8-K

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): June 30, 2010

Bancinsurance Corporation
__________________________________________
(Exact name of registrant as specified in its charter)

Ohio	0-8738	31-0790882
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)
250 East Broad Street, 7th Floor, Columbus, Ohio		43215
_________________________________ (Address of principal executive offices)		___________ (Zip Code)

Registrant’s telephone number, including area code: 614-220-5200

Not Applicable
______________________________________________
Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01 Other Events.

As previously reported, (a) on March 22, 2010, the Board of Directors (the "Board") of Bancinsurance Corporation (the "Company") received a letter (the "Original Proposal Letter") from John S. Sokol setting forth a non-binding proposal by which Falcon Equity Partners, L.P., Barbara K. Sokol, John S. Sokol, James K. Sokol, Carla A. Sokol, Daniel J. Clark, Joseph E. LoConti, Edward Feighan, Charles Hamm and Matthew D. Walter (collectively, the "Proposing Persons") would acquire all of the outstanding shares of common stock of the Company that are not owned by a Proposing Person at a cash purchase price of $6.00 per share (the "Original Proposal") and, following the closing of the proposed transaction, the Company’s shares would no longer be registered with the Securities and Exchange Commission and the Company would no longer be a reporting company or have any public shareholders, and (b) on April 21, 2010, the Board received a letter from John S. Sokol informing the Board that the Original Proposal wou ld remain open on the terms and conditions set forth in the Original Proposal Letter until the Proposing Persons inform the Board otherwise (the "Extension Letter").

On June 30, 2010, the Board received a letter (the "Revised Proposal Letter") from John S. Sokol informing the Board that (a) the Proposing Persons are increasing the proposed cash purchase price to $7.25 per share and (b) the closing of the proposed transaction is conditioned on the Proposing Persons obtaining sufficient third-party financing to fund all or a portion of the purchase price on acceptable terms (the "Revised Proposal"). The other terms of the Original Proposal remain as set forth in the Original Proposal Letter (as amended by the Extension Letter). A copy of the Revised Proposal Letter is attached as Exhibit 99.1 to this Current Report on Form 8-K.

The Special Committee of independent directors (the "Special Committee") formed by the Board to review and evaluate the Original Proposal is in the process of re viewing and evaluating the Revised Proposal. No assurance can be given that an agreement on terms satisfactory to the Special Committee or the Board will result from the Revised Proposal or that any transaction will be completed.

Forward-Looking Information
Certain statements made in this Current Report on Form 8-K are forward-looking and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements convey our current expectations or forecast future events. All statements contained in this Form 8-K, other than statements of historical fact, may be considered forward-looking statements. The words "may," "continue," "estimate," "intend," "plan," "will," "believe," "project," "expect," "anticipate" and similar expressions generally identify forward-looking statements but the absence of these words does not necessarily mean that a statement is not forward-looking. Forward-looking statements are not guarantees of future performanc e and involve risks and uncertainties that may cause actual results to differ materially from those statements. For a discussion of these and further risks and uncertainties, please see our filings with the Securities and Exchange Commission. We file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy any reports, statements or other information that we file at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C., 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. Our public filings with the SEC also are available at the Web site maintained by the SEC at http://www.sec.gov.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

99.1 Letter from Mr. Sokol to the Company’s Board of Directors, dated June 30, 2010.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Bancinsurance Corporation
July 1, 2010	By:	/s/ Matthew C. Nolan
		Name: Matthew C. Nolan
		Title: Vice President, Chief Financial Officer, Treasurer and Secretary

Exhibit Index

Exhibit No.	Description
99.1	Letter from Mr. Sokol to the Company’s Board of Directors, dated June 30, 2010.

EX-99.1

June 30, 2010

Board of Directors
Bancinsurance Corporation
250 East Broad Street
7th Floor
Columbus, Ohio 43215

Gentlemen:

I refer to my letter to you dated March 22, 2010 (the “Proposal Letter”), in which I described a proposal (the “Proposal”) pursuant to which an investor group organized and led by me (the “Investor Group”) would acquire all of the outstanding shares of common stock, without par value (the “Common Stock”), of Bancinsurance Corporation (the “Company”), other than those shares owned by the Investor Group, at a purchase price of $6.00 per share in cash.

