-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UnW3eWWIr4gv4SZQ5hN5oi9nTbK/YYlZusAu3bW1JEzIo5sPaw/cm7c3QGgewIoE byFBPscsT0S/JdEMlvcP3Q== 0000950152-97-007172.txt : 19971014 0000950152-97-007172.hdr.sgml : 19971014 ACCESSION NUMBER: 0000950152-97-007172 CONFORMED SUBMISSION TYPE: PRE13E3/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19971010 SROS: NYSE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN FINANCIAL CORP CENTRAL INDEX KEY: 0000005016 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 310624874 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: PRE13E3/A SEC ACT: SEC FILE NUMBER: 005-08115 FILM NUMBER: 97694384 BUSINESS ADDRESS: STREET 1: ONE E 4TH ST CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5135792121 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN FINANCIAL GROUP INC /OH/ CENTRAL INDEX KEY: 0000933537 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 311422526 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: PRE13E3/A BUSINESS ADDRESS: STREET 1: ONE E FOURTH ST STREET 2: SUITE 919 CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5135796600 MAIL ADDRESS: STREET 1: ONE EAST FOURTH STREET STREET 2: SUITE 919 CITY: CINCINNATI STATE: OH ZIP: 45202 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN PREMIER GROUP INC DATE OF NAME CHANGE: 19941208 PRE13E3/A 1 AMERICAN FINANCIAL GROUP PRE 13E-3/AMENDMENT NO.2 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13E-3 Rule 13e-3 Transaction Statement (Pursuant to Section 13(e) of the Securities Exchange Act of 1934 Amendment No. 3 American Financial Corporation ---------------------------------------------------------------------- (Name of Issuer) American Financial Group, Inc. American Financial Corporation ---------------------------------------------------------------------- (Name of Persons Filing Statement) Series F Cumulative Voting Preferred Stock Series G Cumulative Voting Preferred Stock ---------------------------------------------------------------------- (Title of Class of Securities) Series F - 026087809 Series G - 026087874 ---------------------------------------------------------------------- (CUSIP Number of Class of Securities) James C. Kennedy, Esq. American Financial Corporation One East Fourth Street Cincinnati, Ohio 45202 (513) 579-2538 ---------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Persons Filing Statement) This Statement is filed in connection with (check the appropriate box): a. [X] The filing of solicitation materials or an information statement subject to Regulation 14A, Regulation 14C or Rule 13e-3(c) under the Securities Exchange Act of 1934. b. [ ] The filing of a registration statement under the Securities Act of 1933. c. [ ] A tender offer. d. [ ] None of the above. Check the following box if the soliciting materials or information statement referred to in checking box (a) are preliminary copies: [X] 2 CALCULATION OF FILING FEE Transaction Valuation: $306,241,059 Amount of Filing Fee: $61,248 (previously paid) [x] Check Box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. AMOUNT PREVIOUSLY PAID: $61,248 FILING PARTY: American Financial Corporation FORM OR REGISTRATION NO.: Preliminary Proxy Statement DATE FILED: July 16, 1997 and October 10, 1997 This Amended Rule 13e-3 Transaction Statement is being filed by American Financial Group, Inc. and its subsidiary, American Financial Corporation, both Ohio corporations, in connection with a proposal to cause a merger of American Financial Corporation whereby all of its Series F and G Preferred Stock would be converted into the right to receive cash or shares of its new Series J Preferred Stock. The following Cross Reference Sheet, prepared in accordance with General Instruction F to Schedule 13E-3, shows the location in the Preliminary Proxy Statement filed by American Financial Corporation on the date hereof of the information required to be included in this Schedule 13E-3. The information set forth in the Preliminary Proxy Statement, including all exhibits thereto, is expressly incorporated by reference as set forth in the Cross Reference Sheet in response to each item of this Schedule 13E-3 and the responses to each item in this Schedule 13E-3 are qualified in their entirety by the information contained in the Preliminary Proxy Statement. ITEM IN SCHEDULE 13E-3 WHERE LOCATED IN PRELIMINARY PROXY STATEMENT 1(a) Cover Page 1(b) Description of Preferred Stock; Introduction - Proposal No. 1 Adoption of the Merger Agreement; Ownership of Preferred Stock 1(c) The Merger - Market Price and Dividend Data 1(d) The Merger - Market Price and Dividend Data 1(e) * 1(f) Ownership of Preferred Stock 2(a) Management, Principal Shareholders 2(b) Management, Principal Shareholders 3 2(c) Management, Principal Shareholders 2(d) Management, Principal Shareholders 2(e) * 2(f) * 2(g) * 3(a)(1.) Certain Transactions 3(a)(2.) * 3(b) * 4(a) The Merger Agreement 4(b) * 5(a) The Merger Agreement 5(b) * 5(c) * 5(d) The Merger - Comparison of Preferred Shares and Introduction - Proposal No. 1 5(e) * 5(f) Introduction - Proposal No. 1 5(g) * 6(a) The Merger Agreement - Expenses 6(b) The Merger Agreement - Expenses 6(c) * 6(d) * 7(a) Special Factors - The Special Committee 7(b) Special Factors - The Special Committee 7(c) Special Factors - The Special Committee 7(d) The Merger - Conflicts of Interest, Certain United States Federal Income Tax Consequences 8(a) The Merger - Actions of the Special Committee and Recommendation of the Board of Directors of AFC and AFG and Special Factors -- The Special Committeee 4 8(b) Special Factors - The Special Committee 8(c) Voting at the Meeting; The Merger - Vote Required; Certain Expected Voting 8(d) Special Factors - The Special Committee 8(e) Special Factors - The Special Committee 8(f) * 9(a) Special Factors - The Special Committee 9(b) Special Factors - The Special Committee 9(c) Special Factors - Opinion of the Special Committee's Financial Advisor 10(a) Ownership of Preferred Stock 10(b) * 11 The Merger - Vote Required; Certain Expected Voting 12(a) The Merger - Vote Required; Certain Expected Voting 12(b) The Merger - Recommendation of the Board of Directors and Special Factors -- The Special Committee 13(a) The Merger Agreement - Dissenters' Rights 13(b) * 13(c) * 14(a) Selected Financial Data; Financial Statements 14(b) Pro Forma Financial Information 15(a) Voting at the Meeting - Proxies 15(b) * 16 * 17(a) * 17(b) * 17(c) * 17(d) * 17(e) The Merger - Dissenters' Rights; Exhibit C to Proxy Statement 17(f) * 5 *The item is located in the Schedule 13E-3 only. ITEM 1 Issuer and Class of Security Subject to the Transaction (a) The relevant information set forth on the Cover Page of the Preliminary Proxy Statement is incorporated herein by reference. (b) The relevant information set forth under the captions "Description of Preferred Stock; Introduction - Proposal No. 1 Adoption of the Merger Agreement; Ownership of Preferred Stock" in the Preliminary Proxy Statement is incorporated herein by reference. (c) The relevant information set forth under the caption "The Merger - Market Price and Dividend Data" in the Preliminary Proxy Statement is incorporated herein by reference. (d) The relevant information set forth under the caption "The Merger - Market Price and Dividend Data" in the Preliminary Proxy Statement is incorporated herein by reference. (e) In October 1996, American Financial Group, Inc. sold $100 million (proceeds to the company) of trust preferred securities due 2026, comprised of 4 million shares sold at $25 per share. In December 1995, American Financial Group, Inc. sold 4.6 million shares of common stock at a price of $28.875 per share, providing proceeds to the company of $110.9 million. (f) The relevant information set forth under the caption "Ownership of Preferred Stock" in the Preliminary Proxy Statement is incorporated herein by reference. ITEM 2 Identity and Background The persons filing this statement are American Financial Group, which owns all of the Common Stock, which constitutes approximately 76% of the voting power, of American Financial corporation which is also a filer. American Financial Corporation is the issuer of the class of equity securities which is the subject of the Rule 13e-3 transaction. (a) The relevant information set forth under the caption "Management - Principal Shareholders" in the Preliminary Proxy Statement is incorporated herein by reference. (b) The relevant information set forth under the caption "Management - Principal Shareholders" in the Preliminary Proxy Statement is incorporated herein by reference. 6 (c) The relevant information set forth under the caption "Management - Principal Shareholders" in the Preliminary Proxy Statement is incorporated herein by reference. (d) The relevant information set forth under the caption "Management - Principal Shareholders" in the Preliminary Proxy Statement is incorporated herein by reference. (e) None of the directors or executive officers have been convicted in a criminal proceeding (other than traffic violations and similar misdemeanors) nor has any of them been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction that resulted in a judgment, decree or final order enjoining further violations of, or prohibiting activities subject to, federal or state securities laws. Each is a U.S. citizen. (f) None of the directors or executive officers have been convicted in a criminal proceeding (other than traffic violations and similar misdemeanors) nor has any of them been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction that resulted in a judgment, decree or final order enjoining further violations of, or prohibiting activities subject to, federal or state securities laws. Each is a U.S. citizen. (g) U.S. ITEM 3. Past Contracts, Transactions or Negotiations (a)(1.) The relevant information set forth under the caption "Certain Transactions" in the Preliminary Proxy Statement is incorporated herein by reference. Pursuant to an Agreement and Plan of Acquisition and Reorganization (the "Agreement") dated as of December 9, 1994, in a series of mergers, American Premier Underwriters, Inc. ("APU") and American Financial Corporation ("AFC") combined their respective businesses by becoming subsidiaries of American Financial Group, Inc. in April 1995. Pursuant to one merger, APU became a subsidiary of AFG with each issued and outstanding share of APU Common Stock being converted into one share of AFG Common Stock and each issued and outstanding share of APU Preferred Stock being converted into one share of preferred stock of AFG. In another merger, AFC became a subsidiary of AFG with each share of AFC Common Stock being converted into the right to receive shares of AFG Common Stock at a rate equal to 1.45 shares of AFG Common Stock for each share of AFC Common Stock; cash was paid in lieu of fractional shares of AFG Common Stock. The merger involving AFC had no effect upon the AFC Preferred Stock which remained issued and outstanding after that merger. 