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Progressive asks shareholders to reject 'mini-tender' offer

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April 28, 2008

MAYFIELD VILLAGE, Ohio—Auto insurer Progressive Corp. on Monday asked shareholders to reject a "mini-tender" offer by investment firm TRC Capital Corp. that it believes undervalues shares.

Progressive said TRC made an unsolicited offer to buy up to 5 million shares at $16.60 per share on April 16. The price is 4 percent lower than the Progressive's closing price of $17.37 the day before the offer.

The Securities and Exchange Commission has warned against mini-tenders because they are not subject to the same disclosure and other protections larger tender offers provide. Investors have been caught off-guard by mini-tenders because they assume the price includes premiums typically offered by larger offers but sometimes don't, the SEC said.

In January, TRC made a similar offer to Marathon Oil Corp. shareholders and has previously targeted other companies, such as Schlumberger Ltd., Pfizer Inc. and Kraft Foods Inc.

Progressive said that shareholders that have already tendered their shares may withdraw their shares by the offer's expiration date of May 15.

Progressive shares rose 2 cents to $18.66 in midday trading.

© Copyright 2008 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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