Fidelity National Financial Inc., threatening another proxy fight in its long, hostile bid to take over a Costa Mesa insurance company, said Thursday that it has renewed its proposal to acquire US Facilities Corp. for $15 a share in cash.
The hostile bid came after US Facilities said Thursday that it had withdrawn its offer to allow the Irvine title insurer a look at its private financial records. Fidelity executives said they never liked the confidentiality terms US Facilities had set for reviewing those records.
The jockeying is a prelude to the May 24 annual shareholders meeting of US Facilities. It was at last year's meeting that Fidelity, which now owns 11% of US Facilities, won an overwhelming shareholder vote to put the company up for sale to the highest bidder.
At the time, Fidelity, the nation's fifth-largest title insurer, also appeared to win two seats on the nine-member board, but a Delaware court later reinterpreted the vote and gave those seats to US Facilities incumbents.
This year, Fidelity said, it will ask shareholders to elect three director-nominees it wants on the board if management continues refusing to negotiate a sale of the company.
"Nothing has changed in terms of our interest level," said Frank P. Willey, Fidelity's president.
Fidelity's offer amounted to a $79-million deal last year, but US Facilities has repurchased some of its stock since then, thus reducing the offer to $73 million.
Fidelity has wanted to acquire US Facilities to diversify its holdings beyond the real estate industry, where fluctuations in interest rates cause wide variations in earnings.
The renewed offer breaks five months of silence between the managements of the two companies. Executives at US Facilities "presumed that Fidelity no longer had an interest in proceeding down that path" toward a merger, said Cecilia Wilkinson, a company spokeswoman.
US Facilities' stock closed at $13.375 a share Thursday, unchanged from Wednesday's close in Nasdaq trading. Fidelity's stock fell 12.5 cents a share to close at $10.25 on the New York Stock Exchange.
The company's longtime chairman and chief executive, George Kadonada, resigned this week after lengthy discussions over a severance package. He had been adamantly opposed to the sale of the company, and Fidelity executives had hoped that the company's president, David Cargile, would be more amenable to negotiations.
The company said Thursday that Cargile, who was out of town and unavailable for comment, was named to replace Kadonada as chief executive.