The board of directors at Donegal Group Inc. has rejected another offer from Florida-based activist shareholder Gregory Shepard, this time one Shepard termed an amicable resolution to his problems with the Lancaster County-based company.
According to a letter written to Shepard from Donegal Group lawyer Joseph A. Tate, the board informed Shepard on July 16 it decided to reject Shepard’s latest offer that would have increased his share in the company’s Class A stock but would have seen him sell his Class B stock.
If the offer had been accepted, Shepard would have sold his 397,100 Class B shares to a third party or to Donegal Mutual Insurance Co., owner of 76 percent of Donegal Group Class B stock, according to Shepard.
Donegal Mutual is a subsidiary of Donegal Group.
Shepard also would have increased his stake in Donegal Group Class A stock by buying 3,971,000 shares at market prices, a tender offer or private acquisitions. He also wanted a seat on the board of directors for him or a representative.
The board met June 26 to discuss Shepard’s offer with “due discussion and deliberation” and decided to reject Shepard’s offer, according to a filing with the Securities and Exchange Commission.
This was the fourth time since October that a Shepard offer to the board has been rejected.