Zenith National Insurance Corp. Investor Files Lawsuit Against ZNT Board

If you are currently a long term investor in shares of Zenith National Insurance Corp. (Public, NYSE:ZNT), who purchased their ZNT shares before February 18, 2010, and those who have additional information relating the investigations, have certain options and should contact the Shareholders Foundation.

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Company Name(s): 
Zenith National Insurance
Case Name: 
Zenith National Insurance Deal Case 02/22/2010
Case Status: 
Lawsuit Filed
Affected Securities
NYSE: ZNT
Lawsuit Overview
Type of Lawsuit: 
Mergers and Acquisition
Date Filed: 
02/22/2010
Class Period End: 
02/18/2010
Court of Filing: 
California State Court
Summary: 

An Zenith National Insurance Corp investor filed a lawsuit on behalf of current long term investors in Zenith National Insurance Corp. (Public, NYSE:ZNT), who purchased their ZNT shares before February 18, 2010, in State Court over alleged breaches of fiduciary duty in connection with an alleged unfair takeover.

According to the complaint the plaintiff alleges breaches of fiduciary duty by the Board of Directors of Zenith National Insurance arising out of their attempt to sell Zenith National Insurance Corp. (Public, NYSE:ZNT) too cheaply to Fairfax Financial Holdings Limited. On Thursday, Feb 18, 2010, Zenith National Insurance Corp. (NYSE: ZNT) and Fairfax Financial Holdings Limited (TSX: FFH and FFH.U) announced that Fairfax Financial Holdings Limited and Zenith National Insurance Corp. have entered into a $1.4 billion merger agreement pursuant to which Fairfax Financial Holdings will acquire for $38.00 per share in cash all of the outstanding shares of Zenith National Insurance Corp common stock (ZNT), which it does not currently own. According to Zenith National Insurance Corp. (ZNT) the board of directors of Zenith unanimously approved the merger agreement and the offer represents a premium of 31.4% to the closing price of Zenith common stock on February 17, 2010, the last trading day prior to this announcement, and a 34.0% premium to the 30-day average closing price for the period ending on February 17, 2010. The merger consideration of $38.00 per share also represents a premium of 34.5% to Zenith's book value as of December 31, 2009.

But shares of Zenith National Insurance Corp. (ZNT) traded over $38 per share after the announcement, and at almost $29 per share the day before the news. ZNT reached $32.24 per share in October 2009, $41.08 per share in September 2008, $43.93 per share in Jan 2008, and over $50 per share in 2007. Zenith National Insurance Corp. reported in 2007 Total Revenue of $873.75million with a $233.90million Net Income, in 2008 Total Revenue of $682.85million with a Net Income of $95.30million, and in 2009 Total Revenue of $584.85million with a Net Income of $34.40million.