Insurer Expects Torchmark to Raise Its Bid

American General Corp. Chairman Harold Hook said Thursday that he expects insurance company Torchmark Corp. to raise its $6.4-billion unsolicited bid for his company.

“We’re probably going to see higher prices as we go along here,” Hook said.

But the chairman said that even at the current level, the half-stock, half-cash offer was probably “a long reach” for the much smaller Torchmark. He also said he does not consider American General “in play” or up for auction.

“I can tell you that we’ve had some free advice from significant numbers of some highly intelligent folks in the financial community who have seriously questioned that (bid),” Hook said.

Torchmark this week made a $50-a-share offer for American General, the nation’s No. 4 publicly traded insurance concern, whose $4.2 billion in annual revenue nearly triple Torchmark’s.

Torchmark has not said how it would finance the $3.2-billion cash portion of the offer.

Indicating that the bid was unwelcome, American General pointed to the lack of financing for the cash portion of the offer. But it said its board will consider the bid at its May 2 annual meeting.

Hook said.

American General once owned 9% of Torchmark’s stock but sold the stake and signed a standstill agreement that forbids it from buying more stock until 1993.

Torchmark turned up the heat in its bid for American General Corp. on Wednesday, offering a surprise slate of nominees for election to American General’s board at its May 2 annual meeting.

American General filed a lawsuit in federal court to fight Torchmark’s move, claiming the slate was nominated in violation of American General’s bylaws.