INSURANCE

National Interstate rejects bid

Great American Insurance Co. needs to pay more if it wants to buy out Richfield specialty insurer National Interstate Corp.

National Interstate’s special committee of its board of directors unanimously rejected a $30.75 per share verbal proposal from Great American, the insurer announced Wednesday.

Great American is a wholly-owned subsidiary of Cincinnati-based American Financial Group Inc., which in turn is National Interstate’s majority shareholder. American Financial wants to own all of National Interstate through its Great American subsidiary.

This is American Financial Group’s second attempt to buy out all of National Interstate.

BANKING

Fed OKs dividend plans

The Federal Reserve on Wednesday gave the green light to plans by U.S. major banks to raise their dividends and buy back shares, judging their financial foundations sturdy enough to withstand a major economic downturn. The Fed rejected the plans put forward by the U.S. businesses of two European banks, Germany’s Deutsche Bank and Spain’s Santander.

Morgan Stanley’s plan only got conditional approval and it has until the end of the year to revise it. But the Wall Street institution was still allowed to return profits to shareholders, and it quickly announced plans to buy back up to $3.5 billion worth of its stock and to boost its dividend 33 percent.

As a result of its annual “stress tests,” the Fed outright rejected plans by the U.S. division of Santander and by Deutsche Bank Trust Corp., the U.S. transaction bank and wealth management business of Germany’s biggest bank. It was the third straight year that the Fed rejected the plan of Santander, which is one of the biggest banks in Europe, and the second straight rejection for Deutsche Bank.

ECONOMY

Consumer spending rises

Americans continued their spring spending spree last month after a slow winter even as the growth in their incomes slowed, signaling an improved economic expansion in the second quarter.

Consumer spending increased 0.4 percent in May, the Commerce Department said Wednesday.

The figure was down sharply from a 1.1 percent gain the previous month, but that was the best in nearly seven years.

The April jump was spurred by pent-up demand after slow growth during the winter amid a stock market decline fueled by concerns about the global economy.

As financial markets rebounded this spring, economists expected consumers to become less cautious. However, those improvements could be stalled by new concerns caused by Britain’s vote to leave the European Union.

ONLINE SHOPPING

Walmart eyes Amazon battle

Walmart is trying to get a jump on Amazon’s second annual sales bonanza. The world’s largest retailer is offering a free 30-day trial on its two-day unlimited shipping service, and an extra month free for paying members, starting Wednesday as it looks to sharpen its attack against the online leader.

Beginning Friday, it will also offer discounts on an array of products from swimming pools to electronics that will ramp up as July goes by. These discounts, or what Walmart calls “rollbacks,” typically last 90 days or longer.

Walmart’s moves come as Amazon is expected to launch for the second year a sales bonanza called Prime Day, which it has touted as bigger than “Black Friday.”

Last July, Walmart responded to Amazon’s Prime Day by lowering the threshold for free shipping for online purchases to $35 from $50 for at least 30 days and offering discounts on thousands of items online. Other stores, including Macy’s, also scrambled to offer discounts on their websites in an effort to compete.

Amazon’s Prime Day last year, on July 15, was tied to its 20th anniversary and the sale was aimed at its Prime members. The company decided after the sale it would become an annual event.

Compiled from staff and wire reports.