Specialty Underwriters' Alliance, Inc. Urges Shareholders to Reject Election of Hallmark Board Slate
April 06 2009 - 9:00AM
PR Newswire (US)
CHICAGO, April 6 /PRNewswire/ -- Specialty Underwriters' Alliance,
Inc. ("SUA" or the "Company") (NASDAQ:SUAI) today announced that
the proxy statement for the Company's 2009 Annual Meeting is
currently being distributed to stockholders, along with SUA's 2008
Annual Report and information addressing the proxy contest being
waged by Hallmark Financial Services, Inc. ("Hallmark"). A copy of
all the Company's proxy materials can be downloaded at
http://ir.suainsurance.com/proxy.cfm. In a letter to stockholders
accompanying the proxy statement, the Company noted that Hallmark
is proposing in its proxy materials to replace three of SUA's
current directors with candidates selected by Hallmark. SUA's
letter explains that Hallmark's nominees, if elected, would shift
board representation in favor of Hallmark and thus away from the
interests of all SUA stockholders. Commenting on the proxy contest,
Courtney Smith, chairman of the board, said, "Based on numerous
representations by Mark Schwarz, the chief executive officer of
Hallmark, we believe that Hallmark's ultimate goal is to acquire
control of SUA. This is clearly not in the best interests of SUA's
stockholders. If Hallmark were to acquire three board seats, a
stockholder with a 9.9% stake would command more than 40% of the
voting control of the company. We believe this excess
representation will jeopardize the true independence of the board
while furthering the interests of Hallmark." The letter from SUA to
its stockholders states, "In an effort to avoid this costly proxy
contest, we approached Mr. Schwarz on March 17, 2009, and told him
our board was willing to increase its size to add one of the
additional directors he had proposed. We requested that Hallmark
agree not to seek control of SUA for a reasonable period of time
without approval of our board (which would include Hallmark's
nominee)." "Mr. Schwarz rejected this offer and, by doing so, we
believe demonstrated his true motivation, which is control of SUA,"
said Smith. Smith stressed, "We constantly reach out to our
stockholders so that we may better understand their concerns. Our
board will always seek to increase value for all of our
stockholders, whether through organic growth or through a sale or
merger of the company." He added, "When Hallmark proposed to buy
SUA in June of 2008, the board of SUA, after extensive deliberation
with SUA's legal and financial advisors, determined that the
all-stock offer was inadequate and inconsistent with the company's
strategic direction. "We also take very seriously our
responsibilities of corporate governance. This has been verified by
RiskMetrics Group, a leading proxy advisor who rates public
companies. SUA's letter to stockholders points out that SUA's
Corporate Governance Quotient is better than 83.1% of all other
insurance companies (and better than 99.2% of all rated companies).
This compares with Hallmark's rating of 31.4%." Smith concluded,
"During our most recent visit with many of our larger stockholders,
we were pleased to hear unanimous support for our board's previous
decision not to accept the Hallmark offer. We believe our
stockholders are best served by continuing to build our business
and insisting that any sale or merger transaction recognize the
long-term potential of the SUA business platform." About Specialty
Underwriters' Alliance, Inc. Specialty Underwriters' Alliance,
Inc., through its subsidiary SUA Insurance Company, is a specialty
property and casualty insurance company providing commercial
insurance products through exclusive wholesale Partner Agents that
serve niche groups of insureds. These targeted customers require
highly specialized knowledge due to their unique risk
characteristics. Examples include tow trucks, professional employer
organizations, public entities, and contractors. SUA's innovative
approach provides products and claims handling, allowing the
Partner Agent to focus on distribution and customer relationships.
Safe Harbor Statement The Private Securities Litigation Reform Act
of 1995 provides a "safe harbor" for forward-looking statements.
This release or any other written or oral statements made by or on
behalf of the company may include forward-looking statements that
reflect the company's current views with respect to future events
and financial performance. All statements other than statements of
historical fact included in this release are forward-looking
statements. Forward-looking statements can generally be identified
by the use of forward-looking terminology such as "may," "will,"
"plan," "expect," "intend," "estimate," "anticipate," "believe" or
"continue" or their negative or variations or similar terminology.
All forward-looking statements address matters that involve risks
and uncertainties. Accordingly, there are or will be important
factors that could cause our actual results to differ materially
from those indicated in these statements. We believe that these
factors include but are not limited to ineffectiveness or
obsolescence of our business strategy due to changes in current or
future market conditions; increased competition on the basis of
pricing, capacity, coverage terms or other factors; greater
frequency or severity of claims and loss activity, including as a
result of natural or man-made catastrophic events, than our
underwriting, reserving or investment practices anticipate based on
historical experience or industry data; the effects of acts of
terrorism or war; developments in the world's financial and capital
markets that adversely affect the performance of our investments;
changes in regulations or laws applicable to us, our subsidiaries,
brokers or customers; acceptance of our products and services,
including new products and services; changes in the availability,
cost or quality of reinsurance and failure of our reinsurers to pay
claims timely or at all; decreased demand for our insurance or
reinsurance products; loss of the services of any of our executive
officers or other key personnel; the effects of mergers,
acquisitions and divestitures; changes in rating agency policies or
practices; changes in legal theories of liability under our
insurance policies; changes in accounting policies or practices;
and changes in general economic conditions, including inflation and
other factors. Forward-looking statements speak only as of the date
on which they are made, and the company undertakes no obligation to
update publicly or revise any forward-looking statement, whether as
a result of new information, future developments or otherwise.
DATASOURCE: Specialty Underwriters' Alliance, Inc. CONTACT: Leslie
Loyet of Financial Relations Board, +1-312-640-6672, , for
Specialty Underwriters' Alliance, Inc.; or Scott Goodreau of
Specialty Underwriters' Alliance, Inc., 1-888-782-4672,
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