LOS ANGELES, Feb. 22, 2010 (GLOBE NEWSWIRE) -- The Shareholders Foundation, Inc. announces that a lawsuit has been filed in California State Court on behalf of current investors in Zenith National Insurance Corp. (NYSE:ZNT), who purchased their ZNT shares before February 18, 2010, over alleged breach of their fiduciary duties.
On Thursday, Feb 18, 2010, Zenith National Insurance Corp. (NYSE:ZNT) and Fairfax Financial Holdings Limited (TSX:FFH) (TSX:FFH.U) announced that Fairfax Financial Holdings Limited and Zenith National Insurance Corp. have entered into a $1.4 billion merger agreement pursuant to which Fairfax Financial Holdings will acquire for $38.00 per share in cash all of the outstanding shares of Zenith National Insurance Corp common stock (ZNT), which it does not currently own. According to Zenith National Insurance Corp. (ZNT) the board of directors of Zenith unanimously approved the merger agreement and the offer represents a premium of 31.4% to the closing price of Zenith common stock on February 17, 2010, the last trading day prior to this announcement, and a 34.0% premium to the 30-day average closing price for the period ending on February 17, 2010. The merger consideration of $38.00 per share also represents a premium of 34.5% to Zenith's book value as of December 31, 2009.
But shares of Zenith National Insurance Corp. (ZNT) traded slightly over $38 per share after the announcement and at almost $29 per share the day before the news and ZNT shares reached $32.24 per share in October 2009, $41.08 per share in September 2008, $43.93 per share in Jan. 2008, and over $50 per share in 2007.
According to the complaint the plaintiff alleges that the transaction substantially undervalues Zenith National Insurance shares and that Zenith National Insurance is selling itself too cheaply, through an unfair process, to Fairfax Financial Holdings.
Those who currently are investors in shares of Zenith National Insurance Corp. (NYSE:ZNT) and purchased their shares before Feb. 18, 2010, should contact the Shareholders Foundation, Inc. by e-mail at mail@shareholdersfoundation.com or call +1 (858) 779-1554.
The Shareholders Foundation, Inc. is an investor advocacy group which does research related to shareholder issues and informs investors of securities class actions, settlements, judgments, and other legal related news to the stock/financial market. The group offers help, support, and assistance for every shareholder, and investors find answers to their questions and equitable solutions to their problems. The Shareholders Foundation, Inc. is not a law firm. The information is provided as a public service. It is not intended as legal advice and should not be relied upon.
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