UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
CNA SURETY CORPORATION
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(Name of Issuer)
Common Stock, $.01 par value
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(Title of Class of Securities)
12612L1008
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(CUSIP Number)
Jonathan D. Kantor, Esq. with copies to: and:
Senior Vice President, Robert A. Rosenbaum, Esq. John T. Kramer, Esq.
General Counsel and Secretary Dorsey & Whitney LLP Dorsey & Whitney LLP
Continental Casualty Company Pillsbury Center South Pillsbury Center South
CNA Plaza 220 South Sixth Street 220 South Sixth Street
Chicago, Illinois 60685 Minneapolis, MN 55402 Minneapolis, MN 55402
(312) 822-1384 (612) 340-5681 (612) 340-8702
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(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
May 26, 2000
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
/ /.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
1) Name of Reporting Person: Continental Casualty Company
SS or IRS Identification 36-2114545
Nos. of Above Persons:
2) Check the Appropriate Box (a) (b) X
If A Member of Group
(See Instructions)
3) SEC Use Only
4) Source of Funds
5) Check Box If Disclosure of
Legal Proceedings Is Required
Pursuant To Items 2(d) Or 2(e)
6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power 0
Shares
Beneficially Owned (8) Shared Voting Power 26,283,458 (1)
by Each Reporting
Person With: (9) Sole Dispositive Power 0
(10) Shared Dispositive Power: 26,283,458 (1)
11) Aggregate Amount Beneficially 26,283,458 (1)
Owned by Each Reporting Person
12) Check if the aggregate Amount in Row (9)
Exclude Certain Shares (See Instructions)
13) Percent of Class Represented
By Amount in Row 9 61.3% (1)
14) Type of Reporting
Person (See Instructions) IC
(1) Continental Casualty Company owns 9,754,692 shares directly through its
subsidiary National Fire Insurance Company of Hartford and 7,857,938 shares
indirectly through its subsidiary American Casualty Company of Reading,
Pennsylvania. The characterization of shared dispositive power with the parent
company is made solely as a consequence of SEC interpretations regarding control
of the subsidiary. Continental Casualty Company and its direct and indirect
parent companies, each specifically disclaims beneficial ownership of the
securities held by its subsidiaries.
<PAGE>
1) Name of Reporting Person: CNA Financial Corporation
SS or IRS Identification 36-6169860
Nos. of Above Persons:
2) Check the Appropriate Box (a) (b) X
If A Member of Group
(See Instructions)
3) SEC Use Only
4) Source of Funds
5) Check Box If Disclosure of
Legal Proceedings Is Required
Pursuant To Items 2(d) Or 2(e)
6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power 0
Shares
Beneficially Owned (8) Shared Voting Power 27,096,347 (2)
by Each Reporting
Person With: (9) Sole Dispositive Power 0
(10) Shared Dispositive Power: 27,096,347 (2)
11) Aggregate Amount Beneficially 27,096,347 (2)
Owned by Each Reporting Person
12) Check if the aggregate Amount in Row (9)
Exclude Certain Shares (See Instructions)
13) Percent of Class Represented
By Amount in Row 9 63.2% (2)
14) Type of Reporting
Person (See Instructions) HC
(2) CNA Financial Corporation holds none of the shares directly and
specifically disclaims beneficial ownership of the securities identified herein.
The securities identified are held by the following subsidiaries in the
following amounts: Continental Casualty Company (9,754,692 shares), National
Fire Insurance Company of Hartford (8,670,828 shares), American Casualty Company
of Reading Pennsylvania (7,857,938 shares), Continental Insurance Company
(270,963 shares), and Firemen's Insurance Company of Newark, New Jersey (541,926
shares). The characterization of shared dispositive power with the parent
company is made solely as a consequence of SEC interpretations regarding control
of the subsidiaries.
