01/20/97 A 'SCRAMBLE' AHEAD FOR USLIFE

A 'SCRAMBLE' AHEAD FOR USLIFE

There is ''only one reason why I have acquired a large stake in USLIFE--prospects of a takeover,'' says one big value investor, a partner in a New York investment firm. USLIFE (USH), a major provider of individual and group life insurance and annuities, ''has all the enticing features that a buyer would want in an insurance company.''
Some big attractions: The company is cash-rich. And the stock, now at 34 a share, is trading at around its book value. What's more, he notes, USLIFE has a huge bond portfolio with long maturities, which have increased in value as interest rates have declined and are not included in the book value.
This investor says CEOs of other big insurers he has talked to say they want to go after USLIFE because of its size: Total revenues last year topped $1.7 billion, and assets were nearly $8 billion. Merging with such a large firm, he explains, would result in huge savings by eliminating duplication.
''The stock is an unmitigated bargain'' at its current price, says this pro. He figures USLIFE is worth 50 to 52 a share in a takeover, based on a projected price-earnings ratio of 15 and on estimated 1997 earnings of $3.45 to $3.50 a share. He concedes, however, that USLIFE Chairman Gordon Crosby--who runs the company as tightly as he did the submarine he commanded during World War II--seems averse to a takeover. But if Crosby, now in his mid-70s, showed signs of quitting or slowing down, ''offers would come in droves,'' according to this investor. Crosby wasn't available for comment.
Another pro who is bullish on the company--a strategist at a New York investment bank--says he's convinced ''a takeover will happen sooner or later,'' given the pace of consolidation in the industry. ''All it will take is for some company to throw in a bid, and the scramble for USLIFE will begin.''
By GENE G. MARCIAL