7 In the merger completed on April 3, 1995, AFG issued 71.4 million shares of its Common Stock in exchange for all of the outstanding common stock of AFC and APU. (a)(2.) None. (b) None. ITEM 4. Terms of the Transaction. (a) The relevant information set forth under the caption "The Merger Agreement" in the Preliminary Proxy Statement is incorporated herein by reference. (b) None. ITEM 5. Plans or Proposals of the Issuer or Affiliate (a) The relevant information set forth under the caption "The Merger Agreement" in the Preliminary Proxy Statement is incorporated herein by reference. (b) None. (c) None. (d) The relevant information set forth under the caption "The Merger - Comparison of Preferred Shares and Introduction - Proposal No. 1" in the Preliminary Proxy Statement is incorporated herein by reference. (e) None (f) The relevant information set forth under the caption "Introduction - Proposal No. 1" incorporated herein by reference. If the merger proposal is approved, the registration under the Securities Exchange Act of 1934 of the Series F and Series G Preferred Stock would be terminated. (g) The issuer expects to continue to be obligated to file reports pursuant to Section 15(d) of the Securities Exchange Act of 1934. 8 ITEM 6. Source and Amounts of Funds or Other Considerations (a) The relevant information set forth under the caption "The Merger Agreement - Expenses" in the Preliminary Proxy Statement is incorporated herein by reference. (b) The relevant information set forth under the caption "The Merger Agreement - Expenses" in the Preliminary Proxy Statement is incorporated herein by reference. (c) Great American Holding Company, a wholly-owned subsidiary of American Financial Corporation, has a revolving loan agreement with a group of banks headed by The First National Bank of Boston and Bank of America Illinois, N.A. Borrowings bear interest at floating rates based on prime or LIBOR and are collateralized by 50% of the stock of Great American Insurance Company. The facility is guaranteed by American Financial Corporation. (d) Not applicable. ITEM 7. Purposes, Alternatives, Reasons and Effects. (a) The relevant information set forth under the caption "Special Factors - The Special Committee" in the Preliminary Proxy Statement is incorporated herein by reference. (b) The relevant information set forth under the caption "Special Factors - The Special Committee" in the Preliminary Proxy Statement is incorporated herein by reference. (c) The relevant information set forth under the caption "Special Factors - The Special Committee" in the Preliminary Proxy Statement is incorporated herein by reference. (d) The relevant information set forth under the caption "The Merger - Conflicts of Interest, Certain United States Federal Income Tax Consequences" in the Preliminary Proxy Statement is incorporated herein by reference. ITEM 8. Fairness of the Transaction (a) The relevant information set forth under the caption "The Merger - Actions of the Special Committee and Recommendation of the Board of Directors of AFC and AFG" and "Special Factors - The Special Committee" in the Preliminary Proxy Statement is incorporated herein by reference 9 (b) The relevant information set forth under the caption "Special Factors - The Special Committee" in the Preliminary Proxy Statement is incorporated herein by reference (c) The relevant information set forth under the caption "Voting at the Meeting; The Merger - Vote Required; Certain Expected Voting" in the Preliminary Proxy Statement is incorporated herein by reference (d) The relevant information set forth under the caption "Special Factors - The Special Committee" in the Preliminary Proxy Statement is incorporated herein by reference (e) The relevant information set forth under the caption "Special Factors - The Special Committee" in the Preliminary Proxy Statement is incorporated herein by reference (f) No other offer received. ITEM 9. Reports, Opinions, Appraisals and Certain Negotiations. (a) The relevant information set forth under the caption "Special Factors - The Special Committee" in the Preliminary Proxy Statement is incorporated herein by reference (b) The relevant information set forth under the caption "Special Factors - The Special Committee" in the Preliminary Proxy Statement is incorporated herein by reference (c) The relevant information set forth under the caption "Special Factors - Opinion of the Special Committee's Financial Advisor" in the Preliminary Proxy Statement is incorporated herein by reference ITEM 10. Interest in Securities of the Issuer. (a) The relevant information set forth under the caption "Ownership of Preferred Stock" in the Preliminary Proxy Statement is incorporated herein by reference (b) There have been no transactions in the Series F and Series G Preferred Stock during the past 60 days by the filers of this statement or by any pension, profit sharing or similar plan of the issuer or any of its affiliates or any other person enumerated in Instruction C of this Schedule 13E-3 or by any associate or a majority-owned subsidiary of the issuer or affiliate. 10 ITEM 11. Contracts, Arrangements or Understandings with Respect to the Issuer's Securities. The relevant information set forth under the caption "The Merger - Vote Required; Certain Expected Voting" in the Preliminary Proxy Statement is incorporated herein by reference ITEM 12. Present Intention and Recommendation of Certain Persons with Regard to the Transaction. (a) The relevant information set forth under the caption "The Merger - Vote Required; Certain Expected Voting" in the Preliminary Proxy Statement is incorporated herein by reference (b) The relevant information set forth under the caption "The Merger - Recommendation of the Board of Directors of AFC and AFG" and "Special Factors - The Special Committee" in the Preliminary Proxy Statement is incorporated herein by reference ITEM 13. Other Provisions of the Transaction (a) The relevant information set forth under the caption "The Merger Agreement -Dissenters' Rights" in the Preliminary Proxy Statement is incorporated herein by reference (b) No provisions for access to information or counsel or appraisal services have been afforded. (c) Not Applicable. ITEM 14. Financial Information (a) The relevant information set forth under the caption "Selected Financial Data; Financial Statements" in the Preliminary Proxy Statement is incorporated herein by reference (b) The relevant information set forth under the caption "Pro Forma Financial Information" in the Preliminary Proxy Statement is incorporated herein by reference ITEM 15. Persons and Assets Employed, Retailed or Utilized (a) The relevant information set forth under the caption "Voting at the Meeting - Proxies" in the Preliminary Proxy Statement is incorporated herein by reference 11 (b) None. ITEM 16 Additional Information None ITEM 17 Material to be filed as Exhibits. (a) Credit Agreement dated as of December 7, 1993, as amended, among Great American Holding Corporation, The first National Bank of Boston and Bank of America Illinois, N.A. as managing agents.* (b-1) Opinions of Libra Investments, Inc. and Houlihan, Lokey, Howard & Zukin. Incorporated by reference to Exhibits B and D, respectively, to the Preliminary Proxy Statement. (b-2) Presentation to the Special Committee of the Board of Directors of American Financial Corporation by Libra Investments, Inc. dated October 2, 1997. (c) Agreement and Plan of Merger. Incorporated by reference to Exhibit A to the Preliminary Proxy Statement. (d) Preliminary Proxy Statement. Incorporated by reference to the Preliminary Proxy Statement (e) Ohio Revised Code Section 1701.75. Incorporated by reference to Exhibit C to the Preliminary Proxy Statement. (f) None - ----------------------- *Previously filed. 12 SIGNATURE The undersigned certifies that the information set forth in this statement is true, complete and correct. Dated: October 10, 1997 AMERICAN FINANCIAL GROUP, INC. BY: James C. Kennedy ----------------------------------------- Name: James C. Kennedy Title: Deputy General Counsel and Secretary Dated: October 10, 1997 AMERICAN FINANCIAL CORPORATION BY: James C. Kennedy ----------------------------------------- Name: James C. Kennedy Title: Deputy General Counsel and Secretary EX-2.B 2 EXHIBIT B.2 1 Exhibit b-2 PRESENTATION TO THE: SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS AMERICAN FINANCIAL CORPORATION [LIBRA INVESTMENTS, INC. LOGO] OCTOBER 2, 1997 2 AMERICAN FINANCIAL CORPORATION - -------------------------------------------------------------------------------- TABLE OF CONTENTS ----------------- Tab --- Overview of Transaction...................................................1 Terms of New Series J Preferred Stock.....................................2 Terms of Series F and Series G Preferred Stock............................3 Current & Pro Forma Corporate Structure of American Financial Group.......4 Pro Forma Financial Information for AFG and AFC...........................5 Recent Trading Prices of Series F and Series G............................6 Comparable Security Analysis..............................................7 Comparable Tender Offer Analysis..........................................8 Discounted Cash Flow Analysis.............................................9 Range of Values for Series F Preferred....................................10 Exhibits: - -------- Recent AFG Capital Transactions...........................................A Historical Yield of 30 Year Treasury Index................................B - -------------------------------------------------------------------------------- [LIBRA INVESTMENTS, INC. LOGO] PAGE 2 3 AMERICAN FINANCIAL CORPORATION - -------------------------------------------------------------------------------- THESE MATERIALS ARE BASED SOLELY ON INFORMATION RECEIVED FROM PUBLICLY AVAILABLE DOCUMENTS AND CERTAIN OTHER INFORMATION PROVIDED BY THE MANAGEMENT OF AMERICAN FINANCIAL CORPORATION (THE "COMPANY"). LIBRA INVESTMENTS, INC. ("LIBRA") HAS HAD DISCUSSIONS WITH CERTAIN SENIOR OFFICERS OF THE COMPANY AND AMERICAN FINANCIAL GROUP, INC. ("AFG"), BUT HAS NOT ATTEMPTED INDEPENDENTLY TO INVESTIGATE OR VERIFY SUCH INFORMATION, AND LIBRA DOES NOT ASSUME RESPONSIBILITY FOR THE ACCURACY OR THE COMPLETENESS OF SUCH INFORMATION. WITH RESPECT TO THE PRO FORMA INFORMATION INCLUDED IN THE MATERIALS, LIBRA HAS RELIED ON INFORMATION FROM THE MANAGEMENT OF THE COMPANY AND AFG. PRO FORMA INFORMATION INVOLVES ELEMENTS OF SUBJECTIVE JUDGMENT AND ANALYSIS, AND THERE CAN BE NO ASSURANCE THAT SUCH PRO FORMA INFORMATION WILL PROVE ACCURATE. LIBRA EXPRESSES NO OPINION AS TO, AND ASSUMES NO RESPONSIBILITY FOR, THE ACCURACY OF SUCH PRO FORMA INFORMATION OR THE ASSUMPTIONS UNDERLYING IT. THESE MATERIALS ARE BEING FURNISHED AND SHOULD BE CONSIDERED ONLY IN CONNECTION WITH THE OPINION