An investigation concerning whether the offer to take over Mercer Insurance Group, Inc. at $28.25 per share and sale process are unfair to investors of Mercer Insurance Group, Inc. (NASDAQ:MIGP) and certain officers and directors at Mercer Insurance Group breached their fiduciary duties was announced.

The investigation by a law firm concerns whether Mercer Insurance Group, Inc. and certain of its officers and directors breached their fiduciary duties owed investors in Mercer Insurance Group, Inc. (NASDAQ:MIGP) in connection with the proposed takeover.

On Tuesday, Nov. 30, after the market closed Mercer Insurance Group, Inc. (NASDAQ: MIGP) and United Fire & Casualty Company (NASDAQ: UFCS) announced that the companies have entered into a merger agreement under which United Fire & Casualty Company will acquire all of the outstanding shares of Mercer Insurance Group, Inc. common stock (MIGP) for $28.25 per share in cash, representing an aggregate transaction value of approximately $191 million. Mercer Insurance Group, Inc said the offered price represents a premium of 49.8% to the closing price of Mercer Insurance common stock on November 30, 2010.

Shares of Mercer Insurance Group, Inc. (MIGP) increased by almost 50% from $18.64 to $27.90 per share in response to the takeover news.

But the investigation by a law firm concerns whether the offer undervalues Mercer Insurance Group, Inc. and the sale process is unfair to the shareholders of Mercer Insurance Group, Inc. (NASDAQ:MIGP). Mercer Insurance Group has performed well in the past. Mercer Insurance Group reported over the past four 12 months filing period relatively consistent Total Revenue ranging from $149.93million to $161.68million. Its Net Income over the same time frame ranged from $8.23million to lately $13.82million. Mercer Insurance Group reported for the first three quarters in 2010 a combined Total Revenue of $11.532million with a Net Income of $11.12million. In addition certain officers and directors of Mercer Insurance, who together beneficially own approximately 13% of the outstanding shares of Mercer Insurance common stock, have already agreed to vote their shares in favor of the merger. Therefore the investigation concerns whether the Mercer Insurance Group Board of Directors undertook an adequate and fair sales process to obtain fair consideration for all shareholders of Mercer Insurance Group, Inc. (NASDAQ:MIGP) and breached their fiduciary duties to Mercer Insurance Group (MIGP) shareholder by failing to adequately shop the Company before entering into the transaction.