Why National Interstate Corporation Shares Skyrocketed
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of National Interstate , a specialty property and casualty insurer in the U.S. and Cayman Islands, soared as much as 32% after receiving a tender offer from American Financial Group subsidiary Great American Insurance Company.
So what: According to the press release from American Financial Group, its subsidiary has offered to purchase National Interstate for $28 in cash per share, without interest, representing a 26% premium above yesterday's closing price. The tender offer is set to expire on March 6, unless the offer is extended beyond that date or terminated early. National Interstate has not made any comments as of yet as to its take on the tender offer.
Now what: Just the simple fact that shares are currently trading at approximately $1 per share above the offer price is an indication from investors that they expect either a competing bid to emerge or for American Financial Group to raise its price. Playing the tender offer game certainly isn't something I recommend, because there's no guarantee a competing bid will emerge or, in this case, that American Financial Group's subsidiary will even keep its bid on the table. Following three hefty quarterly EPS misses in a row, I believe National Interstate shareholders should be fairly content with this offer.
National Interstate may be soaring today, but it may be hard-pressed to outdo this year's top stock pick
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.
The article Why National Interstate Corporation Shares Skyrocketed originally appeared on Fool.com.Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.