BEING PROVIDED BY LIBRA, AND ARE NOT TO BE CIRCULATED TO, OR USED OR RELIED UPON BY, ANY OTHER PERSONS, WITHOUT LIBRA'S PRIOR WRITTEN CONSENT. - -------------------------------------------------------------------------------- [LIBRA INVESTMENTS, INC. LOGO] PAGE 3 4 AMERICAN FINANCIAL CORPORATION - -------------------------------------------------------------------------------- OVERVIEW OF THE TRANSACTION - - American Financial Group ("AFG") has proposed a restructuring in order to reduce expenses and rationalize its corporate structure. - - As part of this restructuring American Financial Corporation ("AFC") has proposed a merger and related offer (the "Transaction") for its outstanding Series F and Series G Preferred Stock: Holders of Series F and Series G would receive a combination of cash and preferred stock -- the offer requires that $70 million of new Series J Preferred Stock (having a 21% voting interest in AFC) be issued in the transaction. * Series F Preferred Stockholders will receive consideration in either cashor liquidation preference of the new Series J Preferred Stock or some pro rata combination thereof as determined by a formula (the "Series F Consideration"). The Series F Consideration will be determined as follows: the price offered per share at closing will be the greater of (i) $23.75 or (ii) the price per share which provides a current yield of 140 basis points over the 30 year treasury yield the day prior to closing, plus accrued and unpaid dividends from June 3, 1997 to the date of closing. This formula yields a price today for the Series F Preferred of $24.15 per share which equals to $23.40 on a strip price basis. If the Transaction does not close by 11/1/97, the dividend on the Series F Preferred will begin to accrue from 11/1/97. Accrued dividends on the Series J Preferred will begin to accrue on 11/1/97 at an annualized rate of 8.0%. Current yield based on the above strip price is equal to 7.69% or 140 basis points over the 30 year treasury yield. * Series G Preferred Stockholders will receive $10.50 in cash (plus accrued dividends) and/or $10.50 (.4375 of a Series J share) in liquidation preference on new Series J Preferred Stock, or some pro rata combination thereof. - - This Transaction is subject to a vote by 2/3 of the holders of both Series F and Series G Preferred Stock. - - The precise allocation of the new Series J Preferred Stock will be governed by the election of the Series F and Series G Preferred Shareholders - - Series F and Series G Preferred Shareholders will have dissenters' rights pursuant to Ohio Law. - -------------------------------------------------------------------------------- [LIBRA INVESTMENTS, INC. LOGO] PAGE 4 5 AMERICAN FINANCIAL CORPORATION - -------------------------------------------------------------------------------- TRANSACTION SPECIFICS
EXISTING OFFER(a) CASH NEW PREFERRED Series F Preferred 11.9MM Shares @ $ 24.15 $ 287,385,000 $ 222,151,769 $ 65,233,231 Series G Preferred 2 MM Shares @ $ 10.50 $ 21,000,000 $ 16,233,231 $ 4,766,769 ----------------------------------------------------------- TOTAL CONSIDERATION $ 308,385,000 $ 238,385,000 $ 70,000,000 % OF TOTAL CONSIDERATION $ 100.00% 77.30% 22.70%
(a) Assumes offer of Series J Preferred is fully subscribed by both the Series F and G holders. - -------------------------------------------------------------------------------- [LIBRA INVESTMENTS, INC. LOGO] PAGE 5 6 AMERICAN FINANCIAL CORPORATION - ------------------------------------------------------------------------------- ROLE OF THE SPECIAL COMMITTEE - - The Board of Directors of AFC has formed a Special Committee in order to evaluate and negotiate the Transaction on behalf of stockholders of AFC's Series F and Series G Preferred Stock. - - Ultimately the Special Committee is charged with making a recommendation relative to the Transaction to AFC's Preferred Stockholders. - - Libra Investments, Inc. has been retained as financial advisor by the Special Committee to opine on the fairness of the Transaction Consideration. - -------------------------------------------------------------------------------- [LIBRA INVESTMENTS, INC. LOGO] PAGE 6 7 AMERICAN FINANCIAL CORPORATION - -------------------------------------------------------------------------------- ROLE OF LIBRA INVESTMENTS, INC. Libra Investments has analyzed the following factors as they relate to the fairness of the Transaction Consideration. - - The terms and structure of the Reorganization and the Transaction - - The affect of the Reorganization and the Transaction on the earnings, financial strength and tax position of AFG and AFC - - The potential for a credit rating upgrade for AFG and its affiliates - - The recent trading prices and yields of the Series F and Series G Preferred Stock - - The recent trading prices and yields of AFC's and its affiliate's other securities and comparable securities in general - - General market conditions including prevailing yields in the market relative to historical levels - - Tender offers and other transactions involving non-call securities - - The illiquidity of the Series F and Series G Preferred Stock - - The potential illiquidity of the new issue of Preferred Stock and issues pertaining to registration under the Securities Act of 1934 as well as exchange listing - - The potential trading price of the new Series J Preferred Stock subsequent to the merger - - Proposed terms of the Series J Preferred Stock including but not limited to liquidation preference, dividend yield, call protection, and voting rights - - Dissenters' rights under Ohio law for both the Series F and Series G Preferred Shareholders - - Particular features of each Series such as call protection, maturity dates and the tax treatment of dividends and the valuation of such features; and - - The fact that the RASP is the owner of a majority of each issue - -------------------------------------------------------------------------------- [LIBRA INVESTMENTS, INC. LOGO] PAGE 7 8 AMERICAN FINANCIAL CORPORATION - -------------------------------------------------------------------------------- TERMS OF THE NEW SERIES J PREFERRED STOCK LIQUIDATION PREFERENCE: To be determined NUMBER OF SHARES: To be determined ($70 million liquidation preference in aggregate) DIVIDEND RATE: 8% annual rate, payable semi-annually and accruing from 11/1/97; (represents a spread of 200 basis points over the ten year treasury) VOTING POWER: In aggregate 21% of the voting power of AFC REGISTRATION/LISTING: The new Series J will be an exempt security pursuant to the Securities Act of 1933, and thus freely transferable. Registration under the Securities Act of 1934 will be undertaken and the Series J will be listed on the Pacific Stock Exchange. REDEMPTION: No mandatory redemption. Redeemable (in whole or in part) at the option of AFC at the following redemption prices: at the end of 8 years at 103.0% of liquidation preference, at the end of 9 years at 101.5% and at the end of 10 years at 100.0%. OTHER: The transaction requires that $70 million liquidation preference is issued - if it is oversubscribed then shares will be issued pro-rata. It is a condition of the merger that AFC arrange, either through the election of its Preferred Shareholders or through a standby underwriting, for the Series J Preferred to be fully subscribed. ASSUMED TRADING RANGE: It is assumed that the Series J Preferred Stock will trade in a range at or near its liquidation preference as prevailing yields for comparable securities range from 7.50% to 8.50%. - -------------------------------------------------------------------------------- [LIBRA INVESTMENTS, INC. LOGO] PAGE 8 9 AMERICAN FINANCIAL CORPORATION - -------------------------------------------------------------------------------- TERMS OF THE SERIES F PREFERRED STOCK LIQUIDATION PREFERENCE: $20.00 per share CURRENT MARKET BID PRICE: $21.50 per share (on a strip price basis) NUMBER OF SHARES: 11,900,725 ($238 million liquidation preference in aggregate) DIVIDEND RATE: $1.80 per share; 8.4% current yield PAYMENT DATES: June 3rd and December 3rd RECORD DATES: May 15th and November 15th VOTING POWER: Together with Series G, approximately 21% of the voting power of AFC REDEMPTION: The Series F Stock is non-redeemable OTHER: 63% of the shares are held by the RASP - -------------------------------------------------------------------------------- [LIBRA INVESTMENTS, INC. LOGO] PAGE 9 10 AMERICAN FINANCIAL CORPORATION - -------------------------------------------------------------------------------- TERMS OF THE NEW SERIES G PREFERRED STOCK LIQUIDATION PREFERENCE: $10.50 per share NUMBER OF SHARES: 1,964,158 ($20.6 million liquidation preference in aggregate) DIVIDEND RATE: $1.05 per share; 10.0% current yield PAYMENT DATES: March 3rd and September 3rd RECORD DATES: February 15th and August 15th VOTING POWER: Together with Series F, approximately 21% of the voting power of AFC REDEMPTION: In whole or in part, at anytime or from time to time, at $10.50 per share plus any accrued or declared but unpaid dividends. OTHER: 80% of the shares are held by the RASP - -------------------------------------------------------------------------------- [LIBRA INVESTMENTS, INC. LOGO] PAGE 10 11 AMERICAN FINANCIAL CORPORATION - ------------------------------------------------------------------------------- AFG CORPORATE ORGANIZATIONAL CHART AS OF OCTOBER 2, 1997 ---------------------------------- American Financial Group, Inc. Ticker: AFGNYSE Stock Price: $45,875 Shares Outstanding: 58.93(a) Market Cap: $2.7 Billion ---------------------------------- - --------------------------------- 100% American Premier Underwriters, Inc. ---------------------------------- - -------------------------------- American Financial Corporation $163MM of Preferred Stock (259MM Liquidation preference) ---------------------------------- 100% ---------------------------------- Great American Holding Corporation ---------------------------------- 100% 100% ------------------- ---------------------------------- Subsidiaries of Great American Insurance Corporation American Premier ---------------------------------- Underwriters, Inc. ------------------- 70% ---------------------------------- ----------------------------- 6% American Annuity Group, Inc. American Financial Ticker: AAGNYSE Enterprises, Inc. ------------------------ Stock Price: $71.625 Ticker: AFE/PAC-CHIC Chiquita Brands Shares Outstanding: 43.2MM Stock Price: $42.00 International, Inc. Market Cap: $934 Million Shares Outstanding: 13.6MM Ticker: CQB/NYSE ----------------------------------- Market Cap: $571 Million Stock Price: $16.00 ----------------------------- Shares Outstanding: 56.3MM 100% Market Cap: $901 Million ------------------------------------- ------------------------ Great American Life Insurance Company ------------------------------------- (a) Excludes 8.7 million shares owned by AFC and 10.0 million shares owned by AFE.
