-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, ZaHyxE1/Ddk/aleq17+ROhbQXnpkHlYVtG1UNDePTZM8hOQ3O6g+og2ZHeLAdlVI 0VYN5PuHZGVB8EO42SHJ2Q== 0000005016-94-000007.txt : 19940225 0000005016-94-000007.hdr.sgml : 19940225 ACCESSION NUMBER: 0000005016-94-000007 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940223 ITEM INFORMATION: 5 ITEM INFORMATION: 7 FILED AS OF DATE: 19940224 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN FINANCIAL CORP CENTRAL INDEX KEY: 0000005016 STANDARD INDUSTRIAL CLASSIFICATION: 6331 IRS NUMBER: 310624874 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 34 SEC FILE NUMBER: 001-07361 FILM NUMBER: 94512389 BUSINESS ADDRESS: STREET 1: ONE E 4TH ST CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5135792121 8-K 1 FORM 8-K FILED PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K Current Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 February 22, 1994 Commission File No. 1-7361 (Date of earliest event reported) AMERICAN FINANCIAL CORPORATION Incorporated under the laws of Ohio IRS Employer Identification No. 31-0624874 One East Fourth Street Cincinnati, Ohio 45202 Phone: (513) 579-2538 Former name or former address, if changed since last report - not applicable. AMERICAN FINANCIAL CORPORATION FORM 8-K Item 5. Other Events. On February 22, 1994, American Financial Corporation ("AFC") announced that it is offering to issue $550 million principal amount of 9-1/2% Debentures Due April 20, 2004 in exchange for all of its outstanding debentures. There is an aggregate of approximately $550 million principal amount of AFC's debentures presently outstanding. See the attached News Release. In its offering materials, AFC stated that while fourth quarter results are not yet available, AFC anticipates that it will report substantial earnings for that period. On February 10, 1994, Penn Central announced that it is considering a proposal from AFC that Penn Central purchase the personal lines insurance businesses owned by AFC's wholly-owned subsidiary, Great American Insurance Company ("GAI"). See the attached News Release. If a transaction involving the personal lines business is accomplished, it may be changed from the transaction proposed with respect to the nature of the transaction, price, and form of consideration paid. A Penn Central shareholder has filed a purported derivative action against AFC and the Penn Central board of directors in state court in Cincinnati, Ohio. The action alleges that the proposal from AFC, if consummated, would constitute a waste of Penn Central's assets and seeks to enjoin the transaction or damages if it is consummated. AFC believes that the lawsuit is without merit. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (a) Not Applicable (b) Not Applicable (c) (i) AFC News Release (ii) Penn Central News Release Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned. Page 2 of 3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. AMERICAN FINANCIAL CORPORATION February 23, 1994 By: /s/ Fred J. Runk Vice President and Treasurer Page 3 of 3 AMERICAN FINANCIAL CORPORATION ANNOUNCES OFFER TO ISSUE NEW 9-1/2% DEBENTURES DUE APRIL 20, 2004 IN EXCHANGE FOR ITS PRESENTLY OUTSTANDING DEBENTURES FOR IMMEDIATE RELEASE (CINCINNATI, OHIO -- FEBRUARY 22, 1994) -- American Financial Corporation ("AFC") announced today that it is offering to issue 9-1/2% Debentures due April 20, 2004 (the "New Debentures") in exchange for all of its presently outstanding debentures. AFC is offering to issue: (i) $1,000 principal amount of New Debentures and $20.00 in cash in exchange for each $1,000 principal amount tendered of its 9-1/2% Subordinated Debentures due April 22, 1999; (ii) $1,000 principal amount of New Debentures plus $20.00 in cash in exchange for each $1,000 principal amount tendered of its 10% Debentures due October 20, 1999 and 10% Debentures due October 20, 1999, Series A; (iii) $1,000 principal amount of New Debentures plus $35.65 in cash in exchange for each $1,000 principal amount tendered of its 12% Debentures due September 3, 1999, 12% Debentures due September 3, 1999, Series A and 12% Debentures due September 3, 1999, Series B; (iv) $1,000 principal amount of New Debentures plus $69.48 in cash in exchange for each $1,000 principal amount tendered of its 12-1/4% Debentures due September 15, 2003; and (v) $1,000 principal amount of New Debentures plus $33.57 in cash in exchange for each $1,000 principal amount tendered of its 13-1/2% Debentures due September 14, 2004 and 13-1/2% Debentures due September 14, 2004, Series A. These prices are based on current redemption prices plus accrued interest plus a premium of 2% ($20 cash per $1,000 principal amount) of old debentures. The 12-1/4% Debentures