By Alison Frankel
Feb 28 (Reuters) – If the allegations of the minority shareholders of a small Ohio property insurer called National Interstate are true, the conduct of National Interstate’s majority owner, Great American Insurance, is egregious enough to make even Charles Ergen blush. A subsidiary of the insurance megalith American Financial, Great American proposed in early February a surprise $28-per-share tender offer to acquire the 48 percent stake in National Interstate that it doesn’t already own. Even its own financial advisor, Duff & Phelps, considered that price inadequate, as did the four independent board members of National Interstate, who urged Great American to establish a special committee to negotiate a fair price. That suggestion went nowhere, but earlier this month Great American and American Financial boosted the bid to $30 – so long as the independent directors agreed to support the sweetened offer. They protested to no avail: Six National Interstate directors in the sway of Great American and American Financial voted to announce a neutral position on the tender offer, according to an account of the dispute by The Wall Street Journal’s Liz Hoffman, and the bid went public.