- -------------------------------------------------------------------------------- [LIBRA INVESTMENTS, INC. LOGO] PAGE 11 12 AMERICAN FINANCIAL CORPORATION - ------------------------------------------------------------------------------- AMERICAN FINANCIAL GROUP CORPORATE ORGANIZATIONAL CHART PRO FORMA FOR THE TRANSACTION ---------------------------------- | AFG HOLDINGS | ---------------------------------- 100% ---------------------------------- 19% | American Financial Group, Inc. | ---------------------------------- 100% ------------------------------------ 01% ---------------------------------- |American Premier Underwriters, Inc.| | American Financial Corporation | ------------------------------------ | $70MM Preferred Stock | ---------------------------------- 100% 100% ------------------- ---------------------------------- |Subsidiaries of | |Great American Holding Corporation| |American Premier | ---------------------------------- 17% |Underwriters, Inc.| ------------------- 100% 5% ---------------------------------- ---------------------- |Great American Insurance Company| 78% | American Financial | 6% ---------------------------------- | Enterprises, Inc. | ---------------------- 1% 1% 70% 10% ------------------------------------ 31% | American Annuity Group, Inc. | ------------------------------------ 100% --------------------- 5% ------------------------------------- |Chiquita Brands | |Great American Life Insurance Company| |International, Inc. | ------------------------------------- ---------------------
- -------------------------------------------------------------------------------- [LIBRA INVESTMENTS, INC. LOGO] PAGE 12 13 AMERICAN FINANCIAL CORPORATION - ------------------------------------------------------------------------------- AFG PRO FORMA CONSOLIDATED BALANCE SHEET
---------------------------------------- Pro forma Adjustments ---------------------------------------- Pro Forma Historical A FEI Merger AFC ------------------------- 6/30/97 All Stock 50% Cash Merger All Stock 50% Cash --------- --------- -------- --------- --------- -------- ASSETS Cash and investments $11,993.8 $ 7.1 (a) $ (44.1) (d) $(235.8)(f) $11,765.1 $11,713.9 Recoverables from reinsurance and prepaid reinsurance premiums 951.5 -- -- -- 951.5 951.5 Agents Balances and Premiums Receivable 676.7 -- -- -- 676.7 676.7 Other Assets 1,736.1 -- -- -- 1,736.1 1,736.1 --------- -------- ------- ------- --------- --------- TOTAL ASSETS $15,358.1 $ 7.1 $ (44.1) $(235.8) $15,129.4 $15,078.2 ========= ======== ======= ======== ========= ========= LIABILITIES AND CAPITAL Unpaid Losses and Loss Adjacent Expense 4,086.0 -- -- -- 4,086.0 4.086.0 Unearned Premiums 1,336.8 -- -- -- 1,336.8 1,336.8 Annuity Benefits Accumulated 5,269.5 -- -- -- 5,469.5 5,469.5 Life, Accident, and Health Benefit Reserve 589.5 -- -- -- 589.5 589.5 Long-term Debt 470.1 -- -- -- 470.1 470.1 Other Liabilities 1,131.2 -- -- -- 1,131.2 1,131.2 --------- -------- ------- -------- --------- --------- TOTAL LIABILITIES $13,083.1 $ -- $ -- $ -- $13,083.1 $13,083.1 Minority Interest $ 656.1 $ (70.7)(b) $(70.7)(b) $ (92.4)(g) $ 493.0 $ 493.0 Common Stock and Capital Surplus 779.8 77.8 (c) 26.6 (e) (143.4)(f) 714.2 663.0 Retained Earnings 600.5 -- -- -- 600.5 600.5 Net unrealized gains on Marketable Securities (Net of Deferred Income Taxes) 238.6 -- -- -- 238.6 238.6 --------- -------- ------- -------- --------- --------- TOTAL SHAREHOLDERS' EQUITY $ 1,618.9 $ 77.8 $ 26.6 $ (143.4) $ 1,553.3 $ 1,502.1 --------- -------- ------- -------- --------- --------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $15,358.1 $ 7.1 $ (44.1) $ (235.8) $15,129.4 $15,078.2 ========= ======== ======= ======== ========= =========
- -------------------------------------------------------------------------------- [LIBRA INVESTMENTS, INC. LOGO] PAGE 13 14 AMERICAN FINANCIAL CORPORATION - ------------------------------------------------------------------------------- AFG PRO FORMA CONSOLIDATED INCOME STATEMENT
----------------------------------------- Pro forma Adjustments ----------------------------------------- Pro Forma Historical A FEI Merger AFC ------------------------ 12/31/96 All Stock 50% Cash Merger All Stock 50% Cash --------- -------- -------- --------- --------- --------- REVENUE Insurance Preimiums $ 2,948.1 $ -- $ -- $ -- $ 2,948.1 $ 2,948.2 Investment Income 946.4 -- -- -- 946.4 946.4 Other Income 320.9 -- -- -- 320.9 320.9 --------- -------- ------- --------- --------- --------- TOTAL REVENUE $ 4,115.4 $ -- $ -- $ -- $ 4,115.4 $ 4,115.4 ========= ======== ======== ========= ========= ========= COST AND EXPENSES Property and Casualty Insurance: Losses and Loss Adjustment Expense 2,131 4 -- -- -- 2,131.4 2,131.4 Commissions and Other Underwriting Expense 793.8 -- -- -- 793.8 793.8 Annuity, Life, & Health Benefit 364.1 -- -- -- 364.1 364.1 Interest Change on Borrowed Money 76.1 (0.7)(h) 2.9(h) 16.5(h) 91.9 95.5 Minority Interest 47.8 (8.3)(i) (8.3)(i) (17.8)(k) 21.7 21.7 Other Operating and General Expenses 348.9 -- -- -- 348.9 348.9 --------- -------- -------- --------- --------- --------- TOTAL COSTS AND EXPENSES $ 3,762.1 $ (9.0) $ (5.4) $ (1.3) $ 3,751.8 $ 3,755.4 --------- -------- -------- --------- --------- --------- EBT $ 353.3 $ 9.0 $ 5.4 $ 1.3 $ 363.6 $ 360.0 Provision for Income Taxes 91.3 0.2 (i) (1.0)(j) (5.8)(j) 85.7 84.5 --------- -------- -------- --------- --------- --------- NET INCOME 262.0 8.8 6.4 7.1 277.9 275.5 ========= ======== ======== ========= ========= ========= Average Number of Shares Outstanding $ 60.8 $ 2.8 $ 6.4 $ 7.1 $ 277.9 $ 275.5 EARNINGS PER SHARE 4.31 4.37 4.43
- -------------------------------------------------------------------------------- [LIBRA INVESTMENTS, INC. LOGO] PAGE 14 15 AMERICAN FINANCIAL CORPORATION - -------------------------------------------------------------------------------- AFG PRO FORMA CONSOLIDATED INCOME STATEMENT - 6 MONTHS ENDED 6/309/97
----------------------------------- Pro Forma Adjustments ----------------------------------- Pro Forma HISTORICAL AFEI Merger AFC ---------------------- 6/30/97 All Stock 50% Cash Merger All Stock 50% Cash --------- --------- --------- --------- --------- --------- REVENUE Insurance Premiums $ 1,414.8 $ -- $ -- $ -- $ 1,414.8 $ 1,414.8 Investment Income 427.5 -- -- -- 427.5 427.5 Other Income 91.1 -- -- -- 91.1 91.1 --------- --------- --------- --------- --------- --------- TOTAL REVENUE $ 1,933.4 $ -- $ -- $ -- $ 1,933.4 $ 1,933.4 COST AND EXPENSES Property and Casualty Insurance: Losses & Loss Adjustment Expense 964.5 964.5 -- -- -- 964.5 Commissions and Other Underwriting Expense 377.6 377.6 -- -- -- 377.6 Annuity, Life, & Health Benefits 189.4 189.4 -- -- -- 189.4 Interest Charge on Borrowed Money 27.6 (0.3)(h) 1.5(h) 8.3(h) 35.6 37.4 Minority Interest 30.1 (0.6)(i) (0.6)(i (8.9)(k 20.6 20.6 Other Operating and General Expenses 147.2 147.2 -- -- -- 147.2 --------- --------- --------- --------- --------- --------- TOTAL COSTS AND EXPENSES $ 1,736.4 $ (0.9) $ 0.9 $ (0.6) $ 1,734.9 $ 1,736.7 --------- --------- --------- --------- --------- --------- EBT $ 197.0 $ 0.9 $ (0.9) $ 0.6 $ 198.5 $ 196.7 Provision for Income Taxes 72.6 0.1(j) (0.3)(j (2.9)(j 69.8 69.4 --------- --------- --------- --------- --------- --------- NET INCOME 124.4 128.7 0.8 (0.6) 3.5 127.3 ========= ========= ========= ========= ========= ========= Average Number of Shares Outstanding 60.2 2.8 1.4 -- 63.0 61.6 Earnings per Share $ 2.07 $ 2.04 $ 2.07
