INMG.OB Cancels Self-Tender Offer, Merger Agreement

Insurance Management Solutions Group Inc. of St. Petersburg, Fla. (INMG.OB), which provides business process outsourcing solutions to insurance companies and financial institutions, announced today that its Board of Directors, withdrew its approval of the company’s previously proposed cash tender offer for all presently outstanding publicly-held shares of its common stock, $0.01 per share at a price of $3.08 per share, net to the seller in cash (the “Offer”). INMG.OB decided not to follow through with the Offer after the Board withdrew approval upon the recommendation of the Special Committee of the Board of Directors.

The Offer was to have been made pursuant to an Agreement and Plan of Merger, dated August 15, 2002, by and among the company, Bankers Insurance Group Inc. (BIG), and certain direct and indirect subsidiaries of BIG. That agreement was terminated. BIG beneficially owns approximately 68 percent of the outstanding shares of common stock.

Under the terms of the terminated agreement, BIG and certain of its subsidiaries had agreed not to tender the shares of common stock they owned in response to the Offer. Also pursuant to the BIG agreement, INMG.OB had agreed to loan BIG and/or Bankers Underwriters Inc. (BUI), a wholly-owned subsidiary of BIG, up to $7 million under a revolving line of credit, secured by the insurance flood book of BUI. As a result of the termination, the company has the right to require that the Line of Credit be repaid in full, upon 90 days’ notice, but has elected not to exercise this right at this time.

At November 18, 2002, the amount drawn on this Line of Credit was $6.6 million. Unless the company exercises its right to require that the Line of Credit be paid upon 90 days’ notice as described above, all amounts due under the Line of Credit will be due July 31, 2003; monthly interest-only payments will be due prior to maturity.

The Offer and the agreement with BIG were terminated after the company and its advisors determined such action was in the best interests of the company and its shareholders, and was required by its fiduciary duties.

INMG.OB is currently engaged in discussions with a third-party potentially interested in acquiring the company or its business, but it gave no assurance as to whether these discussions will result in an acceptable offer, or as to whether such a sale will be consummated.

Topics Mergers & Acquisitions