After CNA Surety Corporation announced that it received a proposal from CNA Financial Corporation to acquire CNA Surety Corporation for $22 per share investigations on behalf of investors of CNA Surety Corporation (NYSE:SUR) over possible breaches of fiduciary duties by CNA Financial Corp and certain directors and officers at CNA Surety in connection with the buy-out were announced.

The investigations by law firms concern whether CNA Financial Corporation, CNA Surety Corporation and certain of its directors and officers breached or will breach their fiduciary duties owed to CNA Surety Corporation (NYSE:SUR) investors in connection with the proposed takeover.

On Monday, Nov. 1, 2010 CNA Surety Corporation ( NYSE:SUR) announced that it has received a proposal from CNA Financial Corporation (NYSE: CNA) to acquire all of the outstanding shares of common stock of CNA Surety that are not currently owned by subsidiaries of CNA for $22.00 per share in cash. CNA Financial Corporation said the $22.00 per share price represents a 14% premium over CAN Surety's last closing price and a 13% premium to CAN Surety's recent 52-week high. The proposed price also represents a 24% premium over CAN Surety's closing price one month ago and a 31% premium over CAN Surety's closing price three months ago.

But SUR investors and the open market werent impressed and shares of CNA Surety Corporation increased in response to the proposed takeover news well above the offer and closed at $23.15 per share on Monday. In addition analysts have projected that CNA Surety's true inherent value is at least $24 per share. Thus investigations by law firms concern whether offered price is grossly unfair, inadequate to the shareholders of CNA Surety Corporation (NYSE:SUR), and substantially below the fair or inherent value of CNA Surety.

In addition CNA Financial Corporation, through its subsidiaries, currently owns already approximately 62% of the outstanding shares of CNA Surety Corporation (NYSE:SUR) common stock, which almost guarantees the transaction to be approved. CNA Financial Corp also informed CNA Surety that it is only interested in acquiring the remaining shares of CNA Surety, and has no interest in a sale of its controlling interest in CNA Surety to a third party. Therefore the investigations concern also whether the CNA Surety Board of Directors undertake an adequate and fair sales process to obtain fair consideration for all shareholders of CNA Surety Corporation (NYSE:SUR) and breach their fiduciary duties to CNA Surety Corp. (SUR) shareholder by failing to adequately shop the Company before entering into a transaction with CNA Financial Corporation.