- -------------------------------------------------------------------------------- [LIBRA INVESTMENTS, INC. LOGO] PAGE 15 16 AMERICAN FINANCIAL CORPORATION - -------------------------------------------------------------------------------- AFG PRO FORMA NOTES TO FINANCIAL STATEMENTS (a) Assumes $7.1 million in cash is received from the exercise of options for 337,500 shares of AFEI common stock at an average price of $20.97 per share. (b) Elimination of the interests of minority shareholders in AFEI. (c) Reflects the issuance of 2,766,107 shares of AFG Common Stock in exchange for a like number of AFEI shares. (d) Assumes $7.1 million in cash is received from the exercise of options as discussed in note (a) and $51.2 million ($37.00 per share) in cash is paid for 50% of the 2,766,107 AFEI shares. (e) Represents the issuance of 1,383,054 shares of AFG Common Stock in exchange for a like number of AFEI shares less the excess ($12.3 million) of cash paid over the book value of minority shares acquired for cash. (f) Represents exchange of AFC Series F and Series G preferred stock for cash and issuance of AFC Series J preferred stock as follows: 11,900,725 shares of AFC Series F preferred at $24.00 per share $285.6 1,964,158 shares of AFC Series G preferred at $10.50 per share 20.6 Less shares exchanged for AFC series J preferred (70.4) ------ Total cash assumed used to retire AFC preferred 235.8 AFC Series J assumed issued in exchange for AFC preferred 70.4 ------ 306.2 Carrying value of AFC Series F and G preferred stock 162.8 ------ Charge to capital surplus $143.4 ------
(g) Represents excess of carrying value of AFC Series F and Series G preferred stock assumed retired ($162.8 million) over the estimated fair value of AFC Series J preferred stock assumed issued ($70.4 million). (h) Assumes funds used to retire AFEI common and AFC preferred, net of cash received from the exercise of AFEI stock options, had been borrowed at a rate of 7%. (i) Represents elimination of AFG's minority interest in AFEI's historical earnings. (j) Represents the statutory federal tax rate of 35% applied to the adjustments to pretax earnings excluding interest. (k) Represents the net reduction in AFC's preferred dividend requirement from the assumed retirement of the AFC Series F and Series G preferred and issuance of the Series J preferred. - -------------------------------------------------------------------------------- [LIBRA INVESTMENTS, INC. LOGO] PAGE 16 17 AMERICAN FINANCIAL CORPORATION - -------------------------------------------------------------------------------- AFC PRO FORMA CONSOLIDATED BALANCE SHEET
HISTORICAL ------------ ASSETS 6/30/97 ADJUSTMENTS PRO FORMA -------------- ------------ -------------- Cash and Investments $ 11,988.1 $ (235.8)(a) $ 11,752.3 Recoverables from reinsurance and prepaid reinsurance premiums 951.5 - 951.5 Agents Balances and Premiums Receivable 676.7 - 676.7 Other Assets 1,731.9 - 1,731.9 ============== ============ ============== TOTAL ASSETS $ 15,348.2 $ (235.8) $ 15,112.4 ============== ============ ============== LIABILITIES AND CAPITAL Unpaid Losses and Loss Adjustement Expense 4,086.0 - 4,086.0 Unearned Premiums 1,336.8 - 1,336.8 Annuity Benefits Accumulated 5,469.5 - 5,469.5 Life, Accident, and Health Benefit Reserve 589.5 - 589.5 Payable to AFG 351.8 - 351.8 Long-term Debt 470.1 - 470.1 Other Liabilities 1,122.8 - 1,122.8 -------------- ------------ -------------- TOTAL LIABILITITES $ 13,426.5 $ - $ 13,426.5 Minority Interest $ 476.4 - 476.4 Preferred Stock 162.8 $ (92.4)(b) 70.4 Common Stock and Capital Surplus 937.6 (31.2)(a) 906.4 Retained Earnings 112.2 (112.2)(a) - Net unrealized gains on Marketable Securities (Net of Deferred Income Taxes) 232.7 - 232.7 -------------- ------------ -------------- TOTAL SHAREHOLDERS' EQUITY $ 1,445.3 $ (235.8) $ 1,209.5 ============== ============ ============== TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 15,348.2 $ (235.8) $ 15,112.4 ================ ============ ==============
- -------------------------------------------------------------------------------- [LIBRA INVESTMENTS, INC. LOGO] PAGE 17 18 AMERICAN FINANCIAL CORPORATION - -------------------------------------------------------------------------------- AFC PRO FORMA CONSOLIDATED INCOME STATEMENT
HISTORICAL ---------------- REVENUE 12/31/96 ADJUSTMENTS PRO FORMA ----------- ----------- ---------- Insurance Premiums $2,948.1 $ - $ 2,948.1 Investment Income 845.3 - 845.3 Other Income 320.4 - 320.4 --------- ------ ---------- TOTAL REVENUE $4,113.8 $ - $ 4,113.8 COST AND EXPENSES Property and Casualty Insurance: Losses & Loss Adjustment Expense 2,131.4 - 2,131.4 Commissions and Other Underwriting Expense 793.8 - 793.8 Annuity, Life, & Health Benefits 364.1 - 364.1 Interest Charge on Borrowed Money 86.1 16.5 (d) 102.6 Other Operating and General Expenses 400.4 - 400.4 --------- ------ ---------- TOTAL COSTS AND EXPENSES $3,775.8 $ 16.5 $3,792.3 --------- ------ ---------- EBT $ 338.0 (16.5) $ 321.5 Provision for Income Taxes 89.7 (5.8)(e) 83.9 --------- ------ ---------- EARNINGS BEFORE EXTRAORDINARY ITEMS 248.3 (10.7) 237.6 Preferred Dividend Requirement $ 24.9 (17.8)(f) 7.1 EARNINGS BEFORE EXTRAORDINARY ITEMS APPLICABLE ======== ====== ========== TO THE COMMON SHAREHOLDER $ 223.4 $ 7.1 230.5 ======== ====== ==========
- -------------------------------------------------------------------------------- [LIBRA INVESTMENTS, INC. LOGO] PAGE 18 19 AMERICAN FINANCIAL CORPORATION - ------------------------------------------------------------------------------- AFC PRO FORMA CONSOLIDATED INCOME STATEMENT - 6 MONTHS ENDED 6/30/97
Historical 6/30/97 Adjustments Pro Forma ------- -------- ------- REVENUE Insurance Premiums $1,414.8 $ -- $1,414.8 Investment Income 427.3 -- 427.3 Other Income 91.1 -- 91.1 ------- -------- ------- TOTAL REVENUE $1,933.2 $ -- $1,933.2 COST AND EXPENSES Property and Casualty Insurance: Losses and Loss Adjustment Expense 964.5 -- 964.5 Commissions and Other Underwriting Expense 377.6 -- 377.6 Annuity, Life, & Health Benefits 189.4 -- 189.4 Interest Charge on Borrowed Money 46.1 8.3 (d) 54.4 Other Operating and General Expenses 163.9 -- 163.9 ------- -------- ------- TOTAL COSTS AND EXPENSES $1,741.5 $ 8.3 $1,749.8 ------- -------- ------- EBT $ 191.7 (8.3) $ 183.4 Provision for Income Taxes 69.0 (2.9)(e) 66.1 ------- -------- ------- EARNINGS BEFORE EXTRAORDINARY ITEMS 122.7 (5.4) 117.3 Preferred Dividend Requirement 11.7 (8.9)(f) 2.8 ------- -------- ------- EARNINGS BEFORE EXTRAORDINARY ITEMS APPLICABLE TO THE COMMON SHAREHOLDER $111.0 $ 3.5 $ 114.5 ====== ======== =======
- -------------------------------------------------------------------------------- [LIBRA INVESTMENTS, INC. LOGO] PAGE 19 20 AMERICAN FINANCIAL CORPORATION - ------------------------------------------------------------------------------- AFC PRO FORMA NOTES TO FINANCIAL STATEMENTS (a) Represents exchange of AFC Series F and Series G preferred stock for cash and issuance of AFC Series J preferred stock as follows: 11,900,725 shares of AFC Series F preferred at $24.00 per share $285.6 1,964,158 shares of AFC Series G preferred at $10.50 per share 20.6 Less shares exchanged for AFC series J preferred (70.4) ------ Total cash assumed used to retire AFC preferred 235.8 AFC Series J assumed issued in exchange for AFC preferred 70.4 ------ 306.2 Carrying value of AFC Series F and G preferred stock 162.8 ------ Charge to capital surplus and retained earnings $142.4 (b) Represents excess of carrying value of AFC Series F and Series G preferred stock assumed retired ($162.8 million) over the estimated fair value of AFC Series J preferred stock assumed issued ($70.4 million) (c) There were 45 million shares of AFC common Stock outstanding at June 30, 1997, all of which were owned by AFG. As a result of the Merger, these shares will be converted into 11,041,000 shares of AFC Common Stock. The conversion of shares will have no effect on the amounts stated in AFC's balance sheet. (d) Assumes funds used to retire AFEI common and AFC preferred, net of cash received from the exercise of AFEI stock options, had been borrowed at a rate of 7%. (e) Represents the statutory federal tax rate of 35% applied to the adjustments to pretax earnings excluding interest. (f) Represents the net reduction in AFC's preferred dividend requirement from the assumed retirement of AFC Series F and Series G preferred and issuance of the Series J preferred in this transaction.
