The $143 million acquisition of Equitable General Corp. by Gulf United Corp. of Jacksonville, Fla., was completed yesterday when Equitable General executives signed documents merging the McLean insurance company with a subsidiary of the Florida firm.
Now part of Gulf United's Gulf Life Insurance Co., Equitable General will keep its headquarters in Fairfax County and will countinue to operate as a separate company with its present management and employes.
As part of the merger, Gulf United's board added three directors from Equitable General; Charles E. Phillips, chairman, George C. Boddiger, president, and J. Hillman Zahn, vice president of Chesapeake & Potomac Telephone Co.
Equitable General stockholders, who approved the merger at a special meeting in December, will receive either $51 cash for each share or a share of a new issue of Gulf United cumulative convertible preferred stock paying an annual dividend of $3.78.
Gulf United agreed to buy up to 1.3 million of the 2.8 million Equitable General shares for cash and to exchange the remainder for stock.
Equitable General officials said the exact number of shares acquired for cash will not be known for several days. Shareholders had until the time of the merger yesterday to choose their method of payment.
If owners of more than 1.3 million shares ask for cash, the cash payments will be prorated.
Some shareholders of Equitable General opted for the stock because the exchange of shares will be taxfree, while those accepting cash will have to pay capital gains taxes.
The $51-per share buyout came after a bidding war among three potential partners pushed the price up from $40 a share in a matter of weeks. The stock was trading for $26.50 a share a year ago.
The new parent of Equitable General is primarily an insurance company. Besides Equitable General and Gulf Life it owns American-Amicable Life Insurance Co. in Waco, Tex., and Interstate Life & Accident Insurance Co. in Chattanooga, Tenn.
Gulf United also owns two television stations and six radio stations.