Fidelity shares higher but hard to find

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Fidelity Life's share price has jumped $10 since Farmers Mutual Group (FMG) made a play for a greater share of the company in May, according to one of the insurance firm's largest shareholders.

Thursday, August 16th 2007, 8:44PM

by David Chaplin

Karl Trotter, who through his family trust is among the top five or six Fidelity equity holders, said he recently paid $82 per share for a small tranche of 800 shares, up substantially from the $72 offered by FMG in May.

FMG was aiming to lift its shareholding in Fidelity from 8% it already owned to 10% with its $72 per share offer in May. At the time, however, Trotter put out a counter-offer of $75 per share because he said the FMG price undervalued the company.

"I bought 500 shares at $75 and subsequently FMG has gone as high as $77 to $80," Trotter said. "I think my earlier offer may have assisted shareholders to get a better price." It is understood FMG's share of Fidelity is now only slightly above 8%.

Trotter said the insurer's shares remain tightly held and "it's still difficult to get any".

Meanwhile, FMG is due to hold its AGM on August 28 in Tauranga to approve its first constitution in preparation for expected legislative changes governing the company.

The Farmers' Mutual Group Bill, which will remove the firm from the jurisdiction of the Mutual Insurance Act 1955 and repeal a 1998 law governing its activities, is currently before a select committee in Parliament.

Once the new law is in place FMG says it will be able to offer a "more diverse range of services and... more competitively priced products".

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