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Great American Insurance landed National Interstate deal after raising offer twice

Great AmericanInsurance Co. increased its offer twice before National Interstate Corp. to be completely by the company.

Great American Insurance currently owns approximately 51.2%of National Interstate common shares. National Interstate has been a unit ofGreat American Insurance since American Financial Group Inc., Great AmericanInsurance's parent, initially invested in it in 1990.

In February 2014, Great American Insurance commenced atender offer toacquire all of the outstanding common shares it did not currently own for$30.00 per share, in cash. However, Great American Insurance later withdrew andterminated the tender offer following a preliminary enjoining the consummation ofthe tender offer. In April 2014, a settlement on the case was reached and thedismissal of the claims was filed.

In March, American Financial Group directors approved aproposal for Great American Insurance to acquire all of National Interstatecommon shares it did not currently own for $30.00 per share in cash. Followingnegotiations, a draft merger agreement was executed on May 20.

After several discussions, American Financial Group on June27 increased the price for the merger to $30.75 per share, an offer that wasunanimously rejected by National Interstate's board. On July 6, AmericanFinancial Group further increased the offer price to $32.00 per share.

National Interstate's special committee on July 20 indicatedthey would likely unanimously support a transaction that included mergerconsideration of $32.50 per share in cash. American Financial Group counteredit could consider permitting Great American Insurance to pay a special dividendof 50 cents per share to shareholders upon the deal's closing if the specialcommittee was prepared to unanimously approve the merger at the current offerprice of $32.00 per share.

The parties later agreed on such arrangement and announcedthe deal on July 25.