The company also took a charge of $11 million, or 2 cents a share, for the proxy contest.

The offer came hours after Texaco broke off talks aimed at fighting a proxy contest.

"And one of the options we are considering is a possible proxy contest."

"The proxy contest is not over until the final vote is announced July 8," he said.

"These are steps we would have taken in the absence of any proxy contest," he said.

The takeover battle, including a disputed proxy contest, cost Farmers an estimated $7.5 million in the first half of this year.

She is leading a proxy contest to put up to seven new members on the company's 20-member board.

"We believe it is simply a tactical device to try to affect the outcome of a proxy contest," he said.

He has, for instance, rebuffed calls from large public pension funds to give them even greater power in proxy contests.

The deal was approved with 53 percent of the vote in a proxy contest.