Los Angeles-based health care liability insurer SCPIE Holdings Inc. announced today it has agreed to be acquired by The Doctors Company, a physician-owned medical malpractice carrier, for approximately $281 million.

The firm said Doctors, with headquarters in Napa, Calif., has agreed to pay $28 per share in cash, a price representing a premium of approximately 27 percent over yesterday's $22.09 per share closing price of SCPIE before the announcement. If completed the deal would create the largest physician medical malpractice insurer in the nation.

Dr. Mitchell S. Karlan, SCPIE chairman, said: "Our board of directors believes this transaction delivers significant value to our stockholders. Additionally, SCPIE will be joining one of the largest and most respected professional liability companies in the nation.

He added, "The Doctors Company possesses similar values as our company, including the development of a loyal customer base, providing a challenging workplace, and a commitment to quality products and services."

Dr. Richard E. Anderson, MD, The Doctors Company chairman and chief executive officer, said the partnership of two physician-founded companies would combine the strengths of both organizations.

"Together, we can be even more effective as we continue to aggressively defend claims, lead tort reform and patient safety efforts, and provide outstanding customer service and exemplary member benefits," he added.

It was announced that following the merger, Doctors will expand its market leadership in California to nearly 19,000 physicians and become the largest insurer of physician and surgeon professional liability insurance in the United States.

SCPIE said its board has approved the proposed transaction and will recommend that stockholders approve the merger. The transaction is subject to customary closing conditions, including the receipt of regulatory approvals and approval by a majority of SCPIE's stockholders.

Deutsche Bank Securities Inc. acted as the financial advisor to SCPIE in the transaction, and Latham & Watkins LLP and Richards, Layton & Finger LLP provided legal advice to SCPIE Holdings Inc. Sonnenschein Nath & Rosenthal LLP provided legal advice to the independent directors of SCPIE Holdings Inc. Fox-Pitt Kelton Cochran Caronia Waller acted as the financial advisors to Doctors and Thelen Reid Brown Raysman & Steiner LLP provided legal advice.

SCPIE said it will hold a conference call tomorrow to discuss the transaction on About SCPIE Holdings.

SCPIE, founded in 1976 (the same year Doctors was established), provides liability insurance for physicians, oral and maxillofacial surgeons, and other health care providers, as well as medical groups and healthcare facilities.

Doctors lists $2.2 billion in assets and 32,000 physician members nationwide.

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Doctors Co. Buys SCPIE For $281 Million

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