San Diego, Sept. 29, 2011 (Shareholders Foundation) -- The announcement that Harleysville Group Inc. agreed to be acquired by Nationwide Mutual Insurance Company for $60.00 per share prompted an investigation on behalf of investors of Harleysville Group Inc. (NASDAQ:HGIC) concerning whether the offer to acquire Harleysville Group Inc. and the buyout process are unfair to investors of NASDAQ:HGIC and whether certain of its officers and directors or others breach their fiduciary duties owed investors in Harleysville Group (HGIC) shares.
The investigation by a law firm concerns whether Harleysville Group Inc. (Public, NASDAQ:HGIC, certain of its officers and directors, and/or others breached their fiduciary duties owed Harleysville Group Inc. (Public, NASDAQ:HGIC) investors in connection with the proposed acquisition.
On September 29, 2011, Nationwide Mutual Insurance Company and Harleysville Mutual Insurance Company and Harleysville Group Inc.(NASDAQ:HGIC) announced that they have entered into an agreement under which Harleysville will combine with Nationwide. Under the terms of the agreement, Harleysville Mutual Insurance Company policyholders will become policyholders and members of Nationwide Mutual Insurance Company, and Nationwide Mutual Insurance Company will acquire all of the publicly held shares of common stock of Harleysville Group Inc. for $60.00 per HGCI share in cash.
However, in connection with the merger of Harleysville Group, Harleysville Mutual Insurance Company has already entered into a voting agreement with Nationwide Mutual Insurance Company under which it has agreed to vote its 54% interest in Harleysville Group Inc.(NASDAQ:HGIC) in favor of the merger.
Therefore, the investigation concerns whether Nationwide Mutual Insurance Company would underpay for NASDAQ:HGIC shares, thus unlawfully harming Harleysville Group (HGIC) stockholders, and whether the Harleysville Group Board of Directors undertook an adequate sales process and in particular breached their fiduciary duties to Harleysville Group Inc. (NASDAQ:HGIC) shareholders by failing to adequately shop the Company before entering into this transaction.
Harleysville Groups financial performance over the past four years has been relatively consistent. Its annual Revenue ranged over the past four years from $962.01million to lately $986.27million and its Net income ranged from $42.32million to $100.05million.
A potential securities class action lawsuit would seek to maximize the amount of money and information HGIC shareholders would receive in a buyout, so the law firm.