- -------------------------------------------------------------------------------- [LIBRA INVESTMENTS, INC. LOGO] PAGE 20 21 AMERICAN FINANCIAL CORPORATION - -------------------------------------------------------------------------------- 5 YEAR TRADING PRICES FOR SERIES F PREFERRED (INCLUDES ACCRUED DIVIDENDS) COMPOSITE/MID --------------------------------------------------------------------------------------------------- 24 - -------------- Last 22.06 on 09/26/97---------------------------------------------------------------------------------------------------- 22 High 23 on 04/04/97 Ave 18.16 (Close) ---------------------------------------------------------------------------------------------------- 20 Low 13.13 on 06/04/93 - ------------------------------------------------------------------------------------------------------------------------------ 18 - ------------------------------------------------------------------------------------------------------------------------------ 16 - ------------------------------------------------------------------------------------------------------------------------------ 14 - -------------------------------------------------------------------------------------------------------------------------------12 22Jan93 21May 24Sep 21Jan94 20May 23SEP 20JAN95 19MAY 22SEP 19JAN96 24MAY 20SEP 24JAN97 23MAY 19SEP
- -------------------------------------------------------------------------------- [LIBRA INVESTMENTS, INC. LOGO] PAGE 21 22 AMERICAN FINANCIAL CORPORATION - -------------------------------------------------------------------------------- RECENT TRADING PRICES OF THE SERIES F PREFERRED AMERICAN FINANCIAL CORPORATION 1997 WEEKLY STRIP PRICES $1.80 SERIES F
DATE ---- 3 - Jan 17 - Jan 31 - Jan 14 - Feb 28 - Feb 14 - Mar 28 - Mar 11 - Apr Transaction Announced 25 - Apr 9 - May 23 - May 6 - Jun 20 - Jun 4 - Jul 18 - Jul 1 - Aug 15 - Aug 29 - Aug 12 - Sep 26 - Sep
- -------------------------------------------------------------------------------- [LIBRA INVESTMENTS, INC. LOGO] PAGE 22 23 AMERICAN FINANCIAL CORPORATION - -------------------------------------------------------------------------------- RECENT TRADING PRICES OF THE SERIES G PREFERRED AMERICAN FINANCIAL CORPORATION 41.05 SERIES G
DATE 3 - Jan 13 - Jan 17 - Jan 23 - Jan 31 - Jan 7 - Feb 21 - Feb 24 - Feg 28 - Feb 7 - Mar 14 - Mar 21 - Mar 28 - Mar 8 - Apr 11 - Apr 15 - Apr 25 - Apr 2 - May 9 - May 16 - May 23 - May 28 - May 6 - Jun 13 - Jun 20 - Jun 27 - Jun 4 - Jul 11 - Jul 18 - Jul 25 - Jul 1 - Aug 8 - Aug 15 - Aug
- -------------------------------------------------------------------------------- [LIBRA INVESTMENTS, INC. LOGO] PAGE 23 24
American Financial Corporation - --------------------------------------------------------------------------------------------------------------- Valuation Date :10/02/97 Actual/Implied Offer Date Issuer Ticker Description Rating - --------------------------------------------------------------------------------------------------------------- Moody's S&P -------------------- AFC Preferreds 1 11/16/77 American Financial Corporation AFG Series F $1.80 Pref Ba1 BBB- 2 Various American Financial Corporation AFG Series G $1.05 Pref Ba1 BBB- Comparables : Split Rated Issues: 1 10/17/96 American Fin Capital Trust I AFG TOPRS Ba1 BBB- 2 11/4/96 AAG Capital Trust I AAG TOPRS Ba1 BBB- 3 3/2/97 AAG Capital Trust II AAG TOPRS Ba1 BBB- 4 5/10/95 Southern Union Financing I SUG TOPRS Ba1 BBB- 5 11/10/95 Developers Diversified Realty DDR Cum. Red. Pfd Shs Ba1 BBB- 6 8/3/94 Loewen Group Capital LP LWN MIPS Ba3 BB 7 11/14/96 Conseco Financing Trust CNC TOPRS Ba2 BBB- 8 10/22/96 Capita Preferred Trust TCC TOPRS Ba2 BBB- 9 3/1/96 Fremont General Financing I FMT TOPRS Ba2 BBB- 10 2/22/96 Canadian General Capital, Ltd. CANGEN TOPRS Ba2 BBB- Investment Grade Issues 1 1/29/97 Hawaiian Electric Ind Cap Tr I HE TOPRS Baa3 BBB- 2 2/16/96 Avalon Properties AVN Cum. Red. Pfd Shs Baa3 BBB- 3 5/8/96 Duquesne Capital, LP DQE MIPS Baa3 BBB 4 1/13/97 Enron Capital Trust II ENE TOPRS Baa3 BBB 5 3/11/97 PWG Capital Trust II PWJ TOPRS Baa2 BBB- AFG Debt Securities (g) 1 2/22/94 American Financial Corporation AFG Debentures Baa3 BBB 2 8/3/89 American Premier Underwriters AFG Subordinated Notes Ba1 BBB- 3 4/11/90 American Premier Underwriters AFG Subordinated Notes Ba1 BBB- 4 4/30/91 American Premier Underwriters AFG Subordinated Notes Ba1 BBB- 5 1/26/93 American Annuity Group AAG Senior Sub Notes Ba1 BBB- American Financial Corporation (continued) - --------------------------------------------------------------------------------------------------------------------------- Valuation Date :10/02/97 Date Call Amount Protection Maturity Offer Offer Date Issuer O/S Expires (a) (b) Price - --------------------------------------------------------------------------------------------------------------------------- AFC Preferreds 1 11/16/77 American Financial Corporation $ 238,000,000 Non-Callable - $ 20.00 2 Various American Financial Corporation $ 21,000,000 Callable - $ 10.50 Comparables : Split Rated Issues: 1 10/17/96 American Fin Capital Trust I $ 100,000,000 10/22/01 10/15/26 $ 25.00 2 11/4/96 AAG Capital Trust I $ 75,000,000 11/7/01 10/15/26 $ 25.00 3 3/2/97 AAG Capital Trust II $ 75,000,000 3/1/07 1/15/27 $1,000.00 4 5/10/95 Southern Union Financing I $ 100,000,000 5/17/00 5/17/25 $ 25.00 5 11/10/95 Developers Diversified Realty $ 100,000,000 11/10/00 - $ 25.00 6 8/3/94 Loewen Group Capital LP $ 75,000,000 8/31/04 - $ 25.00 7 11/14/96 Conseco Financing Trust $ 275,000,000 11/19/01 11/30/26 $ 25.00 8 10/22/96 Capita Preferred Trust $ 200,000,000 10/25/06 - $ 25.00 9 3/1/96 Fremont General Financing I $ 100,000,000 3/31/01 3/31/26 $ 25.00 10 2/22/96 Canadian General Capital, Ltd. $ 100,000,000 3/31/01 3/31/26 $ 25.00 Investment Grade Issues 1 1/29/97 Hawaiian Electric Ind Cap Tr I $ 100,000,000 2/4/02 - $ 25.00 2 2/16/96 Avalon Properties $ 111,375,000 2/15/01 - $ 25.00 3 5/8/96 Duquesne Capital, LP $ 150,000,000 5/31/01 5/31/44 $ 25.00 4 1/13/97 Enron Capital Trust II $ 150,000,000 1/16/02 - $ 25.00 5 3/11/97 PWG Capital Trust II $ 175,000,000 3/14/02 3/1/37 $ 25.00 AFG Debt Securities (g) 1 2/22/94 American Financial Corporation $ 203,000,000 4/20/99 4/20/04 $ 100.00 2 8/3/89 American Premier Underwriters $ 91,700,000 Non-callable 8/1/99 $ 100.00 3 4/11/90 American Premier Underwriters $ 51,300,000 Non-callable 4/15/00 $ 99.60 4 4/30/91 American Premier Underwriters $ 16,800,000 Non-callable 5/1/11 $ 100.00 5 1/26/93 American Annuity Group $ 79,303,000 2/1/98 2/1/03 $ 100.00 American Financial Corporation (continued) - --------------------------------------------------------------------------------------------------------------------------- Valuation Date :10/02/97 Spread Initial Current Current To 30 Yr Offer Date Issuer Yield Price (c) Yield(Bps)(d) (b) - --------------------------------------------------------------------------------------------------------------------------- AFC Preferreds 1 11/16/77 American Financial Corporation 9.00% $ 23.40 7.690% 139.00 2 Various