AXA-MIDI RULING SET IN CALIF.

AXA-MIDI RULING SET IN CALIF.

California Insurance Commissioner Roxani Gillespie's ruling on Paris-based Axa-Midi Assurances's bid to buy Farmers Group Inc. should be announced this afternoon in San Francisco.

Axa-Midi plans to buy Farmers from Hoylake Investment Ltd. headed by financier Sir James Goldsmith's if Sir James is successful in a $21 billion hostile take over of London's B.A.T. Industries, Farmers' parent.The California regulator would be the first of nine state regulators who must approve Axa's purchase of Farmers.

Elliot Sloan, an Axa spokesman, told The Journal of Commerce the company was prepared to take action to defend its right to make the purchase in the event Ms. Gillespie turns down Axa Midi's bid.

In a February hearing on the matter, Charles L. Schultz, Farmers' senior vice president of finance, charged Axa-Midi's proposed plan involved a 100 percent leveraged, $4.5 billion purchase of Farmers.

"To repay the debt, Axa-Midi plans to take 75 percent of Farmers' net income in dividends, causing Farmers' exchanges to lose valuable tax benefits and radically change Farmers investment policy," Mr. Schultz said.

"Currently only 35 percent of Farmers's net income is paid in dividends. The exchanges have received the benefit of $600 million from tax refunds during the past 10 years, and the current investment policy is a prudent mix of equities and taxable and municipal bonds," said Mr. Schultz.