Top managers at US Facilities, confident that shareholders would rebuff a sale of the insurance holding company, said Monday they will ask the company's directors to allow a vote at the upcoming annual meeting on two issues proposed by Fidelity National Financial Inc.
Directors of US Facilities scheduled a board meeting for next Monday to review reports from a special directors' committee and its financial adviser on Fidelity's $79-million bid to take over the company and on Fidelity's request for a shareholder vote.
The bid technically has expired, though Fidelity, the nation's fifth-largest title insurer, said it would make the same $15-a-share offer to stockholders that it made to the company. First, though, Fidelity wants shareholders to vote on whether US Facilities should be put on the block to the highest bidder and whether two of Fidelity's nominees should be elected to the board.
"We're trying to be fair to the shareholders," said US Facilities spokeswoman Rosemary L. Mulligan. She said management is concerned about possible liability because it has a fiduciary responsibility to bring any serious acquisition offer before shareholders.
This move surprised Fidelity Chairman William P. Foley II. "The best way to ensure that the company continues to respond is for shareholders to give us their proxy so that we can vote on the two measures," he said.
US Facilities said in a news release that directors will make a recommendation to shareholders well before its May 25 annual meeting.
Meanwhile, in a letter Monday to shareholders, Chairman George Kadonada lashed out at Fidelity's offer, questioning Fidelity's financial capabilities.
"Make no mistake," he wrote, "Mr. Foley's sole motivation is to exploit your company to advance his own interests and those of other Fidelity National stockholders."
He questioned "whether there ever will be a serious and credible proposal from Fidelity National." And he questioned the independence and qualifications of the two Fidelity director nominees, saying they have no insurance industry background and would "represent the interests of Fidelity National and not those of US Facilities and its stockholders."
Foley, noting that Fidelity is a "very strong organization" financially, said he would send a letter today to US Facilities shareholders to respond to Kadonada's statements.