Gregory Shepard Offers For Donegal Group - Quick Facts

(RTTNews) - Gregory Mark Shepard announced Monday that he has sent a letter to the Boards of Directors of Donegal Group Inc. (DGICA, DGICB) and Donegal Mutual Insurance Company proposing an amicable transaction.

In his letter, Shepard said he would offer to purchase the 957,136 shares of Class B Common Stock of Donegal Group that are not already owned by him or Donegal Mutual at a negotiated price within a range of $33 - $37 per share, and a mutual property and casualty insurance company would purchase the 9.02 million shares of Class A Common Stock of Donegal Group that are not already owned by him or Donegal Mutual.

Shepard noted that he knows of two U.S.-based mutual property and casualty insurers, both of which are much larger than Donegal Group and Donegal Mutual and rated A or higher by A.M. Best, who would be interested in such a transaction.

Alternatively, if Donegal Group and Donegal Mutual elect to enter into a global transaction with an acquiring mutual property and casualty insurance company, Shepard said he would agree to accept whatever price per share of Class A Shares that are not already owned by him or Donegal Mutual that Donegal Group negotiates with the acquirer as the price per share for both his Class A Shares and Class B Shares.

If the Boards of Directors of Donegal Group and Donegal Mutual accept the amicable transaction proposed in his letter, Shepard stated that he would suspend his plans to acquire up to 962,636 additional Class B Shares in the open market and privately negotiated transactions.

On October 4, 2013, the last full trading day before Shepard announced his proposal, the closing prices for Class A Shares and Class B Shares were $14.30 and $18.56, respectively.