Conseco Inc. has refused to endorse efforts by a major shareholder to accumulate up to 22% of the company's common stock.
Steel Partners II Ltd., New York, now owns about 10% of Conseco's stock and has asked the company for permission to buy more shares.
Conseco, Carmel, Ind., has declined to support the Steel Partners proposal, Conseco says.
Under Internal Revenue Service rules, Conseco could lose valuable tax-loss carryovers if it undergoes a significant change of ownership, Conseco says.
In addition, Conseco's directors "believe it is inappropriate to give preference to one shareholder over others," Conseco Chief Executive James Prieur writes in a letter to Steel Partners Chairman John Howard.
Conseco already is reviewing strategic alternatives for enhancing shareholder value, and company executives "strongly disagree with" suggestions to the contrary that Howard made in a May 19 letter to Prieur, Prieur writes.
Howard asserted in the May 19 letter that the Conseco board has been too slow to find ways to improve the company's return on equity.
A spokesman for Steel Partners declined to comment on Conseco's response to the letter.
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