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Wednesday, April 23, 2008

‘The Safe’ is Safe (For Now)

posted by on April 23 at 9:54 AM

From the Seattle Times:

Liberty Mutual Group said Wednesday it has agreed to acquire publicly traded Safeco Corp. and take it private in an all-cash, $6.2 billion deal to create the nation’s fifth-largest property and casualty insurer.

Boston-based Liberty Mutual and Seattle-based Safeco said the boards of both companies approved the deal, which is subject to approval by Safeco shareholders as well as regulators.

Liberty Mutual, which is owned by its policyholders, offered $68.25 per share for Safeco, a 51 percent premium to Safeco’s Tuesday closing price of $45.23 per share.

This news prompted a friend to ask whether the Mariners will one day be playing at Liberty Mutual Field. The immediate answer appear to be no:

Monfried said Safeco would retain its 85-year-old brand name and continue selling policies through its national network of agents and brokers.

(Note: I tweaked the post after reading this post at Seattlest.)

RSS icon Comments


Yeah right!
It's all a matter of time till Safeco is consolidated into Liberty Mutual Group.

Posted by Gay Seattle | April 23, 2008 10:04 AM

"Safeco" was always a crappy name.

Liberty Park sounds pretty good.

Posted by max solomon | April 23, 2008 10:10 AM

arbitrage time!

Posted by Bellevue Ave | April 23, 2008 10:15 AM

I don't care, since the old Safeco Tower is being officially rededicated as UW Tower tomorrow at Noon when we take control ...

Even if their old CEO is trying to ruin us.

Posted by Will in Seattle | April 23, 2008 10:20 AM

actually arbitrage would have been better yesterday.

Posted by Bellevue Ave | April 23, 2008 10:22 AM

"Bloomberg News reported that former Safeco CEO Mike McGavick said the sale was "saddening."

"Given my objectives when I went there were to rebuild that great franchise, which clearly we did, and to remain independent, I can say this is personally very saddening," McGavick said during the earnings conference call for XL Capital Ltd, according to Bloomberg."

Mike McGavick and the Board started this process in 2001. This day has been planned for a long time and Paula was simply brought in to finish the deal. The execs are getting great parachutes. The regular workers get to look for work in a recession.

Posted by Golden Parachutes are Beautiful | April 23, 2008 10:41 AM

serious question: how did Mike McGavick "save" safeco? was it by making the same deals that resulted in their current state? or did he save them, and then they ruined it?

Posted by infrequent | April 23, 2008 11:10 AM

So will this be like Seafirst bank where it takes 17 years for the parent corp to finally switch its name? Say goodbye to another corp headquarters Seattle. :(

Posted by Brian in Seattle | April 23, 2008 11:35 AM

Yeah, right. Tell it to Seattle Sonics fans and Bon Marche shoppers.

Posted by RonK, Seattle | April 23, 2008 12:33 PM

@7 - he took a payout before the stock cratered, reducing shareholder wealth by a factor of one-fifth during his tenure, that's how McGavick rules.

Posted by Will in Seattle | April 23, 2008 1:58 PM

I had already started looking forward to calling it the Mute.

Posted by Ramdu | April 23, 2008 2:31 PM

The Mute?

Posted by Will in Seattle | April 23, 2008 2:51 PM

I posted this on the NY Times article as well:
Yeah, those of us escaping Safeco within these past several years saw this coming when Mike McGavick took the reigns as chief and claimed to be turning around the company. While there he professed the utmost dedication to Safeco constantly (and irately at times) defending his dedication and not as a prepatory step to run for political office. Of course, when it was safe to do so, he jumped ship, with a HUGE golden parachute and many laid-off employees in his wake. Then ran for office (and lost!) The last step was selling off the U-District building so as to not be tied to that highly visible piece of property. When Safeco moved downtown, we knew for sure a sale of the company was in the works. McGavick’s republican wet dream come true: Increase CEO wages and bonuses, reduce jobs and salaries for workers, and sell the company.
Republicans are hard at work these days making the rich, richer and the poor, poorer. Safeco is just another sad example. McGavick sad about it all? Puh-lease! Sad probably because he didn't get to do it himself while he was CEO.

Posted by David | April 23, 2008 4:01 PM

Liberty Mutual is interested in promoting the Safeco brand. The portion of LM that is purchasing Safeco is the Regional Agency Market. They develop "local" brand names and sell products under those named lines. IE Ohio Casualty, North Pacific, Golden Eagle, etc. Purchasing Safeco gives Liberty Mutual the last piece...the Northwest.

Though I do agree with Max...Liberty Stadium has a ring.....think Boston has it covered somewhere.........What do I know?...I'm from Oregon.....but LOVE Safeco Field.

Posted by lioregon | April 23, 2008 5:59 PM

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