UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Amendment No. 4
GRYPHON HOLDINGS INC.
(Name of Issuer)
Common Stock, $0.01 par value per share
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(Title of Class of Securities)
400515102
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(CUSIP NUMBER)
Gregory B. Nevers, Esq.
Corporate Counsel
Markel Corporation
4551 Cox Road
Glen Allen, VA 23060
(804) 965-1673
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(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
October 1, 1998
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(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).
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CUSIP No. 400515102
This statement amends the statement on Schedule 13D dated March 30,
1998, as amended on May 26, 1998, July 28, 1998 and September 1, 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 October 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 "October 1 Letter"). In the October 1 Letter, Markel has
made an unconditional cash merger offer subject only to required regulatory and
shareholder approval, redemption of the poison pill and execution of a mutually
acceptable merger agreement containing customary provisions for transactions of
this nature (the "Offer"). Under the Offer each outstanding share of Gryphon
Common Stock would be converted into the right to receive cash consideration of
$18.00 per share. There can be no assurance (i) that the Gryphon Board of
Directors will accept the Offer or (ii) that any transaction, if agreed upon and
consummated, would contain the same terms as the Offer. If the Offer 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 October 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 October 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: October 1, 1998 /s/ STEVEN A. MARKEL
STEVEN A. MARKEL
Vice Chairman
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Exhibit A
October 1, 1998
Board of Directors
Gryphon Holdings, Inc.
30 Wall Street
New York, New York 10005-2201
Gentlemen:
We continue to be very concerned that the manner in which you have treated our
offer to acquire Gryphon, particularly your failure to engage us in meaningful,
good faith discussions, is contrary to the interests of Gryphon shareholders. We
urge you to meet promptly, give the issues we've raised fair consideration and
communicate your views clearly.
On September 1, 1998, we wrote to you and offered to purchase shares from all
Gryphon shareholders in a merger. We felt this was an extremely generous offer
and one which your shareholders would strongly support. We appreciated the
opportunity to explain more fully our ideas and objectives with Messrs. Crane
and Ford in a meeting in New York on September 16. Nevertheless, we have yet to
receive an appropriate and meaningful response to our offer.
On September 18, Mr. Ford suggested in a telephone conversation that further
discussions could occur, that we would have access to additional information and
that we would move quickly to negotiate a transaction. Unfortunately, your
financial advisor has presented us with a non-negotiable standstill agreement
which is designed to silence us for two years rather than engage us in
meaningful discussions. We understand from your advisors that other parties are
receiving confidential information from the Company. Markel is the most logical
buyer and we should not be excluded from the process.
Competitive factors such as the extended soft market conditions in the insurance
industry, the importance of financial size and the "flight to quality" of
customers all make it increasingly difficult for Gryphon to survive as a
stand-alone entity. Markel's presence as a market leader and its excellent
historical financial results make it the ideal partner for Gryphon and all its
constituencies, and particularly would provide stability for Gryphon's clients
and employees.
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Board of Directors
October 1, 1998
Page 4
To encourage you to move expeditiously, we are enhancing the financial terms of
our offer. We are making an unconditional cash merger offer of $18.00 per share,
subject only to required regulatory and shareholder approval, redemption of the
poison pill and execution of a mutually acceptable merger agreement containing
customary provisions for transactions of this nature. This offer represents a
premium of $6.38 or 55% over the price of Gryphon's common stock on the day
prior to our September 1 letter to you and a premium of $4.00 or 29% over the
price of Gryphon common stock on September 30, 1998. Our offer will expire at
5:00 p.m. EST on Monday, October 5, 1998.
In addition, we would be willing to enhance this offer if you can establish that
additional value is warranted. We would be willing to execute a reasonable
confidentiality agreement to accomplish this objective. This is an important
offer which demands your considered review. We and your other shareholders are
entitled to a prompt and clear response.
Sincerely,
Steven A. Markel
Vice-Chairman
