Merger Talks Between Batus and Farmers ‘Progressing’

Merger talks are “progressing satisfactorily” between Batus Inc. and Farmers Group, the Los Angeles-based insurance holding company, the two companies said in a brief joint statement released Monday at Batus headquarters in Louisville, Ky.

Batus had set a deadline of last Friday for striking a deal to buy Farmers for $72 a share, or $5 billion, but let the deadline pass without comment. Talks continued through the weekend, and Batus, the U.S. subsidiary of giant BAT Industries of Britain, set a new deadline of 4 p.m. PDT Wednesday to reach a definitive agreement.

Farmers has refused to discuss an earlier offer, first made in March and still before shareholders, under which Batus would pay $63 a share. But Farmers directors authorized talks starting last Wednesday after Batus made a new offer of $72 a share.

Farmers stock closed Monday at $67.25, up 37.5 cents, with 1.8 million shares changing hands. It was the second most active issue on the over-the-counter market.

Aside from Monday’s joint statement, which for the first time described the talks as “merger negotiations,” both sides otherwise stuck to their agreement to make no comment on the meetings.

The statement included a brief warning that while talks continue, “no assurances can be given that an agreement will be reached.”