LandAmerica Financial Group Inc. plans to lay off about 1,100 employees in a cost-cutting move and repurchase nearly 20 percent of its outstanding common stock — moves that could help the company fend off a hostile takeover attempt.
LandAmerica said Tuesday it had already eliminated about 300 positions since July 1, and was on track to cut the equivalent of 1,100 positions in the second half of 2007 — about 13 percent of the company’s residential and lender service groups.
The company also said its board of directors has approved the repurchase of up to 1.5 million shares, or approximately 9 percent of outstanding common stock, between now and the end of March 2009.
That’s on top of a previously announced plan to repurchase another 1.5 million shares. To carry out that plan, announced in February, LandAmerica has repurchased 315,600 shares for $17.9 million since July 1, the company said, with another 710,400 shares remaining.
In its last quarterly report to investors, LandAmerica said second-quarter net income fell 77.8 percent, to $7.9 million.
According to Global Performance LLC, an investment firm that’s one of LandAmerica’s biggest shareholders, one of the company’s rivals is interested in acquiring it. LandAmerica has declined to comment on a potential takeover.
But the company’s articles of incorporation and bylaws require a vote of at least 80 percent of outstanding shares for the approval of a merger, and calls for the staggered elections of board members to guard against a takeover.
According to Demotech Inc., the top U.S. title insurers in 2006 were First American Title, with $3.8 billion in premiums written, Chicago Title ($2.3 billion), Stewart Title Guarantee ($1.8 billion) and Fidelity National Title ($1.5 billion).