MGIC, Radian terminate merger deal in light of market conditions

By Lisa Kerner

Charlotte, N.C., Sept. 5 - MGIC Investment Corp. and Radian Group Inc. announced the termination of their merger agreement, citing current market conditions that "have made combining the companies significantly more challenging."

As a result, all outstanding litigation between the companies will be withdrawn and no payments were made to either company in connection with the termination, a news release stated.

It was previously reported that MGIC had filed suit in a Milwaukee federal court to force Radian to provide the company with information it had requested related to the pending merger and MGIC's analysis of the deal.

MGIC had notified the New York Insurance Department that it did not believe it was obligated to complete the pending merger with Radian, based on the impairment announced by joint venture Credit-Based Asset Servicing and Securitization LLC. Radian disagreed.

Under the Feb. 6, 2007 agreement, MGIC and Radian were to merge, forming a new mortgage and credit risk insurance company called MGIC Radian Financial Group Inc. The transaction had been approved by the shareholders of both companies. 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 is a holding company and a private mortgage insurance provider based in Milwaukee.

Radian is a credit risk management company based in Philadelphia.

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