due 2003 are redeemable at 103.75% of principal amount. All of the other issues of old debentures are redeemable at principal amount. All regular semi-annual interest payments due in March and April 1994 will be paid on the old issues of debentures presently outstanding, including those tendered and accepted for exchange. The New Debentures will accrue interest from April 20, 1994, with interest payable in equal semi-annual installments on April 20 and October 20. The Exchange Offer is not conditioned upon any minimum principal amount of presently outstanding debentures being tendered. The Exchange Offer will expire on March 25, 1994, at 5:00 p.m., Eastern Time, unless extended by AFC as to any or all of the issues of presently outstanding debentures. AFC intends to apply for listing of the New Debentures on the Pacific and Cincinnati Stock Exchanges. Following the expiration date, AFC will redeem as many of the old debentures presently outstanding as it believes its resources will reasonably allow. Particular issues and amounts of presently outstanding debentures selected for redemption will depend, among other factors, on the results of the Exchange Offer as well as on the interest rates, sinking fund requirements, final maturity and redemption premiums, if any, of the presently outstanding debentures. The Exchange Offer is being made only pursuant to offering materials which will be mailed to holders of presently outstanding debentures in the next several days. AFC is a holding company engaged in property and casualty insurance, annuity programs and portfolio investing. AFC also owns a significant portion of the voting equity securities of several publicly owned companies. # # # FOR FURTHER INFORMATION, PLEASE CONTACT: Sandra W. Heimann Telephone: 513/579-2121 FOR IMMEDIATE RELEASE FEBRUARY 10, 1994 PENN CENTRAL CONSIDERING ACQUISITION OF PERSONAL LINES INSURANCE BUSINESSES CINCINNATI, OHIO February 10, 1994 -- The Penn Central Corporation announced that it is considering a proposal from American Financial Corporation (AFC) for the purchase by Penn Central of the personal lines insurance businesses owned by Great American Insurance Company (GAI) for a proposed purchase price of approximately $380 million in cash. GAI is a wholly owned subsidiary of AFC. GAI's personal lines businesses reported net earned premiums of $342 million in 1993 and $322 million in 1992. Approximately 70% of these premiums came from standard private passenger automobile insurance, 25% from multiperil homeowners' insurance and 5% from other lines. GAI has advised PCC that separate income statements for the personal lines businesses are not available because these lines have been included with GAI's other insurance lines for financial reporting purposes. However, GAI estimates that on a stand-alone basis the personal lines businesses had pro forma accident year statutory combined ratios of 99.0% in 1993 and 99.1% in 1992. AFC's proposal for the sale of the personal lines businesses to PCC would include the transfer by GAI of an investment portfolio of securities with a market value of approximately $450 million, consisting principally of investment grade bonds. GAI estimates that the GAAP net book value of the businesses that would be transferred at closing would be approximately $200 million. The Penn Central board of directors has at this stage concluded that the proposed acquisition merits serious consideration, in part because it could further Penn Central's strategy of achieving higher returns by investing its substantial cash resources in profitable property and casualty insurance businesses. The board also noted that the proposed acquisition is potentially attractive in that it could provide Penn Central with the opportunity to become a full-service provider of private passenger automobile insurance on a nation wide basis that can take advantage of Penn Central's existing auto insurance management and underwriting skills. The Penn Central board has appointed a special committee of its outside directors to review the proposal. The special committee is empowered to negotiate all aspects of the proposed transaction, including the purchase price proposed by AFC. Completion of a transaction would be subject to certain conditions, including approval by the special committee, receipt by Penn - 2 - Central of an appropriate fairness opinion from an investment banking firm and any required regulatory approvals. AFC owns 40.5% of Penn Central's common shares and AFC's principal shareholder, Carl H. Lindner, is Chairman and Chief Executive Officer of Penn Central. Penn Central is engaged primarily in specialty property and casualty insurance. -----END PRIVACY-ENHANCED MESSAGE-----