Zacks Small Cap Research – GBLI: Global Indemnity continues to trade at a significant discount to book value. – Technologist

By Thomas Kerr, CFA

NYSE:GBLI

READ THE FULL GBLI RESEARCH REPORT

Suspension of Exploration of Sale or Merger

On December 7, 2032, the Global Indemnity (NYSE:GBLI) announced that it suspended the exploration of the sale or merger of Penn-America, Global Indemnity’s insurance group, and Global Indemnity itself at this time.

Global Indemnity’s Chairman Saul Fox stated: “Our merger & acquisition market information that suggested we pursue a transaction at this time was not realized.” Chief Executive Officer Jay Brown, added, “Given the Company’s debt-free balance sheet and strong reserve base, coupled with our enviable decades-long profitability, outstanding management team, and extensive national agent and broker network, Penn-America is well-positioned to achieve exceptional financial results for our owners.”

The company also announced that it increased the size of its Board of Directors to seven members to accommodate the new designation of Fred Karlinsky to the Board. Mr. Karlinsky is Co-Chair of Greenberg Traurig, LLP’s global insurance practice. Greenberg Traurig is a multi-national law firm with over 2,600 professionals operating in 45 offices around the world.

Declaration of Distribution

On December 7, 2023, the company announced its Board of Directors had approved a distribution payment of $0.25 per common share which was paid on December 29, 2023 to all shareholders of record as of the close of business on December 22, 2023.

Valuation and Estimates

We lower our price target to $55.00 to take into account the absence of the optionality of a near-term acquisition or merger.

We are maintaining our 4th quarter and full year 2023 EPS estimates at this time as we await the release of the company’s year-end financial results in mid-March.

GBLI stock is currently selling at 60.6% of book value based on September 30, 2023 shareholders’ equity.

SUBSCRIBE TO ZACKS SMALL CAP RESEARCH to receive our articles and reports emailed directly to you each morning. Please visit our website for additional information on Zacks SCR. 

DISCLOSURE: Zacks SCR has received compensation from the issuer directly, from an investment manager, or from an investor relations consulting firm, engaged by the issuer, for providing research coverage for a period of no less than one year. Research articles, as seen here, are part of the service Zacks SCR provides and Zacks SCR receives quarterly payments totaling a maximum fee of up to $40,000 annually for these services provided to or regarding the issuer. Full Disclaimer HERE.