Stewart Information Soars After Accord With ActivistsSarah Jacob
Stewart Information Services Corp. gained the most since July 2012 after the title insurer defused a fight with activist investors by naming new directors and announcing plans to buy back more than 8 percent of its shares.
Stewart advanced 14 percent to $36.24 at 4:15 p.m. in New York and traded as high as $36.66 during the session. The Houston-based firm said today in a statement it will repurchase $70 million of stock by the end of next year. Stewart has a market value of about $815 million.
The buyback helps Chief Executive Officer Matthew W. Morris resolve a dispute with Foundation Asset Management LLC and Engine Capital LP, which had sought to nominate directors while pushing Stewart to boost the share price. The investors, who own an 8.5 percent stake, promised in today’s accord not to solicit proxies for the 2014 annual meeting, the company said.
In return, Stewart agreed to nominate two independent directors including Glenn C. Christenson, managing director of Velstand Investments LLC, and Arnaud Ajdler, managing partner of Engine Capital. Stewart also vowed to cut pretax costs by $25 million annually and begin hosting earnings calls starting with this year’s first quarter.
Scott Bisang, a spokesman for Stewart, declined to elaborate. Officials at Foundation and Engine Capital didn’t respond to inquiries.
Stewart’s fourth-quarter profit fell 72 percent to $17.5 million, or 72 cents a share, from $61.8 million, or $2.56 a share, a year earlier, according to a separate statement today.