Glass Lewis and Egan-Jones recommend against Tiptree’s Fortegra sale

DALLAS - Two prominent proxy advisory firms, Glass Lewis and Egan-Jones, have recommended that Tiptree Inc. (NASDAQ:TIPT) shareholders vote against the proposed sale of its subsidiary The Fortegra Group to DB Insurance Co., Ltd. at the upcoming December 3, 2025 special meeting. Tiptree, with a market capitalization of approximately $704 million, has maintained dividend payments for 11 consecutive years according to InvestingPro data.

Veradace Partners L.P., which owns 5.1% of Tiptree’s outstanding common stock, announced the recommendations on Monday and urged fellow shareholders to reject what it described as a "value-destructive transaction."

In its analysis, Glass Lewis raised concerns about the deal structure, noting it "inherently favored the continuation of the existing Tiptree management team and platform over an immediate payout to shareholders." The advisory firm also highlighted that the transaction "does not provide a clear or immediate path for this value to accrue to shareholders."

Similarly, Egan-Jones expressed concern that the deal would leave Tiptree with nearly $1 billion in unallocated cash, providing management with what it called a "blank-check to redeploy capital at their discretion." This concern is notable given that InvestingPro data indicates Tiptree’s short-term obligations currently exceed its liquid assets.

A third advisory firm, Institutional Shareholder Services (ISS), reached a different conclusion, though Veradace claimed the ISS analysis contained "several material errors," including failure to properly evaluate the deal’s valuation and process.

The proposed transaction has faced market skepticism, with Tiptree’s stock price reportedly dropping more than 20% following the announcement. The stock currently trades at $18.62, significantly below its 52-week high of $27.41, with a P/E ratio of 16.28. InvestingPro analysis suggests the company is slightly undervalued based on its Fair Value assessment, with six additional ProTips available to subscribers examining the company’s financial health, which is rated as "GOOD" overall.

Alex Vezendan, General Partner of Veradace, stated that the sale "stems from a flawed and rushed process that ignored superior alternatives" and criticized the lack of a plan to return the transaction proceeds to shareholders.

The special meeting where shareholders will vote on the proposed sale is scheduled for December 3, 2025. The information in this article is based on a press release statement from Veradace Partners.

In other recent news, Tiptree Inc. has announced plans to divest its insurance business, Fortegra, in a deal valued at approximately $1.65 billion. DB Insurance Co., Ltd. is set to acquire Fortegra in an all-cash transaction, marking a significant entry into the U.S. market for the Korean insurer. The transaction, which was announced on September 26, is expected to close by mid-2026, pending regulatory and stockholder approvals. Institutional Shareholder Services (ISS), a proxy advisory firm, has recommended that Tiptree stockholders approve the merger. However, Veradace Partners, a shareholder with a 5% stake in Tiptree, opposes the sale, labeling it as undervalued and tax-inefficient. Veradace is urging other shareholders to vote against the proposal, citing concerns about the transaction’s structure and its benefits to Tiptree management. The special meeting for shareholders to vote on the proposal is scheduled for December 3. The outcome of this vote will be crucial in determining the future of Tiptree’s divestiture strategy.

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