HCC Insurance Holdings Inc.
Robbins Arroyo LLP: Acquisition of HCC Insurance Holdings Inc. (HCC) by Tokio Marine Holdings Inc. May Not Be in Shareholders’ Best Interests
Robbins Arroyo LLP is investigating the proposed acquisition of HCC Insurance Holdings Inc. (NYSE: HCC) by Tokio Marine Holdings Inc. (OTC: TKOMY). On June 10, 2015, the two companies announced the signing of a definitive merger agreement pursuant to which Tokio will acquire HCC. Under the terms of the agreement, HCC shareholders will receive $78.00 in cash for each share of HCC common stock.
Is the Proposed Acquisition Best for HCC and Its Shareholders?
Robbins Arroyo LLP’s investigation focuses on whether the board of directors at HCC is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $78.00 merger consideration represents a premium of only 35.1% based on HCC’s closing price on June 3, 2015. This premium is significantly below the average one-week premium of nearly 47.5% for comparable transactions within the past five years.
On April 28, 2015, HCC reported strong quarterly earnings results for its first quarter 2015. Total revenue was $676.5 million, an increase of 4.2% compared to the same quarter of 2014. Net earnings were $112.9 million, an increase of 4.6% compared to the same quarter of 2014. Additionally, HCC has beat consensus analyst estimates for adjusted EPS and adjusted net income in every quarter for the past two years, and beat consensus analyst estimates for sales in three out of the past four quarters. In commenting on these results, HCC Chief Executive Officer Christopher J.B. Williams remarked, “For the third consecutive year, we are pleased to report record first quarter results. Despite a challenging market, we continue to grow our businesses selectively and profitably, with net written premium up 13% overall and 4% excluding ProAg. We are pleased with ProAg’s results, which are slightly ahead of our expectations.”
In light of these facts, Robbins Arroyo LLP is examining HCC’s board of directors’ decision to sell the company now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
HCC shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.
HCC shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.