Gregory M. Shepard, an activist investor who's been a major stockholder of Pennsylvania-based Donegal Group and a frequent critic of the company, has sold his shares to the company Tuesday, according to securities filings.
Shepard's stake consisted of 3.675 million shares of Donegal Group
Class A common stock and 400,000 shares of Donegal Group
Class B common stock - which together made up nearly 10 percent of the voting power in Donegal Group
sold all of his
shares to Donegal Group
and Donegal Mutual Insurance Company
for approximately $70.04 million.
has been a Donegal Group
stockholder since 2005 and was Donegal's largest shareholder with the exception of Donegal Mutual
, the holder of majority voting control of Donegal Group
The Securities and Exchange Commission filings Tuesday show that the sales agreement contains "standstill" provisions in which Shepard
affiliates agree not to take control-seeking actions with respect to seeking control of Donegal Group
for a period of 25 years from the date of the sale.
This means Shepard would no longer try to get involved in Donegal Group
's business or buy Donegal's stock.
As a result of these purchases, Donegal Mutual
will now hold 73.8 percent of the total voting power of Donegal Group
's common stock outstanding, and Shepard
owns no shares of either class.
Shepard, a Florida-based lawyer and former insurance executive, has publicly criticized Donegal Group's management and ownership in recent years.
Last year, he charged that Donegal Group's Board of Directors has "failed miserably" to meet its fiduciary duties and that Donegal shareholders have suffered from the company management's lack of commitment to shareholder value.
also unsuccessfully pushed for the sale of Donegal Group
to a third party and announced last year that he
had plans to approach at least 18 property/casualty insurance companies to discuss their interest in acquiring Donegal Group
Topics:Business Moves & Mergers, Donegal buys out activist investor's shares, Donegal Group
, Donegal Mutual Insurance Company
, Gregory M. Shepard
, Gregory M. Shepard
sells Donegal Group
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