National Atlantic: Is It Really Worth This Price?

I will have a fuller post after I talk with Jim Gorman, CEO of National Atlantic (NAHC). If he thinks his company, which he owns around 13% of is only worth $6.25/share, that is a real surprise to me, and inconsistent with all of the other discussions that I have had with him over the last four years. A few of you have asked me about appraisal rights. Really, we should talk about this later if the deal gets approved; it’s too early to speculate there. For those that remember my early posts at RealMoney on the Mony Group acquisition, remember that book value is sometimes illusory. I don’t think that is the case here, but let me talk with Jim Gorman, and listen to the earnings call on Monday. If they deliver another bomb, like last quarter, maybe $6.25 is generous.

Full disclosure: long NAHC

Comments

[burkehayden:]

Let's be real. NAHC played with reserves last year by taking down $30 million for no real cause. Some have come back, but not all. The asset side is all good here. This is a liability story. Should the $6.25 offer reflect true book value then shareholder's and the SEC should have a big issue. I would ascribe to the liability side Gorman who has been untruthful with his "partners"-shareholder... who own 87% of this company. Ask him why he thinks he deserves to walk away with $9 million on his $1.5 million investment in NAHC (along with continuing his employment contract). Ask him why his fellow officers are entitled to have their employment contracts honored by Palisades? (what is the cost of that portion of the contract to shareholders). Ask him why the very nature of his agreement was changed while shareholder values sunk? Ask him why shareholders should pay for his "tail" protection on the D & O policy.(he gets $9 million, let him pay for it).

2008 Mar 16 06:19 PM