QBE walks away from IAG

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Breaking News, 21 May 2008

QBE has withdrawn its bid to merge with IAG following the formal rejection of its latest proposal.

In a statement to the Australian Stock Exchange this morning, QBE virtually slammed the door on any further move on IAG, saying it would now concentrate on acquisitions elsewhere.

Acknowledging that its final proposal was "well short of IAG's expectations", QBE CEO Frank O'Halloran made it clear he has no intention of budging from the group's strict rules on acquisitions.

IAG shares had dropped 33 cents by 11.00 this morning.

The statement made it clear that QBE regards the final proposal it made public on Monday is a "very attractive premium of 22% to the closing price of $3.79 on April 9" - prior to its first discussion with IAG Chairman James Strong.

It says IAG's shareholders would have benefited from substantial earnings from the significant synergies and diversification benefits of the merged group, as well as QBE's higher profitability and strong track record.

Mr O'Halloran says QBE "will now continue to focus on the pipeline of acquisitions" in Europe, the Americas, Asia and Australia that have been accumulating in recent months.

"We will continue to adhere to QBE's strict acquisition criteria which have proven to be beneficial for shareholders over a long period of time," he said.

Earlier story in our Breaking News section.