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| | Zenith National Insurance Company Agrees To Be Bought By Fairfax Financial Holdings
By Lonce LaMon - February 20, 2010Zenith National Insurance Company, headquartered in Woodland Hills, California, and run by the inimitable Chief Executive Stanley Zax, has agreed to be acquired by its biggest shareholder, Fairfax Financial Holdings of Toronto, Canada, for nearly 1.3 billion dollars in cash.
Stanley Zax, who in a recent telephone conversation with this writer last Fall, humbly described himself not as a success, but as a “survivor”, will continue to run Zenith with his current management with no changes in his operating philosophy, according to Fairfax Financial Holdings.
This acquisition deal must be approved by Zenith shareholders, and the California Department of Insurance.
Zenith National Insurance Company is the second largest workers’ compensation insurance premium writer in the state of California next to California’s State Compensation Insurance Fund. Fairfax Financial Holdings, which presently owns 8.2% of Zenith, will pay $38 a share for the stock it doesn't already own. This deal values Zenith at $1.4 billion. Ten years ago, Fairfax Financial bought and then owned much more stock of Zenith than it owns today, but sold a bulk of it for a profit in 2005.
Fairfax’s plans are to fund the acquisition with cash and proceeds from a planned 200 million dollar stock offering.
Readers may write to writer Lonce LaMon at lonce@adjustercom.com
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