Bid to Acquire U.S. Facilities Wins Backing

A former top executive at US Facilities Corp., the target of a $79-million hostile takeover bid, has thrown his support behind the prospective buyer, according to a statement issued Monday by the bidder.

Fidelity National Financial Inc., the nation’s fifth-largest title insurer, said that Douglas L. Bockus has sent a letter to directors of the Costa Mesa insurance holding company urging them to accept Fidelity’s bid of $15 a share, calling it an “attractive” offer.

Bockus, who could not be reached for comment Monday, also has given Fidelity the right to vote his shares at the annual meeting of US Facilities on May 25. Fidelity is seeking shareholder votes as part of its takeover effort.

Bockus is the former president of US Benefits, the main operating subsidiary of US Facilities. He also was a senior vice president at US Facilities. Fidelity said that US Benefits, which sells medical stop-loss insurance, provides more than 80% of the corporation’s consolidated earnings.

Bockus quit shortly before Fidelity announced its takeover bid three weeks ago. He reportedly disagreed with a corporate decision to funnel money into a property and casualty subsidiary, which lost money after the Northridge earthquake in January.

A spokeswoman for US Facilities, however, said that Bockus left April 30 as part of a negotiated departure, which included a provision that no further details be disclosed. Under a reorganization, US Benefits operations have been placed under another unit, she said, and he will not be replaced.

She confirmed that his departure had nothing to do with Fidelity and that he had sent a letter to directors. She would not disclose the contents of the letter.

Meantime, directors at US Facilities met Monday to review Fidelity’s offer. Results of the daylong session were expected to be released early today.

Directors have already agreed to let shareholders vote on two issues proposed by Fidelity: whether the company should be put up for sale to the highest bidder and whether two Fidelity nominees should be elected to the board.

Fidelity Chairman William P. Foley II sought a merger in an unusually strong-worded letter April 26 to George Kadonada, his counterpart at US Facilities. But after Kadonada and other directors delayed a decision until they could review and meet again in mid-May, Foley initiated a battle for shareholder votes, alleging that the company was under-performing.