Nationwide Mutual in Hostile Bid for Allied

Nationwide Mutual Insurance Co. said it will begin a $1.5-billion tender offer for Allied Group Inc., offering a 69% premium in a rare hostile takeover in the insurance industry. Columbus, Ohio-based Nationwide, the sixth-largest U.S. property and casualty insurer, said it will offer Allied investors $47 a share. Allied shares soared $14.56 to close at $42.31 on the New York Stock Exchange. Nationwide wants to buy Allied to increase sales through independent agents in the Midwest. Nationwide said it is turning to shareholders of Des Moines-based Allied because it said it has been “consistently frustrated” in contacts with the company. Nationwide plans to pay about $1.52 billion for Allied’s 30.6 million outstanding common shares and 1.77 million shares that could be issued under incentive programs. It also offered $65 million for Allied’s 6.75% preferred stock. Allied responded with a letter to shareholders asking them not to tender their shares before an advisory from Allied’s management, expected by June 1.