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Harleysville Hits the Buyout Lottery — Thursday’s IP Market Recap

Nationwide buyout offer nearly doubles insurer's stock


Amid a slumping quarter for M&A, Thursday saw at least one company reach the buyout promised land. Harleysville Group (NASDAQ:HGIC), a Pennsylvania-based insurer for small- and medium-sized businesses, received a $60-per-share buyout bid from private insurance firm Nationwide Mutual, nearly doubling the value of the stock.

Investors entrenched in HGIC — which had seen its shares drop as much as 31% this year — finally got their payoff in the form of an 85% surge to close at $58.82 on Thursday.

The acquisition came during the worst quarter for global M&A since 2009. According to Wall Street Journal blogger Shira Ovide, the third quarter (through Sept. 23) has seen 9,381 global deals to the tune of about $575 billion, compared with Q3 2010, which saw 10,284 at about $750 billion, respectively. In the U.S. alone, mergers and acquisitions are down 13% for the quarter, making Thursday’s Harleysville deal a bright spot for an otherwise dreary three months for movers and shakers.

Harleysville’s gain came alongside a red-letter day for the entire property and casualty insurance sector, which saw 60 of its 65 components make gains, including respectable finishes for major names like Travelers (NYSE:TRV, +3.16% to $46.19) and Allstate (NYSE:ALL, +4.42% to $24.56).

Suffering the negative side of stock-market karma was Netflix (NASDAQ:NFLX), which dropped almost 11% to $113.29 despite hope that the company’s subscription exodus might finally be slowing. Overshadowing Netflix’s good news with the threat of even more competition was Microsoft’s (NASDAQ:MSFT) reported intention to offer pay TV from Comcast (NASDAQ:CMCSA) and Verizon (NYSE:VZ) through its Xbox Live platform.

Three Up

  • Hartford Financial (NYSE:HIG): Up 8.28% ($1.31) to $17.13.
  • Morgan Stanley (NYSE:MS): Up 6.57% (93 cents) to $15.09.
  • Dr. Pepper Snapple (NYSE:DPS): Up 4.52% ($1.65) to $38.16.

Three Down

  • Youku (NYSE:YOKU): Down 18.26% ($3.63) to $16.25.
  • Wynn Resorts (NASDAQ:WYNN): Down 7.34% ($9.95) to $125.54.
  • Green Mountain Coffee Roasters (NASDAQ:GMCR): Down 7.21% ($7.49) to $96.39.

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