<PAGE>
1) Name of Reporting Person: Loews Corporation
SS or IRS Identification 13-2646102
Nos. of Above Persons:
2) Check the Appropriate Box (a) (b) X
If A Member of Group
(See Instructions)
3) SEC Use Only
4) Source of Funds AF
5) Check Box If Disclosure of
Legal Proceedings Is Required
Pursuant To Items 2(d) Or 2(e)
6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power 0
Shares
Beneficially Owned (8) Shared Voting Power 27,096,347 (3)
by Each Reporting
Person With: (9) Sole Dispositive Power 0
(10) Shared Dispositive Power: 27,096,347 (3)
11) Aggregate Amount Beneficially 27,096,347 (3)
Owned by Each Reporting Person
12) Check if the aggregate Amount in Row (9)
Exclude Certain Shares (See Instructions)
13) Percent of Class Represented
By Amount in Row 9 63.2% (3)
14) Type of Reporting
Person (See Instructions) HC
(3) Loews holds none of the shares directly and specifically disclaims
beneficial ownership of the securities identified herein. The securities
identified are held by the following subsidiaries in the following amounts:
Continental Casualty Company (9,754,692 shares), National Fire Insurance Company
of Hartford (8,670,828 shares), American Casualty Company of Reading
Pennsylvania (7,857,938 shares), Continental Insurance Company (270,963 shares),
and Firemen's Insurance Company of Newark, New Jersey (541,926 shares). The
characterization of shared dispositive power with the parent company is made
solely as a consequence of SEC interpretations regarding control of the
subsidiaries.
<PAGE>
This Amendment No. 1 (the "Amendment") amends the statement on Schedule 13D
filed by Continental Casualty Company ("Continental"), CNA Financial Corporation
("CNAF") and Loews Corporation ("Loews") with the U.S. Securities and Exchange
Commission on March 24, 2000.
Item 4. Purpose of Transaction.
On May 26, 2000, Continental, CNAF and Loews (collectively, the "Reporting
Persons") informed CNA Surety Corporation (the "Company") that the Reporting
Persons do not intend to pursue a proposed tender offer to acquire the remaining
equity interests of the Company not currently owned by the Reporting Persons. A
copy of the press release is attached as Exhibit C. Continental and its
subsidiaries and the other insurance subsidiaries of CNAF that own shares of CNA
Surety Corporation may review their respective positions of CNA Surety
Corporation shares from time to time and may acquire additional shares depending
upon market conditions or other factors existing at the time of such review
resulting in increases or decreases in their respective positions.
Item 7. Material to be Filed as Exhibits.
*Exhibit A Press Release dated March 20, 2000
*Exhibit B Joint Filing Agreement
**Exhibit C Press Release dated May 26, 2000
* Previously filed
** Filed herewith
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SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
May 31, 2000
CONTINENTAL CASUALTY COMPANY
By: /s/Jonathan D. Kantor
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Name: Jonathan D. Kantor
Title: Senior Vice President, General Counsel and
Secretary
CNA FINANCIAL CORPORATION
By: /s/Jonathan D. Kantor
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Name: Jonathan D. Kantor
Title: Senior Vice President, General Counsel and
Secretary
LOEWS CORPORATION
By: /s/Barry Hirsch
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Name: Barry Hirsch
Title: Senior Vice President and Secretary
<PAGE>
EXHIBIT INDEX
*Exhibit A Press Release dated March 20, 2000
*Exhibit B Joint Filing Agreement
**Exhibit C Press Release dated May 26, 2000
* Previously filed
** Filed herewith
<PAGE>
Exhibit C
CNA Plaza Media:
Chicago, IL 60685 Clark Walter
312-822-1454
Analysts:
Donald P. Lofe, Jr.
312-822-3993
CNA
For All the Commitments You Make
NEWS
CNA Withdraws Proposed Cash Tender Offer
For All Shares of CNA Surety
CHICAGO, IL., May 26, 2000 - CNA Financial Corporation (NYSE: CNA) announced
today that Continental Casualty Company (CCC), a wholly owned subsidiary, has
withdrawn its proposal to acquire by tender offer the shares of CNA Surety
Corporation (NYSE: SUR) not already owned by CCC and its affiliates.
CNA described its March 20 proposal as a move consistent with the company's
intention to sharpen its strategic focus on serving businesses. The $13 per
share price then represented a 17.4% premium over CNA Surety's average closing
price for the past 30 trading days of $11.07 per share.
Based on sharply rising stock prices across the property-casualty insurance
sector, CNA has determined that market conditions are no longer favorable for
pursuing its previously announced intention of making a cash tender offer for
shares of CNA Surety common stock. Although CNA was prepared to increase its
offer, it could not reach an agreement that was both acceptable to CNA Surety
and consistent with CNA's rate of return goals. CNA today informed CNA Surety of
its decision not to pursue the proposed tender offer. CCC and its affiliates
currently own approximately 62 percent of the outstanding shares of CNA Surety
common stock.
CNA Financial Corporation is a holding company whose primary subsidiaries are
property-casualty and life insurance companies. Collectively, these subsidiaries
are CNA, one of the largest insurance organizations in the United States.
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