Canadian Underwriter
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Fairfax reduces Zenith stake


June 16, 2004   by Canadian Underwriter


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Fairfax’s TIG Insurance is reducing its stake in California-based Zenith National Insurance Corp. through the sale of 3.1 million common shares. Fairfax has filed a registration statement with the U.S. Securities Exchange Commission (SEC) to sell the shares, plus offer an additional 400,000 Zenith shares as an over-allotment option to underwriters. Fairfax currently owns 7.8 million shares of Zenith.
“Fairfax determined to effect this sale so its TIG Insurance subsidiary, which as a run-off operation pays claims but earns only minimum premium revenue, could benefit from monetizing its investment holding of 2,966,449 shares of Zenith common stock,” notes a Fairfax release. “The sale of a small additional number of its shares of Zenith common stock will lower its investment to less than 25% of the outstanding shares of Zenith, as a result of which Zenith may be able to lower its deductible under the Terrorism Risk Insurance Act of 2002 (TRIA).”
Fairfax says it does not intend to sell any more of its stake in Zenith, and as part of the agreement is prohibited from doing so for 180 days following the final prospectus.


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