It looks like Ohio litigation in the contentious buyout of Richfield specialty insurer National Interstate largely will take place in Cincinnati, the backyard of the company’s majority shareholder and anticipated buyer.
A Summit County Court of Common Pleas judge on Monday declined jurisdiction to hear a proposed class action lawsuit that opposes the buyout process undertaken by Cincinnati-based American Financial Group and National Interstate.
Also on Monday, AFG said it was moving its $30-per-share tender offer deadline from Thursday to midnight on March 17. AFG owns 52 percent of National Interstate and wants to buy up the remaining shares it does not already own. AFG also said it is waiving what is called a “minimum tender” condition and will purchase any and all shares tendered by National Interstate shareholders.
At $30 per share, AFG, through its subsidiary Great American Insurance Co., would pay nearly $285.7 million to own all of National Interstate.
Judge Alison McCarty on Monday said because a similar lawsuit was filed Feb. 11 in Hamilton County, she was declining jurisdiction in a lawsuit filed Feb. 18 in Summit County by National Interstate shareholder Cambridge Retirement System.
“Have fun in Cincinnati,” the judge said.
Lawyers for both sides declined to comment afterward.
Lawyers representing AFG and National Interstate had argued before McCarty that the Cincinnati civil case was filed first and that to have a highly similar lawsuit in Summit County risked what was termed “inconsistent adjudication.”
“You cannot have two cases deciding the same matter,” said James Burke, lawyer for AFG and Great American Insurance.
The plaintiffs who filed the Summit County lawsuit may refile in Hamilton County, he said.
A Cincinnati Common Pleas judge on Friday declined to impose a temporary restraining order and preliminary injunction against AFG and National Interstate.
The lawsuits opposing the proposed buyout have argued in part that five of National Interstate’s 10 directors have conflicts of interest because four are current AFG executives and another recently retired from AFG. The lawsuits also have described AFG’s tender offer as too low and said that National Interstate’s board should have created an independent committee to look into AFG’s offer.
National Interstate founder Alan Spachman, who remains a company director, mutual fund firm T. Rowe Price Associates and others have said they oppose the current buyout offer and process.
Jim Mackinnon can be reached at 330-996-3544 or email@example.com