UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Amendment No. 3
GRYPHON HOLDINGS INC.
(Name of Issuer)
Common Stock, $0.01 par value per share
-----------------------------------------------------------------
(Title of Class of Securities)
400515102
-----------------------------------------------------------------
(CUSIP NUMBER)
Gregory B. Nevers, Esq.
Corporate Counsel
Markel Corporation
4551 Cox Road
Glen Allen, VA 23060
(804) 965-1673
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
September 1, 1998
-----------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are
to be sent.
The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purposes of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
CUSIP No. 400515102
This statement amends the statement on Schedule 13D dated March 30,
1998, as amended on May 26, 1998 and July 28, 1998 ("Schedule 13D"), previously
filed by Markel Corporation, a Virginia corporation ("Markel"), relating to the
common stock, $.01 par value per share ("Common Stock"), of Gryphon Holdings,
Inc., a Delaware corporation ("Gryphon" or the "Issuer"). Defined terms used
herein and not otherwise defined shall have the meaning set forth in the
Schedule 13D.
ITEM 4. PURPOSE OF TRANSACTION.
Item 4 of the Schedule 13D is amended and restated in full as follows:
On September 1, 1998 Markel sent a letter to the Board of Directors of
Gryphon, a copy of which is attached as Exhibit A and is hereby incorporated by
this reference (the "September 1 Letter"). As indicated in the September 1
Letter, Markel has made a proposal (the "Proposal") to acquire all the issued
and outstanding shares of Gryphon common stock in a merger transaction. The
Proposal is subject to negotiation of mutually acceptable agreements and other
documentation and receipt of all necessary regulatory and shareholder approvals.
Under the Proposal each outstanding share of Gryphon Common Stock would be
converted into the right to receive total consideration of $18.00. The
consideration would consist of $15.50 in cash and $2.50 in notes (subject to
possible offset for adverse developments). There can be no assurance (i) that
the Gryphon Board of Directors will accept the Proposal or (ii) that any
proposal, if accepted, would contain the same terms as the Proposal. If the
Proposal is accepted and ultimately consummated Gryphon's shares of common stock
would no longer be publicly listed or quoted in the NASDAQ National Market and
Gryphon's shares of Common Stock would become eligible for termination of
registration pursuant to Section 12(g)(4) of the Securities Exchange Act of
1934, as amended.
Markel intends to continue to monitor its investment and review Gryphon's
business affairs and financial position. Based on such review, as well as
general economic and industry conditions existing at the time, Markel may
consider from time to time various alternative courses of action and may discuss
with Gryphon's Board ways in which Gryphon's shareholder value may be increased.
Markel may also seek to acquire additional shares of Common Stock through open
market purchases, privately negotiated transactions or otherwise or it may seek
to dispose of some or all of the shares of Gryphon Common Stock owned by Markel
(the "Shares").
In addition to the possible actions set forth in the September 1 Letter and this
Item 4, Markel may have discussions with Gryphon's Board of Directors,
management and/or other shareholders of Gryphon concerning (i) the acquisition
or disposition of shares of Gryphon Common Stock; (ii) Gryphon's charter,
bylaws, shareholder rights plan and other instruments and/or actions which may
impede the acquisition of control of Gryphon; and (iii) Gryphon's current and
future business plans, prospects and management. Except as described above or in
the September 1 Letter, Markel does not currently have any plans or proposals
which relate to or would result in any of the actions or transactions specified
in clauses (a) though (j) of Item 4 of Schedule 13D. However, Markel reserves
the right at any time to formulate other plans and purposes regarding its Shares
or Gryphon.
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: September 1, 1998 /s/ STEVEN A. MARKEL
STEVEN A. MARKEL
Vice Chairman
<PAGE>
Exhibit A
September 1, 1998
Board of Directors
Gryphon Holdings, Inc.
30 Wall Street
New York, NY 10005-2201
Gentlemen:
As you know Markel Corporation ("Markel") presently owns 11.7% of the
outstanding shares of Gryphon Holdings, Inc. ("Gryphon" ) and we have expressed
an interest in acquiring more shares. As a result of your failure to respond to
our prior communication and the purported amendment to Gryphon's shareholder
rights plan, we have concluded that the best course of action for us to achieve
our objective is to present a specific merger proposal for your consideration.
We propose a transaction in which Markel or one of its subsidiaries would
acquire, after receiving all necessary regulatory and shareholder approvals, all
outstanding Gryphon common shares for $18.00 per share. Our proposal is subject
only to negotiation of mutually acceptable agreements and other documentation.
The consideration would consist of $15.50 in cash and $2.50 in notes (subject to
possible offset for adverse developments).
We believe our proposal is fair and generous to Gryphon shareholders. The
proposed price represents a 55% premium over the current price for Gryphon
shares as of the close of business yesterday, August 31, 1998. This proposal
does not require due diligence and we believe mutually acceptable documentation
could be completed in a matter of days.
As an alternative, we are prepared to pursue an all cash transaction following
the completion of due diligence focused on the adequacy of loss and reinsurance
reserves. If you wish to pursue this alternative we will complete any necessary
due diligence in a very short time period.
In addition to providing significant value for Gryphon shareholders our proposal
provides the best alternative for Gryphon to survive and prosper in the current
market environment. Upon becoming part of a larger organization with greater
resources Gryphon will become more competitive and innovative. Our proposal also
provides better opportunities for Gryphon employees by allowing them to become
part of a stronger, more successful organization.
<PAGE>
Board of Directors
September 1, 1998
Page 2
We are prepared to meet with the full Board, an independent committee of the
Board or the Company's advisors to discuss our proposal further and to answer
any questions. We are also willing to discuss with you any ideas you may have
for enhancing shareholder value. We are confident that you will find our
proposal in the best interest of all Gryphon shareholders.
Please provide us with a written response from the Board no later than September
9, 1998.
Very truly yours,
Steven A. Markel
Vice Chairman
