MGIC considers calling off Radian deal

By Lisa Kerner

Charlotte, N.C., Aug. 7 - MGIC Investment Corp. notified the New York Insurance Dept. that it does not believe it is obligated to complete the pending merger with Radian Group Inc., citing the impairment announced by joint venture Credit-Based Asset Servicing and Securitization LLC. Radian disagrees, according to a company news release.

The board of directors of MGIC will make the final determination whether or not the company will close the deal. Radian has been asked to provide additional information to enable MGIC management to complete its analysis, which is expected to be finished no earlier than the week of Aug. 13.

Shareholders of MGIC and Radian have approved the transaction, it was previously reported. Under their Feb. 6 agreement, the companies will merge to form a new mortgage and credit risk insurance company called MGIC Radian Financial Group Inc.

The agreement called for each share of Radian common stock to be exchanged for 0.9658 of a share of MGIC common stock based on Feb. 5 closing prices. MGIC (NYSE: MTG) closed at $62.93 on Feb. 5; Radian (NYSE: RDN) closed at $60.84 on Feb. 5.

MGIC Investment is a holding company and a private mortgage insurance provider based in Milwaukee. Radian Group is a credit risk management company based in Philadelphia.

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