The Doctors Company To Acquire APCapital; Law Firm Investigates

The Doctors Company will acquire American Physicians Capital Inc. (APCapital) for approximately $386 million, the companies have announced.

APCapital, an East Lansing, Mich.-based regional provider of medical professional liability insurance, said its board approved the deal for $41.50 per share in cash, and that the board is recommending that its shareholders approve the transaction.

The Doctors Company, based in Napa, Calif., is a national insurer of physician and surgeon medical liability.

"We are extremely pleased to announce this partnership between two physician-founded companies and we look forward to delivering enhanced value to our member insureds through the financial strength of a combined organization with a relentless commitment to protecting, defending and rewarding the practice of good medicine," said Richard E. Anderson, MD, FACP, chairman and CEO of The Doctors Company.

Meanwhile, New York law firm Levi & Korsinsky said it is investigating APCapital's board of directors for "possible breaches of fiduciary duty and other violations of state law" in connection with the announced deal.

The law firm said, "The investigation concerns whether the APCapital board of directors breached their fiduciary duties to APCapital stockholders by failing to adequately shop the company before entering into this transaction and whether Doctors Company is underpaying for APCapital shares, thus unlawfully harming APCapital stockholders."

In announcing the transaction, the Doctors Company and APCapital said the $41.50 per share in cash purchase price represents a premium of approximately 31 percent over the $31.76 per share closing price of APCapital on July 7--the last trading day prior to the transaction announcement.

The companies said the transaction is expected to close in the 2010 fourth quarter and is subject to regulatory approval and other closing conditions, including APCapital shareholder approval.