a more diversified platform. Our success is driven by the ongoing efforts of our talented employees and I thank them for their continued hard work and dedication. We look forward to working with Markel to quickly complete the transaction and are committed to ensuring a smooth transition.”
The transaction, which is subject to the approval of a majority of State National shareholders, approvals by relevant state insurance regulators and other customary closing conditions, is predictable to close in the fourth quarter of 2017. The transaction is not subject to any financing condition, and Markel plans to finance the transaction using cash balances on hand. Members of the Ledbetter family have reached a voting agreement with Markel in support of the merger. CF SNC Shareholders LP has reached a separate similar voting agreement with Markel. As a result of these voting agreements, about 37% of State National’s common stock is committed to vote in favor of the transaction.
Upon completion of the transaction, State National will operate as a separate business unit. The administration team, led by Terry Ledbetter, State National’s current Chairman and Chief Executive Officer will remain in place and will continue to be based in Bedford, Texas.
Advisors:
Sidley Austin LLP is serving as legal counsel to Markel. Evercore is serving as exclusive financial advisor to State National and Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal counsel to State National.
New York Community Bancorp, Inc. (NYSE:NYCB) declined -0.39 points or -2.89% at the market, after a multi-bank holding company posted 2Q profit. The company stated second-quarter earnings of $115.3 million. On a per-share basis, the Westbury, New York-based Company said it had net income of 22 cents.
The results exceeded Wall Street expectations. The average estimate of nine analysts surveyed by Zacks Investment Research was for earnings of 19 cents per share. The bank holding company posted revenue of $449.5 million in the period. Its adjusted revenue was $338.2 million, also topping Street forecasts. Five analysts surveyed by Zacks predictable $326.4 million.
The stock opened at $13.17. It reached an intraday trading high of $13.17 and now trading at $12.94. The total volume traded for the day is 2.93M, as compared to its average daily volume of 3.63M shares. The current EPS for the company has been recorded at $0.96 and the beta value recorded by the company stands at 0.59 points.
Leave a Reply