I am now pleased to inform you that the Investor Group is willing to increase the proposed purchase price to $7.25 per share. This represents a 20.8% increase over our previous offer. Except as described below, the terms of the Proposal remain as set forth in the Proposal Letter.

The Investor Group now expects to use third-party financing to fund all or a portion of the purchase price of the Common Stock. Closing of the proposed transaction will be conditioned on the Investor Group obtaining this financing on acceptable terms.

We believe the proposed purchase price is fair to, and in the best interest of, Company shareholders other than members of the Investor Group (the “Public Investors”). Among other things, the offer price represents substantial premiums over the current, recent and historical market prices of the Common Stock. These include:

• premiums of approximately 20.8% and 21.4%, respectively, over the closing price and the 20-day volume-weighted average closing price of the Common Stock on June 29, 2010;

• premiums of approximately 45.0% and 42.5%, respectively, over the closing price and the 20-day volume-weighted average closing price of the Common Stock on March 19, 2010, the time of our initial offer;

• premiums ranging between 30.2% and 46.1% over the 1-year, 2-year, 3-year, 4-year and 5-year volume-weighted average closing prices of the Common Stock on June 29, 2010; and

• a premium of 7.4% over the Common Stock’s 5-year high closing price of $6.75.

The fact that our offer price represents a significant premium over all reasonable measures of the Common Stock’s market price over the last five years underscores our offer’s inherent fairness and attractiveness to the Public Investors. Similarly, we believe our offer price is fair and very attractive to the Public Investors when evaluated using factors other than market price. For example:

• Based on a discounted cash flow analysis that yields a going-concern value of approximately $6.74 per share, our offer price represents a 7.6% premium over the Company’s going-concern value.

• The most recent price a member of the Investor Group paid for the Common Stock was $5.31 per share, on May 25, 2010. Our offer price represents a 36.5% premium over this price.

• Our offer price represents modest discounts of 14.9% and 20.2%, respectively, to the Company’s book value per share as of December 31, 2009 and March 31, 2010. We believe these discounts are appropriate, fair and reasonable in light of the nature of the Company and its industry, the structure of the proposed transaction, and current market conditions. Among other things, in our experience, public insurance companies typically trade at a substantial discount to book value.

Moreover, in light of the limited trading market for the Common Stock and the lack of analyst and institutional investor interest in it, we believe the proposed transaction represents a particularly attractive and uncommon opportunity for the Public Investors to receive liquidity for their shares.

As you know, the Investor Group holds approximately three-quarters of the outstanding shares of Common Stock. The Investor Group is interested only in acquiring the publicly held shares of Common Stock, and does not intend to sell its stake in the Company or consider any strategic transaction involving the Company that would reduce its ownership stake in the Company.

The Investor Group recognizes that it is in all affected parties’ best interest to allow the special committee of the Board of Directors of the Company (the “Special Committee”) time to conduct a thorough evaluation of our revised proposal. Consequently, while we reserve the right to withdraw the Proposal at any time in our sole discretion, this revised proposal is not subject to a specific deadline.

While we have not set a specific deadline for the Company to accept our revised proposal, we strongly believe that time is of the essence in this matter. As you know, the financial markets have been tremendously volatile since we made our initial Proposal, and an adverse change in them may affect our ability to obtain financing or make a transaction at the current offer price unattractive to us. Likewise, the Investor Group includes a number of independent individuals with different interests; and one or more of these individuals may become unwilling to proceed with the transaction if they do not see palpable progress in a reasonable time. Consequently, we urge the Special Committee to complete its evaluation as expeditiously as possible.

We expect to make appropriate filings on Schedule 13D disclosing this letter.

No binding obligation on the part of the Company or the Investor Group will arise with respect to the Proposal or any transaction unless a definitive merger agreement has been executed and delivered.

We and our representatives will be available to meet with the Special Committee and its representatives to discuss this proposal further. Please do not hesitate to let me know if there is anything we can provide to help the Special Committee complete its evaluation. The other members of the Investor Group and I thank you for considering our proposal and are available at your convenience if further discussion is needed.

Sincerely,

John S. Sokol