Strong lashes out at QBE ‘shotgun’
IAG Chairman James Strong has defended his board’s decision to reject QBE’s acquisition proposal earlier this year.
He told the group’s AGM last week that QBE did not make a formal or complete offer and declined to put a general takeover offer to IAG shareholders, instead insisting on a unanimous recommendation from IAG’s board.
“It was the board’s view that QBE sought to take advantage of the then current negative insurance cycle in Australia to attempt to acquire IAG at a low price,” he said.
He says while the original $9 billion bid “undervalued” the company, IAG still believes there are substantial benefits from combining the two businesses.
“But unfortunately the whole approach by QBE… they kept putting out press releases saying it was a friendly merger. Well, I would hate to have an unfriendly merger with them.
“It was like being asked to go to a picnic and when you get there, there’s a shotgun in the picnic basket.
“We were asked to have an off-the-record discussion with the view to reaching an agreement. When we said we didn’t think it was a reasonable approach, they decided this confidential meeting be released to the stock exchange.”
Mr Strong says QBE is a very successful company but has a reputation for buying things cheaply.
“And they are pretty tough about how they go about it. Their intention was to get shareholders, particularly institutional shareholders, to put pressure on us to sell.”
A QBE spokesman declined to comment on the issue.
Mr Strong also defended his role at the company but said he will not see out the full three-year term after angry shareholders questioned why he had been re-elected when 18% of investors voted against his reappointment.
He told the group’s AGM last week that QBE did not make a formal or complete offer and declined to put a general takeover offer to IAG shareholders, instead insisting on a unanimous recommendation from IAG’s board.
“It was the board’s view that QBE sought to take advantage of the then current negative insurance cycle in Australia to attempt to acquire IAG at a low price,” he said.
He says while the original $9 billion bid “undervalued” the company, IAG still believes there are substantial benefits from combining the two businesses.
“But unfortunately the whole approach by QBE… they kept putting out press releases saying it was a friendly merger. Well, I would hate to have an unfriendly merger with them.
“It was like being asked to go to a picnic and when you get there, there’s a shotgun in the picnic basket.
“We were asked to have an off-the-record discussion with the view to reaching an agreement. When we said we didn’t think it was a reasonable approach, they decided this confidential meeting be released to the stock exchange.”
Mr Strong says QBE is a very successful company but has a reputation for buying things cheaply.
“And they are pretty tough about how they go about it. Their intention was to get shareholders, particularly institutional shareholders, to put pressure on us to sell.”
A QBE spokesman declined to comment on the issue.
Mr Strong also defended his role at the company but said he will not see out the full three-year term after angry shareholders questioned why he had been re-elected when 18% of investors voted against his reappointment.