Biglari Holdings Again Seeks to Take Over Fremont Michigan InsuraCorp

Texas-based Biglari Holdings, which runs Steak n Shake and other restaurants, is making another bid for the Michigan property/casualty insurer, Fremont Michigan InsuraCorp. Inc.

The San Antonio holding company has proposed to acquire 100 percent of the stock of Fremont Michigan that it does not already own for $29 per share in cash. The company said the purchase price represents a 41 percent premium over the closing price of Fremont’s common stock on Oct. 11, 2010.

Fremont confirmed that its board received the letter from Biglari Holdings seeking to acquire the remaining shares of Fremont that Biglari Holdings does not already own. The company said it is reviewing the offer.

“Our board, management team, associates and agents remain focused on continuing to grow our business and maximizing the value of the company,” said Richard E. Dunning, president and CEO of Fremont in a company announcement. “Our board takes its fiduciary duty seriously, and we will carefully review this matter in light of its impact on our shareholders, and all our stakeholders, as well as current laws and regulations.”

In December 2009, Fremont Michigan’s board rejected an unsolicited proposal from Biglari seeking to acquire control of the company.

In April, lawmakers passed and Gov. Jennifer Granhom signed legislation written specifically to make it more difficult for Biglari to take over the insurer. The legislation requires that a perceived hostile takeover of a small insurer be approved by two-thirds of the shareholders of the targeted company, rather than by a simple majority.

Lawmakers have been concerned that Biglari would move the insurer’s 75 employees out of the state while Biglari has said it has no plans to do that.