News Briefs

Charley’s big insurance tally; LifePoint buying Province; GDP downward revision; dying on the cheap.
Ed ZwirnAugust 18, 2004

•Hurricane Charley will prove to be the cause of the third-largest payout ever by the property/casualty insurance industry, trailing only 9/11 and 1992’s Hurricane Andrew, CBS Marketwatch reports. In Florida, insurers were expecting claims exceeding $15 billion, according to a revised estimate late Friday by Risk Management Solutions, a company that helps insurers manage and quantify risk. Hurricane Andrew, which struck southeast Florida in 1992, caused more than $30 billion in damage. State Farm is the largest homeowners’ insurer in the state, according to the Florida Department of Financial Services, while Allstate is second.

•LifePoint Hospitals Inc. said on Monday it agreed to acquire Province Healthcare Co. for about $1.125 billion in cash and stock, Reuters reported. Each Province Healthcare shareholder will get a per-share amount consisting of $11.375 in cash and a number of shares of common stock in the newly formed company equal to an exchange ratio of between 0.3447 and 0.2917.

The terms represent a 66 percent premium for Province Health based on the closing price of its shares on Aug. 13. Including the assumption of debt, the deal will have a total value of about $1.7 billion. The report said the acquisition would help the acquirer “broaden its geographic reach.”

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•The preliminary estimate for the U.S. second quarter gross domestic product may be in for some revision. According to John Lonski of Moody’s Investors Service, the surprise widening of the trade deficit in June “suggests a downward revision for Q2’s annualized sequential increase of real GDP from an initial 3 percent to an updated 2.6 percent.” On the other hand, U.S. growth is still leading the global economy. “The second quarter’s 4.6 percent early increase by real GDP will still top both the EU15’s limp 2.5 percent and Japan’s much improved 4.4 percent,” Lonski writes.

• Costco Wholesale Corp. seems to want to appeal to a new group of customers: those who have encountered sticker shock at the funeral parlor. The wholesale retailer announced Monday that it has started marketing caskets at a North Side Chicago store, as well as an outlet in the nearby suburb of Oak Brook, Ill., the Associated Press reported. Each of the six models from the Universal Casket Co., in colors including lilac and Neapolitan blue, is priced at $799.99, made of 18-gauge steel, considered medium weight for caskets, and can be delivered within 48 hours, according to the report. Said Bonnie Busch, a vice president in Costco’s Midwest division: “I hope they don’t have any deaths in the family, but if they do, I hope we can help people out.”