American Financial Corporation 10.00% $ 10.50 10.000% 370.00 Comparables : Split Rated Issues: 1 10/17/96 American Fin Capital Trust I 9.13% $ 26.47 8.617% 231.69 2 11/4/96 AAG Capital Trust I 9.25% $ 26.47 8.737% 243.73 3 3/2/97 AAG Capital Trust II 8.88% $ 1,080.00 8.218% 191.75 4 5/10/95 Southern Union Financing I 9.48% $ 26.58 8.917% 261.68 5 11/10/95 Developers Diversified Realty 9.50% $ 25.89 9.172% 287.20 6 8/3/94 Loewen Group Capital LP 9.45% $ 27.08 8.843% 254.26 7 11/14/96 Conseco Financing Trust 9.16% $ 26.52 8.636% 233.57 8 10/22/96 Capita Preferred Trust 9.06% $ 27.08 8.364% 206.38 9 3/1/96 Fremont General Financing I 9.00% $ 26.14 8.606% 230.63 10 2/22/96 Canadian General Capital, Ltd. 9.13% $ 25.83 8.816% 251.64 TRIMMED AVG (f) NA 8.693% 239.25 AVERAGE NA 8.766% 246.61 MEDIAN NA 8.726% 242.61 Investment Grade Issues 1 1/29/97 Hawaiian Electric Ind Cap Tr I 8.36% $ 25.83 8.090% 179.00 2 2/16/96 Avalon Properties 9.00% $ 25.98 8.660% 236.01 3 5/8/96 Duquesne Capital, LP 8.38% $ 25.85 8.105% 180.50 4 1/13/97 Enron Capital Trust II 8.13% $ 25.65 7.920% 161.97 5 3/11/97 PWG Capital Trust II 8.08% $ 25.53 7.913% 161.26 TRIMMED AVG (f) NA 8.137% 183.75 AVERAGE NA 8.137% 183.75 MEDIAN NA 8.090% 179.00 AFG Debt Securities (g) 1 2/22/94 American Financial Corporation 9.75% $ 108.03 8.945% 264.50 2 8/3/89 American Premier Underwriters 9.75% $ 106.75 9.133% 283.35 3 4/11/90 American Premier Underwriters 10.63% $ 109.63 9.809% 350.89 4 4/30/91 American Premier Underwriters 10.88% $ 127.63 9.692% 339.17 5 1/26/93 American Annuity Group 11.13% $ 104.75 10.620% 432.00 American Financial Corporation (continued) Comparable Preferred Stock Analysis - ------------------------------------------------------------------------------------------------------------------------------------ Valuation Date :10/02/97 Spread Spread Spread Yield to To 30 Yr Yield to To 10 Yr Yield to To Comp Offer Date Issuer Maturity (b) (Bps) (d) 10 Yr (Bps) (d) Worst (e) (Bps) (d) - ------------------------------------------------------------------------------------------------------------------------------------ AFC Preferreds 1 11/16/77 American Financial Corporation 7.559% 125.90 NA NA 7.559% 125.90 2 Various American Financial Corporation 10.000% 370.00 10.000% 400.00 10.000% 400.00 Comparables : Split Rated Issues: 1 10/17/96 American Fin Capital Trust I 8.571% 227.08 8.249% 224.90 7.408% 150.84 2 11/4/96 AAG Capital Trust I 8.692% 239.24 8.375% 207.49 7.550% 156.00 3 3/2/97 AAG Capital Trust II 8.151% 185.10 8.216% 191.60 8.216% 191.60 4 5/10/95 Southern Union Financing I 8.862% 256.24 8.502% 250.24 6.794% 95.38 5 11/10/95 Developers Diversified Realty 9.147% 284.74 8.952% 295.22 8.167% 232.70 6 8/3/94 Loewen Group Capital LP 8.670% 237.04 8.211% 221.13 7.387% 139.71 7 11/14/96 Conseco Financing Trust 8.588% 228.75 8.260% 226.04 7.417% 157.72 8 10/22/96 Capita Preferred Trust 8.303% 200.25 7.846% 184.62 7.762% 176.15 9 3/1/96 Fremont General Financing I 8.568% 226.81 8.293% 229.31 7.482% 164.17 10 2/22/96 Canadian General Capital, Ltd. 8.805% 250.46 8.605% 260.47 8.011% 217.11 8.636% 233.57 8.501% 229.10 7.696% 168.14 8.707% 240.73 8.547% 254.66 7.799% 185.97 8.629% 232.90 8.293% 229.31 7.520% 160.95 Investment Grade Issues 1 1/29/97 Hawaiian Electric Ind Cap Tr I 8.060% 175.99 7.846% 184.59 7.439% 159.87 2 2/16/96 Avalon Properties 8.629% 232.85 8.383% 238.34 7.646% 134.58 3 5/8/96 Duquesne Capital, LP 8.075% 177.50 7.872% 187.20 7.311% 131.10 4 1/13/97 Enron Capital Trust II 7.895% 159.50 7.726% 172.55 7.402% 161.97 5 3/11/97 PWG Capital Trust II 7.904% 160.35 7.757% 175.70 7.503% 161.26 8.112% 181.24 8.116% 191.68 7.539% 149.76 8.112% 181.24 7.917% 191.68 7.460% 149.76 8.060% 175.99 7.846% 184.59 7.439% 159.87 AFG Debt Securities (g) 1 2/22/94 American Financial Corporation 8.142% 215.20 NA NA 6.220% 50.00 2 8/3/89 American Premier Underwriters 6.154% 43.40 NA NA 6.154% 31.40 3 4/11/90 American Premier Underwriters 6.429% 66.90 NA NA 6.429% 66.90 4 4/30/91 American Premier Underwriters 7.579% 150.90 NA NA 7.579% 150.90 5 1/26/93 American Annuity Group 9.945% 395.54 NA NA 5.775% 67.00
TREASURY YIELDS AS OF 10/02/97 TREASURY YIELD CURVE FUNDS YIELD ----- ----- 5.56 U.S. 1 Year Treas 5.39% U.S. 2 Year Treas 5.72% U.S. 3 Year Treas 5.78% U.S. 4 Year Treas 5.84% U.S. 5 Year Treas 5.90% U.S. 7 Year Treas 5.99% U.S. 10 Year Treas 6.00% U.S. 30 Year Treas 6.30%
Notes : ------------------------------------------------------------------------- (a) Preferreds are all callable at par. (b) For securities without maturities, maturity date is assumed to be the call date in 2027. (c) Current price equal to strip price ( i.e. price exclusive of accrued dividends). All yields have been calculated using strip prices. (d) For AFG Debt Securities spreads have been calculated relative to the yields of comparable maturity treasuries. (e) Yield to Worst figures reflect bond equivalent calculations (semi-annual coupon payments). (f) Trimmed average is calculated by removing the highest and lowest value from the statistical sample. (g) Prices for AAG and APU Securities determined by YTW spreads. Libra Investments, Inc. has obtained certain of this information from information from company reports and/or other sources that it believes to be reliable, but has not verified this information and does not guarantee its accuracy. - -------------------------------------------------------------------------------- [LIBRA INVESTMENTS, INC. LOGO] PAGE 24 25 AMERICAN FINANCIAL CORPORATION - --------------------------------------------------------------------------------
Tender Offer Analysis Ratings Announce Date -------------- Date of Spread to Company/Target of Tender Description S&P Moody's 1st Call Maturiy Treasury - ----------------------------------------------------------------------------------------------------------------------------------- 1 The Williams Companies, Inc. 09/08/97 9 3/8% Debentures due 2021 BBB- Baa2 Non-call 11/15/21 46.00 2 Fort James Corporation 09/08/97 8.25% Senior Notes due 2002 BBB- Baa3 Non-call 02/01/02 50.00 3 Bally Total Fitness Holding Corp. 09/03/97 13% Senior Sub Notes due 2003 B- Caa 1/15/98 01/15/03 50.00 4 Carbide/Graphic Group, Inc. 09/02/97 11.5% Senior Notes due 2003 BB B1 9/l/98 09/01/03 50.00 5 Forest Oil 08/29/97 11.25% Senior Sub Notes due 2003 B B2 9/l/98 09/01/03 65.00 6 American Financial Corporation 08/28/97 9.75% Debentures due 2004 BBB Baa3 4/20/99 04/20/04 50.00 7 SC International Services, Inc. 08/25/97 13% Senior Sub Notes due 2005 B B2 10/1/00 10/01/05 175.00 8 Regency Health Services 08/21/97 12.25% Sub Notes due 2003 B- B3 7/15/00 07/15/03 100.00 9 Fresh Del Monte Produce N.V. 08/20/97 10% Series B Senior Notes due 2003 B+ B2 5/1/98 05/01/03 136.00 10 Mitchell Energy & Development 08/18/97 9.25% Senior Notes due 2002 BBB- Ba1 Non-call 01/15/02 30.00 11 Cole National Corp. 08/15/97 11.25% Senior Notes due 2001 BB Ba2 10/1/98 10/01/01 50.00 12 Regal Cinemas, Inc. 08/14/97 10.625% Senior Secured Notes due 2003 B+ B2 10/1/02 03/01/03 50.00 13 LaRoche Industries 08/12/97 