New book by Larry Connors Click here Improve your trading - See how
Paresh Patel, chairman of the board of Homeowners Choice, said in a statement that the company will not launch a hostile acquisition effort but "may do so at a later date."
Clearwater, Fla.-based Homeowners Choice (NASDAQ: HCII | Quote | Chart | News | PowerRating) offered $1 in cash and a half-share of Homeowners Choice common stock for each share of 21st Century Holding (NASDAQ: TCHC | Quote | Chart | News | PowerRating) stock. The offer amounted to about $40 million assuming a price of $8 for a Homeowners Choice share and just more than 8 million shares of 21st Century Holding stock (BestWire, Oct. 13, 2009).
About two weeks after the offer was made, 21st Century rejected it, calling it "wholly inadequate" (BestWire, Oct. 30, 2009).
Patel said Homeowners Choice did not undervalue 21st Century, as the insurer has been "trading below book value for more than a year," he said. The share price of 21st Century jumped during the offer but it never reached the offer price. This, said Patel, "is a strong indication that the market viewed our offer as fair, if not generous."
"Frankly, our track record indicates we could add substantial value to 21st Century's assets," said Patel.
21st Century reported a third-quarter net loss of about $4 million, compared with a net loss of $1.5 million during the third quarter in 2008. The company said its results were affected by increased reinsurance costs, less earned premium from mitigation credits and lower total revenues as a result of the company's decision not to write new homeowners insurance policies during wind season in Florida. The insurer's subsidiaries write commercial general liability, homeowners, flood, automobile and commercial auto in Florida.
Homeowners Choice releases its earnings on Nov. 10. The company, through its subsidiaries, offers homeowners, condominium and tenants insurance. Patel said Homeowners Choice expects to profit during the third and fourth quarters. The company has turned a profit for eight straight quarters, he added.
Recently, Homeowners Choice was selected by the Florida Department of Financial Services as the replacement insurer for American Keystone Insurance Co., which was ordered into liquidation and placed into receivership. Homeowners Choice also was authorized by regulators to assume 60,000 policies from Citizens Property Insurance Corp. as part of the state's continued "take-out" program to reduce the exposure of the last-resort, state-run insurer (BestWire, Oct. 30, 2009).
In afternoon trading on Nov. 6, shares of Homeowners Choice stock were selling at $8.27, down about 2.7% from the previous close. Shares of 21st Century Holding stock were selling at $4.01, down about 1.7% from the previous close.
The top five writers of homeowners multiperil in Florida in 2008, according to BestLink, based on direct premiums written, were: State Farm Group, with a 17.7% market share; Citizens Property Insurance Corp., with 16.2%; Universal P&C Insurance Co., with 7.2%; USAA Group, with 5.1%; and Tower Hill Group, with 4.5%.
(By Chad Hemenway, associate editor, BestWeek: Chad.Hemenway@ambest.com)
More News:
Market Updates |
Stock Alerts |
All Trading News |
Stock Index
About TradingMarkets | Contact | Advertise | Careers | Link to Us | Site Map | Help | Terms & Conditions | Privacy Policy | Return Policy | Testimonials | Feedback
The Connors Group, Inc. ("Company") is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. The analysts and employees or affiliates of Company may hold positions in the stocks, currencies or industries discussed here. You understand and acknowledge that there is a very high degree of risk involved in trading securities and/or currencies. The Company, the authors, the publisher, and all affiliates of Company assume no responsibility or liability for your trading and investment results. Factual statements on the Company's website, or in its publications, are made as of the date stated and are subject to change without notice.
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by Company are not indicative of future returns by that trader or system, and are not indicative of future returns which be realized by you. In addition, the indicators, strategies, columns, articles and all other features of Company's products (collectively, the "Information") are provided for informational and educational purposes only and should not be construed as investment advice. Examples presented on Company's website are for educational purposes only. Such set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the Information in making any investment. Rather, you should use the Information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment.
HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING AND MAY NOT BE IMPACTED BY BROKERAGE AND OTHER SLIPPAGE FEES. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.
The Connors Group, Inc.
10 Exchange Place, Suite 1800
Jersey City, NJ 07302
© Copyright 2009 The Connors Group, Inc.
