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DALLAS - Investment firm Veradace Partners, which holds a 5% stake in Tiptree Inc. (NASDAQ:TIPT), has called on shareholders to vote against the proposed sale of The Fortegra Group to DB Insurance Co., Ltd. at the upcoming December 3, 2025, special meeting. Tiptree, currently trading at $19.05 with a market capitalization of $720.35 million, has seen its share price decline by 12.09% over the past six months according to InvestingPro data.
In a presentation released Thursday, Veradace characterized the transaction as "undervalued" and resulting from a "flawed and conflicted process." The investment firm criticized the deal structure as tax-inefficient, claiming it effectively grants management "a $1 billion blank check while delivering no direct return to shareholders." This claim comes despite Tiptree's current P/E ratio of 16.53 and PEG ratio of 0.8, suggesting the stock is trading at a low P/E ratio relative to near-term earnings growth, one of several insights available through InvestingPro's comprehensive analysis.
Veradace raised several concerns about the transaction, including the timing of the sale, which comes months before certain rights held by Warburg Pincus LLC would take effect. The firm also questioned why Tiptree did not retain an investment bank to explore selling the entire company in what it describes as a more tax-efficient manner.
Additionally, Veradace challenged the valuation, arguing the transaction was "priced at a significant discount to comparable companies on a multiple of net income." The firm also questioned why transaction proceeds would not be returned entirely to shareholders.
The investment firm contends there are "numerous superior alternative paths" that could deliver higher returns to Tiptree shareholders and has urged the board to pursue a restructured deal.
Tiptree insiders own approximately 40% of the company's shares, according to Veradace's statement. The special meeting where shareholders will vote on the proposed transaction is scheduled for December 3, 2025.
This article is based on a press release statement from Veradace Partners.
In other recent news, Tiptree Inc. announced plans to divest its insurance business, Fortegra, and a mortgage business in transactions valued at approximately $1.7 billion. The Fortegra sale, priced at $1.65 billion, is expected to bring Tiptree around $1.12 billion in gross proceeds. This deal is currently awaiting regulatory approvals and is projected to close by mid-2026. DB Insurance Co., Ltd. has agreed to acquire Fortegra, marking its largest entry into the U.S. market. However, Veradace Partners L.P., a shareholder with a 5% stake in Tiptree, declared its intention to vote against the sale. Veradace criticized the transaction terms, asserting they favor Tiptree management over shareholders. The firm has called for a restructuring of the deal to ensure direct financial benefits for shareholders. These developments are subject to regulatory and stockholder approvals.
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