Batus Takes Swing at Qualifications of Farmers’ Board

Batus Inc. took an aggressive new tack Thursday in its hostile takeover bid for Farmers Group, criticizing the qualifications and activities of directors of the Los Angeles-based insurance holding company.

As Farmers had already revealed in its April 4 proxy statement, two law firms and a construction company affiliated with three outside directors received fees from Farmers totaling $7.9 million last year. Batus raised the issue Thursday in Idaho Insurance Department hearings on the proposed acquisition and highlighted it in a subsequent press release.

Louisville, Ky.-based Batus also pointed out that most members of current and past Farmers boards have never worked for an insurance company. One director who did, Farmers General Counsel Jason L. Katz, “worked for Mission Insurance Co., which had such serious financial difficulties that it became insolvent,” Batus said. Katz could not be reached for comment.

Until now, Batus has focused on answering Farmers’ charges about Batus’ tobacco operations and on promoting the financial details of its $4.35-billion bid. Batus Spokesman Wilson Wyatt said Thursday’s press release was not “a change in tactics” but an effort to report developments at the hearings.

A Farmers spokesman called the statement “ludicrous,” adding: “If they are alleging our board is not qualified to direct Farmers, that is clearly disproved by looking at our results, which have consistently been far above average.”