SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) November 19, 1996
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Chartwell Re Holdings Corporation
(Exact Name of Registrant as Specified in its Charter)
Delaware 0-28188 06-1438493
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
Four Stamford Plaza, P.O. Box 120043, Stamford, CT 06912-0043
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (203) 705-2500
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(Former Name or Former Address, if Changed Since Last Report)
Page 1 of 4 pages.
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Item 2. Acquisition or Disposition of Assets.
On October 14, 1996, Chartwell Re Corporation ("Chartwell") and Archer Group
Holdings plc ("Archer") jointly announced the making by Chartwell Holdings
Limited ("CHL"), an indirect subsidiary of Chartwell, of a recommended cash
offer (the "Offer") of 92.5 pence for each ordinary share of Archer in issue
(each, an "Archer Share"). As at November 5, 1996, CHL owned or had received
acceptances of the Offer in respect of an aggregate of 35,393,712 Archer Shares,
or 93.5% of the Archer Shares in issue, and on such date, Chartwell declared the
Offer to be unconditional. As at the close of business on November 18, 1996, CHL
owned or had received acceptances in respect of 98.8% of the Archer Shares in
issue.
The Offer may remain open, but CHL is not required to keep it open, until
completion of the compulsory acquisition of the remaining 1.2% of Archer Shares
in issue under Sections 428 to 430E of the Companies Act 1985 which will occur
in January 1997. The Offer includes a Loan Note alternative whereby Archer
stockholders (other than those resident in the United States or in certain other
jurisdictions where regulatory restrictions apply) were permitted to elect to
receive one Pound Sterling in principal amount of Loan Notes instead of one
Pound Sterling of cash consideration.
The aggregate cost of acquiring the Archer Shares will be approximately $62.4
million (37.2 million Pounds Sterling), including expenses and the cost of
purchasing Archer management options. The purchase price is based on an exchange
rate of $1.6763 per 1 Pound Sterling which was the exchange rate in effect on
November 19, 1996. The foregoing acquisition cost will be funded by
approximately (i) $ 9.1 million contributed to CHL by Chartwell from its
existing funds, (ii) $16.8 million contributed to CHL by Chartwell Reinsurance
from its existing funds, (iii) proceeds from loans from First Union National
Bank N.A. ("First Union") in an aggregate principal amount of $27.2 million
which loans will be made to Chartwell's subsidiary, Chartwell Re Holdings
Corporation ("Re Holdings"), with the proceeds then loaned to CHL, and (iv) Loan
Notes issued by CHL in an aggregate principal amount of $9.3 million.
On November 14, 1996, Re Holdings repaid the outstanding borrowings under its
credit agreement with Fleet National Bank of Connecticut with the proceeds of a
$20 million principal amount loan from First Union.
Archer is the parent company of Archer Managing Agents Limited which is one of
the largest managing agencies in the Lloyd's marketplace with approximately 4%
of Lloyd's total underwriting capacity for the 1996 year of account. The largest
part of Archer's revenue is derived from fee based income on capacity managed
and commissions on syndicate profits. Archer's managing agency manages a group
of 11 Lloyd's syndicates (seven non-marine, one marine, one aviation, one motor
and one life) with 1996 capacity of approximately 420 million Pounds Sterling.
Approximately 80% of Archer syndicates' premium volume is derived from non-U.S.
sources. Approximately 37% of the 1996 capacity is supplied by corporate
capital.
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Additional information about the Offer, the Loan Notes and other funding of the
Offer, Archer and related matters is contained in the Form 8-K reports of
Chartwell and Re Holdings filed with the Securities and Exchange Commission on
October 18, 1996.
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits.
(a) Financial Statements of business acquired.
The following Archer financial statements will be filed as an
amendment to this report as soon as practicable:
Consolidated Profit and Loss Account for the nine months ended June 30,
1996 (unaudited) and the years ended September 30, 1995 and 1994.
Consolidated Balance Sheets as at June 30, 1996 (unaudited) and
September 30, 1995.
Consolidated Cash Flow Statements for the nine months ended June 30,
1996 (unaudited) and the years ended September 30, 1995 and 1994.
Notes to the Consolidated Financial Statements
Report of KPMG Chartered Accounts
(b) Pro Forma financial information.
The following condensed consolidated pro forma financial
statements (unaudited) reflecting consummation of the Registrant's tender offer
for the outstanding capital stock of Archer will be filed as an amendment to
this report as soon as practicable:
Condensed Consolidated Pro Forma Balance Sheet as at
September 30, 1996.
Condensed Consolidated Pro Forma Statements of Operations for the nine
months ended September 30, 1996 and the year ended December 31, 1995.
Notes to Condensed Consolidated Pro Forma financial Statements.
(c) Exhibits
None.
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SIGNATURE
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 hereunto duly authorized.
CHARTWELL RE HOLDINGS CORPORATION
Dated: November 20, 1996 By: /s/ Richard E.Cole
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Richard E. Cole
Chairman & CEO
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