Look It Over, US Facilities Tells Fidelity : Acquisitions: Hostile bidder invited to check books and meet management to see if it wants to submit a definitive offer.
US Facilities Corp. said Wednesday that it would allow hostile bidder Fidelity National Financial Inc. to review its financial records and meet with its management so Fidelity can decide whether it wants to submit a definitive acquisition offer.
But US Facilities’ latest action in response to Fidelity’s $79-million takeover bid, first made in April, was met with skepticism by Fidelity. And it touched off another dispute in the prolonged battle between the two Orange County companies.
US Facilities, a medical stop-loss insurer based in Costa Mesa, said in a letter to Fidelity that the Irvine-based title insurer would have 30 days after the delivery of its confidential financial information to submit a firm bid. George Kadonada, US Facilities’ chairman and chief executive officer, said the board would carefully consider an offer.
But Frank Willey, Fidelity’s executive vice president and general counsel, said there were issues in the confidentiality agreement that came with the offer by US Facilities that need to be resolved. He declined to elaborate. US Facilities said it would not comment about its confidentiality agreement.
Willey also questioned whether US Facilities was sincere about addressing a shareholder resolution passed at its annual meeting in May to put US Facilities on the market, given that US Facilities’ board concluded that a sale of the company at this time would not maximize shareholder value.
US Facilities’ Kadonada said Tuesday that the board believes the company’s value will be significantly enhanced in the future as it grows and restructures.
US Facilities’ shares closed Tuesday at $12.50, down 43.75 cents in Nasdaq trading. Fidelity’s shares were unchanged at $11.75 on the New York Stock Exchange.