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February 18, 2010 4:27 PM
Shearman, Dewey Tapped for $1.4 Billion Insurance Deal
Posted by Claire Zillman
Canadian insurer Fairfax Financial Holdings Limited announced Thursday that it plans to buy all outstanding shares of Zenith National Insurance Corporation for roughly $1.4 billion, according to a statement released by Fairfax. The Toronto-based company bought a 38.4 percent stake in Zenith in 1999 for $28 per share, according to Bloomberg.
Zenith, based in Woodland Hills, California, specializes in workers' compensation insurance. After the merger's close, which is expected in the second quarter of this year, Zenith will operate as a wholly owned subsidiary of Fairfax.
The $38-per-share price Fairfax will pay for Zenith is a 34 percent premium on Zenith's 30-day average closing price for a period that ended Wednesday. Fairfax will finance the acquisition with holding company cash and subsidiary dividends. It also will raise $200 million through an equity issue, according to the company's statement.
Fairfax tapped Shearman & Sterling to advise on the matter. The firm's team was led by partners Adam Givertz, Christopher Cummings, Laurence Crouch, John Cannon, and counsel John Morrison and Stephen Centa. The firm has been a longtime outside counsel to Fairfax, according to Givertz. Most recently, Shearman represented Fairfax in its purchase of Odyssey Re Holdings in September.
Torys served as Canadian counsel on the deal, according to Fairfax. The names of the attorneys working on the deal were not available as of the time of this posting.
A Dewey & LeBoeuf team headed by partners Alexander Dye and Lorenzo Borgogni and including associate Rajab Abbassi advised Zenith on the deal. Dye has represented Zenith on various matters since the mid-1990s.
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