NEW YORK (TheStreet) -- Shares of StanCorp Financial Group Inc (SFG) were rallying, sharply up 48.13% to $113.60 on very heavy volume in afternoon trading Friday, after Japanese insurer Meiji Yasuda Life Insurance Co offered $5 billion to buy the insurer.
Meiji will pay $115 per share in cash, which represents a 50% premium to the StanCorp's closing price from Thursday.
The combined company will have total assets of $327 billion.
Meiji Yasuda Life Insurance, Japan's third-largest life insurer by premium, said the addition of StanCorp would lead to a substantial cash premium to shareholders.
Meiji Yasuda is expected to close the takeover deal by the end of March 2016, The Wall Street Journal reports.
About 3.56 million shares have changed hands as of 3:17 p.m. ET today, compared to its average trading volume of about 143,380 shares a day.
Portland, Ore.-based Stancorp Financial Group is a holding company and conducts business through wholly owned operating subsidiaries throughout the U.S.
Through its subsidiaries, the company has the authority to underwrite insurance products.
Separately, TheStreet Ratings team rates STANCORP FINANCIAL GROUP INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate STANCORP FINANCIAL GROUP INC (SFG) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, increase in net income and good cash flow from operations. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 9.7%. Since the same quarter one year prior, revenues slightly increased by 2.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Although SFG's debt-to-equity ratio of 0.22 is very low, it is currently higher than that of the industry average.
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Insurance industry average. The net income increased by 17.5% when compared to the same quarter one year prior, going from $48.10 million to $56.50 million.
- Net operating cash flow has significantly increased by 490.57% to $81.50 million when compared to the same quarter last year. In addition, STANCORP FINANCIAL GROUP INC has also vastly surpassed the industry average cash flow growth rate of 21.50%.
- You can view the full analysis from the report here: SFG Ratings Report