Fisher Communications’ stock jumped yesterday after Liberty Mutual Group announced a 6.2 billion bucks deal to acquire another insurance company, Safeco Corporation. Fisher owns 2.3 million shares of Safeco and those shares are worth about 50% more now than they were on Tuesday. Liberty Mutual will pay 68.25 per share for Safeco. The parties say the deal is expected to clear regulatory reviews and close by the end of Q3.
Fisher sold 700,000 shares of its Safeco stock in December, about 23% of its stake at the time, using the cash to help pay for its $55 million buy of two TV stations in Bakersfield, CA. The stock sales then averaged $58.05 per share. Safeco’s stock price had fallen since then, making some investors a bit miffed that Fisher had held onto the remaining shares.
Safeco’s stock closed Tuesday at $45.23, before the buyout offer at $68.25 was announced yesterday. That works out to about $157 million for the remaining shares held by Fisher.
RBR/TVBR observation: Fisher had been under pressure for some time from some major shareholders to monetize its Safeco investment, instead of just sitting on a non-core investment – and one that had been sliding in value along with a lot of other stocks in recent months. But patience paid off. The investment will be monetized – and at a premium price.
Fisher had previously sold off most of the non-core assets from its long history that began well before broadcasting existed. It sold the flour mills that had been the source of the original Fisher family fortune and all of the real estate assets not associated with its broadcast operations. It also sold a couple of TV stations that didn’t fit its West Coast footprint and its small market radio group, while adding more TV stations in its home region, including Spanish outlets.
The Safeco investment went back a long way as well, explained by the insurance company being based in Seattle and the Fishers being among the city’s most wealthy and prominent investors. It was a buy and hold investment. Now it’s an investment that is going to pay off handsomely for all Fisher investors, including the Fisher heirs.