13% Senior Sub Notes 2004 B B3 8/15/99 08/15/04 100.00 14 ITT Corporation 08/11/97 7.375% Debentures due 11/15/15 BBB Baa2 Non-ca11 11/15/15 90.00 15 ITT Corporation 08/11/97 7.75% Debentures due 11/15/25 BBB Baa2 11/15/05 11/15/25 130.00 16 Smith's Food & Drug Centers, In 08/08/97 Senior Sub Notes due 2007 ($30 Consent) B- B3 5/15/01 05/15/07 37.50 17 Bell & Howell Company 08/08/97 5% Series B Senior Discount Deb due 2005 B B3 3/1/00 03/0l/05 140.00 18 Valcor, Inc. 08/06/97 9.625% Senior Notes due 2003 B B1 11/l/98 11/01/03 137.O0 19 Safeway, Inc. 08/04/97 Senior Subordinated Debentures due 2007 BBB- Baa3 Non-call 03/15/07 32.00 20 Summit Communications Grp, Inc. 07/30/97 10.5% Senior Sub Debs due 2005 BB+ Ba3 4/15/99 04/15/05 37.50 21 Ivex Holdings Corp. 07/28/97 Discount Debs due 2005 B- Caa 11/3/97 03/15/05 150.00 22 Federal Paper Board 07/23/97 10% Debs due 2011 A- Baa1 Non-call 04/l5/11 55.00 23 Service Merchandise Co., Inc. 07/21/97 8 3/8% Senior Notes due 2001 B+ B2 Non-call 01/15/01 165.00 24 Alliance Gaming Corp. 07/03/97 12.875% Senior Notes due 2003 B+ B2 6/30/00 06/30/03 125.00 25 Polymer Group Inc. 07/02/97 12.25% Senior Notes B B1 7/15/98 7/15/02 75.00 26 First USA Capital Trust I 06/30/97 9.33% Capital Notes BB- Ba3 1/15/07 1/15/27 83.20 27 TAG Heuer International SA 06/25/97 12% Senior Sub Notes due 2005 B+ B3 12/15/00 12/15/05 100.00 28 Ocean Energy, Inc. 06/23/97 13.5% Senior Notes due 2004 NR B1 12/l/99 12/01/04 75.00 29 Cyprus Amax Minerals 06/19/97 9.875% Notes due 2001 BBB- Baa2 Non-call 06/13/01 25.00 30 Waban, Inc. 06/18/97 11% Senior Sub Notes NR B1 5/15/99 05/15/04 50.00 31 Foundation Health Systerms, Inc. 06/16/97 7 3/4% Senior Notes due 2003 NR NR Non-call 06/01/03 25.00 32 Four Seasons Hotels, Inc. 06/10/97 9 1/8% Notes BB+ Ba2 7/l/98 07/01/00 25.00 33 Tyco International, Ltd. 06/04/97 9.5% Debentures due 2022 A- Baa2 Non-call 05/01/22 70.00 34 Integrated Health Services 05/29/97 10.75% Senior Sub Notes B B1 7/15/99 1/15/04 100.70 35 Telex Communications 05/06/97 12% Senior Notes B B2 7/15/99 7/15/04 73.00 36 Boontown, Inc. 03/28/97 11.5% First Mortgage Notes due 2003 B B1 11/l/98 11/01/03 65.00 37 Thrifty Payless 01/22/97 12.25% Senior Sub Notes BBB Baa1 4/15/99 4/15/04 67.30 38 American Premier Underwriters 01/03/97 9.75% Subordinated Notes BBB- Ba1 Non-call 8/1/99 67.80 39 American Premier Underwriters 01/03/97 10.625% Subordinated Notes BBB- Ba1 4/15/00 4/15/00 66.80 40 American Premier Underwriters 01/03/97 10.875% Subordinated Notes BBB- Ba1 Non-call 5/1/11 152.50 41 Alamo Rent-A-Car 12/23/96 11.75% Senior Notes NR NR 1/31/01 1/31/06 134.40 42 Bally's Park Place 12/19/96 9.25% First Mtg Notes NR Ba3 3/15/99 3/15/04 129.00 43 Dell Computer Corporation 06/26/96 11 % Senior Notes BBB- NA 8/15/98 8/15/00 104.70
Spread Summary - ---------------- Average 82.33 Median 70.00 High 175.00 Low 25.00 - -------------------------------------------------------------------------------- [LIBRA INVESTMENTS, INC. LOGO] PAGE 25 26 AMERICAN FINANCIAL CORPORATION - -------------------------------------------------------------------------------- DISCOUNTED CASH FLOW ANALYSIS SERIES F PREFERRED STOCK Current Cash Flows of $1.80 per share (assumed to mature in 30 years at liquidation preference)
Discount Rate NPV over 30 yrs ------------- --------------- 7.50% $ 23.54 8.00% $ 22.25 8.50% $ 21.07
- -------------------------------------------------------------------------------- [LIBRA INVESTMENTS, INC. LOGO] PAGE 26 27 AMERICAN FINANCIAL CORPORATION - -------------------------------------------------------------------------------- RANGE OF VALUE: SERIES F PREFERRED
VALUATION METHODOLOGY: LOW HIGH COMMENTS - --------------------------------------- ----------- -------- ----------------------------------------------------- Recent Trading Prices $ 20.00 $ 22.00 Based on Range of Strip Prices for YTD 1997 Comparable Security Analysis $ 21.20 $ 24.00 Based on Market Yields of 7.50% to 8.50% Tender Offer Analysis $ 22.75 $ 26.00 Based on Spread to 30 year treasury of 50 to 150bp Discounted Cash Flow $ 21.00 $ 23.50 Based on Discount Rates of 7.50% to 8.50% RANGE OF VALUE: $ 20.00 $ 26.00
- -------------------------------------------------------------------------------- [LIBRA INVESTMENTS, INC. LOGO] PAGE 27 28 AMERICAN FINANCIAL CORPORATION - -------------------------------------------------------------------------------- AFG SUMMARY OF RECENT TRANSACTIONS
DATE ENTITY TRANSACTION - --------- -------------------------------------------- ------------------------------------------------------------- 9/30/97 American Financial Corp. $164MM Tender Offer for 9 3/4% Debentures Due 2004 @ price of 109 or yield equal to 50 basis points above comparable 7% treasury due 1999 5/21/97 American Annuity Group Capital Trust III $75MM ROPES 7.25% due 2041 3/27/97 American Financial Group Repurchase of 1.7MM common shares @ average price of $35.88 3/26/97 American Annuity Group $49MM Repurchase of Series B Preferred @ 8.854% yield (intercompany transaction) 3/2/97 American Annuity Group Capital Trust II $75MM TOPRS 8.875% due 2027 1/3/97 American Premier Underwriters $96MM Bond tender (see Section 8) 12/96 American Financial Corp. $31.9MM Redemption of 1.6MM Series F Preferred @ $20 per share 12/96 American Financial Corp. $16.8MM Series G Preferred issued to ESORP @ $10.50 per share 11/4/96 American Annuity Group Capital Trust I $75MM TOPRS 9.25% due 2026 10/17/96 American Financial Capital Trust I $100MM TOPRS 9.125% due 2026 10/96 American Financial Corp. $5MM Purchase of 250,000 Series F Preferred for ESORP @ $20 per share 1996 American Financial Corp. $138.2MM Repurchase of 93/4% debentures due 2004 @ average price of 107 or yield of 8.38% 1996 American Premier Underwriters $64.8MM Repurchase of various Notes @ an average price of 110 1996 American Annuity Group $78MM Repurchase of various Notes @ an average price of 108
- -------------------------------------------------------------------------------- [LIBRA INVESTMENTS, INC. LOGO] PAGE 28 29 AMERICAN FINANCIAL CORPORATION - -------------------------------------------------------------------------------- DAILY YIELD FOR THE 30 YEAR TREASURY: YEAR TO DATE 24 14 Feb 7 Mar 28 10 Apr 9 May 30 20 Jun 11 Jul 1 Aug 22 12 Sep
BGN/NY/CLOSE/MID - ---------------- Last 6.295 on 10/02/97 High 7.169 on 04/14/97 Ave 6.752 Low 6.295 on 10/02/97 - -------------------------------------------------------------------------------- [LIBRA INVESTMENTS, INC. LOGO] PAGE 29 30 AMERICAN FINANCIAL CORPORATION - -------------------------------------------------------------------------------- WEEKLY YIELD FOR THE 30 YEAR TREASURY FOR THE PAST THREE YEARS 16 Dec 94 24 Feb 95 5 May 14 Jul 22 Sep 1 Dec 9 Feb 96 19 Apr 28 Jun 6 Sep 15 Nov 24 Jan 97 4 Apr 13 Jun 22 Aug BGN/NY/CLOSE/MID - ---------------- Last 6.367 on 09/26/97 High 6.139 on 11/04/94 Ave 6.875 Low 5.948 on 12/29/95 - -------------------------------------------------------------------------------- [LIBRA INVESTMENTS, INC. LOGO] PAGE 30
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