IAG says it sees benefits in a merger with QBE, but says the previous bid undervalued the company.
Despite having rejected two takeover bids from rival insurer QBE, Insurance Australia Group (IAG) said it sees benefits in a merger of the two companies.
IAG made the statement in an annual review that accompanied the group's 2008 annual report filed on Friday.
"The IAG board acknowledged (and still believes) that substantial benefits could result from combining these businesses and indicated its willingness to explore these," the review said.
"However, the proposed price was too low to adequately reflect the inherent value of IAG's businesses and brands. The board could not recommend this takeover proposal and, as a result, QBE decided to withdraw it."
QBE made an offer for its rival in April this year and then increased its bid a month later. The May offer valued IAG at about A$9 billion.
IAG stated on Friday that it was given little opportunity to review QBE's bid before it was withdrawn.
"The IAG board did not consider it was being offered sufficient transparency or time to properly assess the QBE share value as a basis for recommending such an exchange to IAG shareholders."
IAG says it is now focused on enhancing shareholder value.
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