Batus Appeals to Shareholders to Back Bid for Farmers Group

Batus Inc. took its campaign for Farmers Group Inc. to the company’s shareholders Monday, soliciting proxies to support reconsideration of its bid for one of the nation’s largest insurers.

Batus said the non-binding resolution will be introduced at Farmers’ annual stockholders’ meeting May 20 at the company’s Los Angeles headquarters.

On March 10, Farmers’ board unanimously rejected a hostile takeover offer of $63 a share, or $4.4 billion, and called upon its shareholders to do the same. The offer was described as being substantially less than the company is worth.

The board, which has refused to enter into negotiations, also announced that it was exploring a variety of alternatives to the bid by Batus, including restructuring or consolidating with another company.

Farmers said it has had discussions with an unidentified third party about a possible leveraged buyout to counter the offer from Batus, the U.S. subsidiary of British BAT Industries.

Farmers Group shares declined to $62.50, down $1.125, in active over-the-counter trading Monday.

Batus’ latest maneuver “was no surprise,” said Tom Welch, director of corporate investments for Farmers. “We have been expecting it.” He declined further comment.

Batus spokesman Wilson Wyatt Jr. said the company does not intend to oppose or take any position with respect to the election of Farmers’ nominees to the board.