GraceKennedy Financial Group Limited (GKFG) has extended its $403.71-million takeover bid for its general insurance subsidiary Key Insurance Company Limited for a second time in two months.

The takeover bid opened on March 24 and was set to close on April 22. However, the takeover bid was extended to May 20 with the same $2.70 price per share and terms as contained in the original circular.

A new extension notice was published in the Jamaica Observer on Monday with GKFG now extending the takeover bid to July 11 — a month longer than the previous closing date. The new date takes place after Key’s virtual annual general meeting (AGM), which will be held at 2:00 pm on June 25.

No rationale was given in the advertisement for the extension of the takeover bid. GKFG currently owns close to 410 million ordinary shares of Key or 73.3 per cent of the total. GKFG is seeking to acquire the remaining 149.5 million shares of Key Insurance and take the general insurer private. Apart from GKFG, the other top nine shareholders own 125.7 million or 22.5 per cent of Key Insurance.

According to the takeover bid circular, GKFG intends to delist Key Insurance once it acquires enough shares to bring its ownership to more than 80 per cent of Key. If through this takeover bid GKFG manages to acquire more than 90 per cent of Key, it will then invoke compulsory takeover for the rest of the shares at the $2.70 offer price.

Key’s special committee of directors recommended that the remaining shareholders accept the takeover bid, pointing to the price of $2.70 being higher that the company’s book value of $2.56 at the end of 2024.

Key Insurance’s first quarter saw its insurance revenue rise 15 per cent from $697.51 million to $801.73 million, largely due to growth in its motor insurance segment, which accounts for two-thirds of its business. However, the insurance service expense grew by 17 per cent to $581.59 million due to higher claims costs in the motor segment. After accounting for the higher net expenses from reinsurance contracts, Key’s net insurance expense moved from $8.36 million to $11.22 million.

Despite this increase in net insurance expense, Key’s investment income and other operating income were enough to drive profit before tax 26 per cent higher to $18.73 million. Net profit came in 26 per cent higher at $12.48 million, with earnings per share at $0.022.

Key’s stock price dipped four per cent on Monday to $2.41, which left it down one per cent in 2025 with a market capitalisation of $1.35 billion. The company’s stock price traded at an intraday high of $2.66 on Tuesday.

“Key Insurance is committed to navigating the year ahead with prudence and agility. We acknowledge the challenges, which include falling interest rate and increasing claims costs. The increase in claims costs could be adversely impacted by changes in the geopolitical environment which may have a ripple effect on our business. Notwithstanding, we are continuously monitoring our portfolio and will pivot as required. We remain steadfast in our commitment to sustainable growth and profitability. Digital transformation remains a focal point as we continuously strive to enhance the experiences for our customers and intermediaries, streamlining their interactions and enhancing our operational efficiency,” Key Insurance stated in its outlook.