Specialty insurers Kingsway Financial Services Inc. announced today that it has begun a tender offer to purchase all of the outstanding stock of American Country Holdings Inc.

It is offering US$2.10 for each share, US$12 for each preferred share and US17.5¢ for each warrant, in cash in each case. The offer represents a 52% premium to its recent trading price.

The deal values Chicago-based American Country, which had premiums earned of US$72 million in fiscal 2000, at about US$24 million based on 9.6 million common shares outstanding and 305,000 preferred shares.

American Country Holdings Inc. is an insurance holding company that has as its direct subsidiaries American Country Insurance Company, American Country Financial Services Corp., American Country Professional Services Corp. and American Country Underwriting Agency Inc.

“Although the Board of American Country has not approved this offer or otherwise commented on it as of this date, we believe that the offer represents full and fair value to the American Country shareholders and encourage American Country shareholders to tender into the offer”, said William Star, chairman, president and CEO of Kingsway.

The offer is conditioned upon, among other things, the tender of the majority of the total voting stock and the receipt of any required insurance regulatory approvals. If the conditions to the offer are met and Kingsway accepts the tendered securities for payment, Kingsway expects that the offer will be followed by a merger or similar transaction at the same price. The offer is not conditioned on financing. The offer expires at midnight ET, on April 1.

In connection with the offer, Advest, Inc. has been retained as the dealer manager and Mellon Investor Services LLC as the information agent.