Scpie Holdings Backs Merger Deal With Doctors Co. At $28/share In Cash – Update
RTTNews
(RTTNews) – Monday morning, Los Angeles, California-based Scpie Holdings Inc. (SKP | news | PowerRating | PR Charts ), a major provider of healthcare liability insurance, said it backs the acquisition offer submitted by medical malpractice insurer, Doctors Co., of $28 per share in cash. The company noted that the bid was a result of a rigorous and open auction process. Upon closing of the deal, Scpie Holdings will become a wholly owned subsidiary of Doctors Co.
The offer represents a premium of about 31% over Scpie’s closing price one week before the transaction was announced. The company’s Board has already approved the deal and recommended to its shareholders to vote for the deal. A special meeting of Scpie Holdings stockholders will take place on March 26 to vote on the deal.
Earlier, the company had rejected the bid from American Physicians Capital, which had numerous and prohibitive conditions that would be make it highly risky to accomplish a merger deal with them. One of Scpie Holdings’ ex-directors, Joseph Stilwell, a hedge fund manager as well, and his lawyer are on the Board of American Physicians Capital and are advocating for the losing bidder, notwithstanding the rest of the Board’s concerns.
The company believes that Stilwell’s opposition to the proposed sale to Doctors Co. may be influenced by a conflict of interest due to his significant ownership stake in, and his position as a director of, the bidder he favors. The company warned the shareholders to not be misled by the ex-director’s rhetoric.
On October 16, Scpie Holdings had agreed to be acquired by Doctors Co. for about $28.00 per share in cash at a total valuation of nearly $281 million. The Board of Directors of Scpie has approved the proposed transaction and has resolved to recommend its stockholders to approve the merger.
The merger is expected to create the largest insurer of physician and surgeon professional liability insurance in the U.S. The Doctors Company, which has $2.2 billion in assets and 32,000 physicians nationwide, will expand its market leadership in California to nearly 19,000 physicians.
In Monday’s regular trading session, SKP is trading at $27.09, up $0.20 or 0.74% on a volume of 3,000 shares.
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