makes bigger offer for Donegal Group stock
Gregory Mark Shepard
didn't fly the white flag for long.
On Thursday, Aug. 1, he
tender offer that would have increased his
minority stake in Donegal Group
But on Friday, Aug. 2, Shepard
disclosed a new and bigger offer that would give him control of the firm.
, a disgruntled Donegal Group shareholder, said Aug. 2 that he
is offering to buy 3.3 million Class B shares of Donegal Group stock.
would pay $22 a share, for a total of $72.6 million.
The stock closed at $20.35 a share on Aug. 1.
It closed at XXX a share on Friday, Aug. 2.
If successful, Shepard
would own 53.5 percent of the voting power in the company.
That would give him control of the firm and let him put his
nominees in most seats on the Donegal Group board.
has been sparring with Donegal Group
management for years, he
wants the deal to be "amicable."
An amicable transaction would be in the best interests of the firm, its shareholders and its employees, according to Shepard
"On behalf of all (Donegal Group) shareholders, I sincerely hope that you accept my invitation," he
said in a letter to the firm.
Shepard, of Bradenton, Fla., is an attorney and investor who's been a Donegal Group investor since 2005.
Several times he
has sharply criticized management as ineffective and the firm as underperforming, suggesting it sell itself.
has defended the company's strategy and results.
In March, Shepard
announced a tender offer to acquire 963,000 Class B shares for $30 each.
When the twice-extended deadline passed Wednesday with only 394,000 shares tendered, Shepard
dropped the offer.
In unveiling the new offer Friday, Shepard
again jabbed at Donald H. Nikolaus, Donegal Group
president and chief executive officer.
offer to $22 because Nikolaus "apparently believes I am overpaying" at $30.
Shepard asks that the boards of Donegal Group and Donegal Mutual "do their fiduciary duty, and not let (Donegal Group) and Donegal Mutual continue as a Nikolaus family fiefdom."
was confident he
could obtain financing for the transaction if it is done on an amicable basis.
"I have been in preliminary contact with a large investment bank, and with lending institutions," he
said, "and have been informed that on an 'amicable' basis, there should be no problem in facilitating the acquisition of control of (Donegal Group), especially in light of the amount of capital I would contribute to the transaction."
did not specify the amount of capital he
would put in.
If Donegal Mutual rebuffs him, Shepard
will rekindle his
original plan to buy 963,000 Class B shares, but do so in the open market
and in privately negotiated transactions.