The planned purchase of beleaguered New York insurer Reliance Group Holdings is the latest in a string of opportunistic acquisitions by Leucadia National Corp.

On Friday New York-based Leucadia agreed to buy Reliance in a stock swap valued at about $293 million, or 25% of the insurer's book value at the end of the first quarter. The deal is conditional on regulators' approval and due diligence. Leucadia is a financial services holding company that owns insurance, banking, and mining interests, including American Investment Bank. It is "perhaps the best public company at buying and working out distressed purchases," said Keith Trauner, an analyst at Fairholme Capital Management in Short Hills, N.J.

"They've been doing this for close to 25 years," Mr. Trauner said. "What Leucadia has done is go into troubled situations where there were contingent liabilities but a viable core business and settled out the contingent liabilities for less than people thought" they would cost. A case in point, he said, was Leucadia's turnaround of Colonial Penn Insurance, which it bought in 1990.

Leucadia's banking interests include some savings operations, a subprime lending operation, and an auto lending entity, Mr. Trauner said. "That's a business that they have been in for a long time, that they have treated as a source of profits rather than as a large source of growth."

The acquisition is "not really that much of a surprise, given the stress [Reliance has] been under," said Christine Lai, an analyst at J.P. Morgan & Co. "I think they may be throwing in the towel."

Potential synergies with Leucadia's other financial businesses were probably irrelevant to its decision to buy Reliance, Ms. Lai said. "I think this transaction is better looked at as an asset play. Leucadia is acquiring $4 billion of invested assets for just under $300 million."

Leucadia guarded against the possibility of a higher bid for Reliance by including in the purchase agreement a penalty of $12 million plus expenses if Reliance's board and stockholders accept a higher offer.

A spokeswoman said Leucadia would not comment further on the Reliance deal.

Turning around Reliance "is not going to be an overnight workout," Mr. Trauner said. He predicted that in the end Leucadia would have to turn the insurer into a smaller, but much more profitable, business.

Reliance reported an operating loss of $36.5 million on revenues of $1.02 billion for the first quarter. It also sold, for $580 million, its well-performing surety business in February to Travelers Property Casualty Corp. in an effort to strengthen its capital base.

The insurer took a big hit in the Unicover Managers debacle last year when a workers' compensation insurance facility failed and caused losses that reverberated throughout the industry.

In January Reliance settled Unicover-related lawsuits with several insurers for $111 million after taxes. The insurer is suing Unicover, the managing general agent that put together the workers' compensation facility, alleging fraud.

Reliance stockholders would get just more than 0.11 share of Leucadia common stock in exchange for each outstanding share of Reliance common. Based on Thursday's closing price for Leucadia common stock, the exchange ratio is $2.55 per share of Reliance. The transaction is expected to be tax-free to Reliance stockholders and would be accounted for as a purchase.

In a statement, Reliance chairman Saul P. Steinberg - who stepped down as president and chief executive officer in February as the insurer's financial troubles mounted - said the Leucadia deal is designed to benefit Reliance's stockholders, whose shares dropped to $2.375 Thursday from a 12-month high of $10.625. In a letter to shareholders in February, he called the company's performance "unacceptable."

David J. Grill, vice president and treasurer, said the insurer has no further comment on the deal.

The low price may indicate that the insurance market is not turning around as quickly as some industry players would like, said Ms. Lai of J.P. Morgan.

"We've been hearing talk from a number of other insurers about rate increases" that would lead to better underwriting results for the property-casualty insurance industry, she said, but "I think it's unlikely that Reliance would have agreed to sell itself for what amounts to 25% of book value if the market were really turning."

Mr. Trauner, the Fairholme Capital analyst, said the deal does not necessarily mean the insurance market will not improve. "The insurance market is not monolithic," he said; "& rarely do these things turn on a dime. A turn can take a lot of time to happen.''

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