Specialty Underwriters’ Alliance Inc. (SUA), headquartered in Chicago, reported that it has distributed a letter to stockholders in response to the proxy contest being waged by Hallmark Financial Services Inc., which is seeking to acquire controlling shares of Specialty Underwriters Alliance.
Fort Worth, Texas-based Hallmark Financial Services Inc. announced in early April that it has nominated independent director candidates to replace three members of SUA’s board of directors and has launched a Web site for SUA stockholders, www.SUAItownhall.com.
In its announcement, Hallmark urged SUA stockholders to visit the Web site because it contains important information regarding Hallmark’s election contest, including biographies of the three independent board nominees and communications between Hallmark and SUA, as well as a copy of all proxy materials and shareholder communications.
Hallmark currently owns 9.9 percent of SUA’s outstanding common stock. Hallmark has said there is a need for improved governance and board and management accountability to SUA stockholders. It also has criticized SUA’s operating performance.
In its letter to stockholders, SUA accused Hallmark of communicating “half-truths” and “outright inaccuracies” to stockholders regarding Hallmark’s effort to take control of SUA.
SUA’s board urged shareholders to participate in the vote for board nominees using the white proxy card provided by SUA and to reject the gold proxy card sent to shareholders by Hallmark. The gold proxy card containing the names of Hallmark’s recommended nominees is, according to the SUA, “an attempt by Hallmark to gain effective control of SUA without adequately compensating all of SUA’s stockholders.”
“With regard to a takeover proposal made by Hallmark last year, Hallmark has stated ‘SUA’s Board rejected Hallmark’s proposal and refused to enter into discussions with Hallmark,'” the SUA letter said.
SUA, however, said its “board deliberated fully with its legal and financial advisors in 2008 and determined the offer was well below market for insurance acquisitions.”
The letter to stockholders also noted that “the company’s senior management has met with Hallmark during 2008 and 2009 at Hallmark’s request.
“Four of SUA’s independent directors have met with Hallmark’s chairman, Mark Schwarz, and CEO, Mark Morrison, to hear their perspectives and positions.
“Our board will continue to consider whether a sale or merger will best increase value for our stockholders as compared to organic growth.
“We believe any sale or merger transaction should recognize the long-term potential of the SUA business platform.”
The SUA letter also defended the performance of the company’s management and its market performance.
Sources: Specialty Underwriters’ Alliance Inc., www.suainsurance.com/; Hallmark Financial Services Inc., www.hallmarkgrp.com/
Topics Excess Surplus Underwriting
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