Attached files
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| EX-2.1 - EXHIBIT 2.1 - PMA CAPITAL CORP | ex2-1.htm |
| EX-99.1 - EXHIBIT 99.1 - PMA CAPITAL CORP | ex99-1.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 9, 2010
PMA Capital Corporation
(Exact name of registrant as specified in its charter)
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Pennsylvania
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001-31706
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23-2217932
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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380 Sentry Parkway
Blue Bell, Pennsylvania
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19422
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(Address of principal executive offices)
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(Zip Code)
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Registrant’s telephone number, including area code:
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(610) 397-5298
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(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
þ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
On June 9, 2010, PMA Capital Corporation, a Pennsylvania corporation (“PMA”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Old Republic International Corporation, a Delaware corporation (“Old Republic”), and OR New Corp., a wholly owned subsidiary of Old Republic (“Merger Sub”) formed specifically for the purpose of the proposed merger. The Merger Agreement provides, upon the terms and subject to the conditions set forth in the Merger Agreement, for a merger of PMA and Merger Sub with PMA being the surviving corporation and becoming a wholly owned subsidiary of Old Republic (the “Merger”).
At the effective time of the Merger, each share of PMA common stock issued and outstanding immediately prior to the effective time will be automatically cancelled and converted into the right to receive 0.55 shares (the “Exchange Ratio”) of common stock of Old Republic and all outstanding stock options, restricted shares and other equity awards will be converted, based on the Exchange Ratio, into stock options, restricted shares and equity awards covering Old Republic common stock. The Exchange Ratio will be adjusted if the volume weighted average price per share of Old Republic common stock for the 20 consecutive trading days ending on and including the fifth trading day prior to, but not including, the closing date of the Merger exceeds $17.00 or is less than $12.50, but in no event will the Exchange Ratio exceed 0.60 or be less than 0.50.
PMA and Old Republic have made certain representations and warranties in the Merger Agreement. The representations and warranties are as of specific dates and were made solely for the benefit of the parties to the Merger Agreement. The representations and warranties were negotiated with the principal purpose of establishing the circumstances under which a party may have the right not to close the Merger if the representations and warranties of the other party prove to be untrue and to allocate risk between the parties, rather than establishing matters as facts. The representations and warranties may be subject to a contractual standard of materiality different from those generally applicable under the securities laws. Securityholders should not rely on the representations and warranties or any description of the representations and warranties as characterizations of the actual state of facts or condition of PMA or Old Republic.
The closing of the Merger is subject to customary conditions, including approval of PMA’s shareholders and receipt of antitrust and insurance regulatory approvals. PMA has agreed to hold a meeting of its shareholders to consider and vote upon the approval of the Merger and, subject to certain exceptions, to recommend approval of the Merger to its shareholders. In addition, PMA has agreed that it will not solicit or facilitate inquiries or proposals relating to, or, subject to certain exceptions, engage in discussions or negotiations regarding, alternative business combination transactions or other transactions through which a third party would acquire stock representing 20% or more of the voting power of PMA or any subsidiary of PMA.
The Merger Agreement provides certain termination rights for both PMA and Old Republic, including the right of PMA to terminate the Merger Agreement so that it can enter into an agreement providing for a “Superior Proposal” (as that term is defined in the Merger Agreement). In the event the Merger Agreement is terminated because PMA’s board of directors fails to recommend approval of the Merger, changes its recommendation or approves or recommends an alternative proposal or transaction, PMA will be required to pay Old Republic a termination fee of $8 million.
In the event that PMA receives an alternative proposal and the Merger Agreement is then terminated (i) by Old Republic due to a breach of representations, warranties or covenants by PMA, (ii) by either party because shareholder approval is not obtained at the meeting called to approve the Merger, or (iii) by either party because the Merger has not closed by December 31, 2010 and PMA has materially breached the Merger Agreement or the approval of PMA’s shareholders has not been obtained, then PMA will be required to reimburse Old Republic for expenses incurred in connection with the Merger. In that event, and if PMA consummates an alternative transaction within six months following termination, PMA would be required to pay Old Republic an $8 million termination fee less the amount of any expenses previously reimbursed.
The foregoing description of the Merger and the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement attached as Exhibit 2.1 and incorporated into this Current Report on Form 8-K by reference.
Important Information for Investors and Shareholders
In connection with the proposed transaction, PMA will file a proxy statement with the Securities and Exchange Commission (the “SEC”). INVESTORS AND SHAREHOLDERS ARE ADVISED TO READ THE PROXY STATEMENT AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE MERGER, PMA AND OLD REPUBLIC.
Investors and shareholders may obtain free copies of the proxy statement and other documents filed by PMA (when available), at the SEC’s web site at www.sec.gov or at PMA’s web site at www.pmacapital.com. The proxy statement and such other documents may also be obtained, when available, for free from PMA by directing such request to Investor Relations, PMA Capital Corporation, 380 Sentry Parkway, Blue Bell, Pennsylvania, telephone: 610-397-5298.
PMA and its directors, executive officers and other members of its management and employees may be deemed to be participants in the solicitation of proxies from PMA’s shareholders in connection with the proposed transaction. Information concerning the interests of those persons is set forth in PMA’s proxy statement relating to the 2010 annual meeting of shareholders and annual report on Form 10-K for the fiscal year ended December 31, 2009, both filed with the SEC, and will also be set forth in the proxy statement relating to the transaction when it becomes available.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
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Exhibit No.
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Description
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* Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. PMA agrees to furnish supplementally a copy of the omitted schedules to the SEC upon request.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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PMA Capital Corporation
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June 10, 2010
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By:
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/s/ Stephen L. Kibblehouse
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Name:
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Stephen L. Kibblehouse
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Title:
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Executive Vice President & General Counsel
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Exhibit Index
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Exhibit No.
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Description
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* Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. PMA agrees to furnish supplementally a copy of the omitted schedules to the SEC upon request.