Dallas, Texas 07/22/2015 (Financialstrend) – Hartford Financial Services Group Inc (NYSE:HIG) is turning out to be a possible acquisition target for Travelers Companies Inc (NYSE:TRV), which has reiterated plans to pursue growth through acquisitions. ACE Limited (NYSE:ACE) announcing it had reached an agreement to acquire Chubb Corp (NYSE:CB) for $28.3 billion continues to fuel speculation that Hartford could be the next takeover target.
Travelers Companies Inc (NYSE:TRV) has not yet indicated that Hartford is its primary target but is considering making a deal in the debt financing market according to CEO Jay Fisherman. Hartford stock has been on the rise in in the recent days on expectations that the stock could fetch a substantial amount of premium on the ongoing acquisition talks. Other potential bidders for Harford include Allstate and AIG.
Travelers Companies Inc (NYSE:TRV)’s last acquisition came in 2003 when it acquired St Paul Cos for $16 billion. Hartford is likely to entertain bids in the upwards of $60 a share according to analysts at Credit Suisse. However, the acquisition is not expected to match the merger between ACE and Chubb with analysts calling for Travelers to carry out acquisitions with an international focus.
Stock Buyback Impact
The acquisition talk comes on Travelers Companies Inc (NYSE:TRV) posting yet another stellar quarter on the earnings front its net earnings having soared to $812 million up from $683 million posted last year same quarter. The impressive results according to the CEO were driven by a strong underwriting performance across all the business segments.
During the quarter, share buybacks helped boost Travelers Companies Inc (NYSE:TRV) per share earnings the company having bought back $801 million worth of shares. The buyback reduced the company’s outstanding share count by 8.3% compared to the previous year.
The company’s net investment income was a disappointment having dropped to $632 million from highs of $695 million the prior year. The decline was as a result of lower valuation of energy investments.