Even though Gregory Shepard recently dropped his bid to acquire more stock and voting power in Donegal Group Inc. of Lancaster County, he promised he wouldn't go away.
On Monday, he proved that by offering a closing bonus to any property and casualty insurance company, or other third party, that buys Donegal Group, a downstream insurance holding company of Donegal Mutual Insurance Co.
According to a news release contained in a Securities and Exchange Commission filing, Shepard said he would approach at least 18 property and casualty insurance companies to gauge their interest in acquiring Donegal Group through a merger or an affiliation with Donegal Mutual Insurance Co.
Shepard estimated the bonus would be between $5 million and $20 million, depending on negotiated terms.
Shepard owns 17.6 percent of Donegal Group's Class A stock and 7.12 percent of its Class B stock, according to Monday's SEC filing. For almost a year, he made repeated attempts to purchase more stock in the company for a larger voting stake, but he dropped that attempt in February.
He has been openly critical of the company's board of directors and has directed most of his criticism toward Don Nikolaus, Donegal's CEO and chairman. He repeatedly has claimed Nikolaus and the board haven't looked out for the best interests of the company's shareholders.
"In my opinion, Donegal Group is not the fiefdom for" the Nikolaus family, Shepard said in Monday's release. "In my opinion, shareholders of Donegal Group have suffered long enough through his greed and lack of commitment to shareholder value."
Donegal Group Inc. comments on Shepard's actions only through news releases and SEC filings, but it hadn't released any information Monday morning.