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NEW YORK-The $39.50 price that Switzerland's Zurich Insurance Group is offering for each outstanding share of U.S. subsidiary Zurich Reinsurance Centre Holdings Inc. is inadequate and should be re-evaluated, says a minority shareholder.

Baltimore-based investment advisory firm T. Rowe Price, which controls about 5% of New York-based ZRC's shares, says in a letter to the ZRC special committee dealing with the stock purchase that "Zurich's bid price does not adequately compensate ZRC minority shareholders for the growth in ZRC's business since its May 1993 IPO."

The May 5 letter, which was reported in a filing with the Securities and Exchange Commission, says the "continued uncertainty" created by the inadequate offer could hurt employee morale and "negatively affect ZRC's ability to attract new business."

A ZRC spokesman responded that the reinsurer's board has "unanimously determined that the offer is fair as well as in the best interest of ZRC's public shareholders."

Zurich made the offer in January and, at the time, held 66% of ZRC's shares (BI, Jan. 20).