Yesterday, medical professional liability insurer American Physicians Service Group Inc. (AMPH) agreed to be acquired by ProAssurance Corporation (PRA). Per the agreement, the shareholders of American Physicians will receive $32.50 per share in cash from the acquirer and the transaction is expected to close in the fourth quarter of 2010. Excluding one-time transaction and restructuring costs, ProAssurance expects the transaction to be accretive to its 2011 earnings.
American Physicians believes that ProAssurance will offer superior quality insurance protection for the policyholders as well as integrate its employees. The company also believes that its shareholders, who remained insulated even during the economic turmoil, will also stand to benefit from the merger. The share price of American Physicians leapt approximately 23.4% on Tuesday to close at $32.43 following the announcement of the acquisition.
American Physicians ended the second quarter with solid results aided by a decline in total expenses, strong policyholder retention and a decrease in pending claims.
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