<PAGE> 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]
<PAGE> 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
<PAGE> 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
<PAGE> 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) *
<PAGE> 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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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
<PAGE> 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.
<PAGE> 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
<PAGE> 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.
<PAGE> 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
<PAGE> 1
Exhibit b-2
PRESENTATION TO THE:
SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS
AMERICAN FINANCIAL CORPORATION
[LIBRA INVESTMENTS, INC. LOGO]
OCTOBER 2, 1997
<PAGE> 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
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[LIBRA INVESTMENTS, INC. LOGO] PAGE 2
<PAGE> 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
<PAGE> 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.
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[LIBRA INVESTMENTS, INC. LOGO] PAGE 4
<PAGE> 5
AMERICAN FINANCIAL CORPORATION
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TRANSACTION SPECIFICS
<TABLE>
<CAPTION>
EXISTING OFFER(a) CASH NEW PREFERRED
<S> <C> <C> <C> <C>
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%
</TABLE>
(a) Assumes offer of Series J Preferred is fully subscribed by both
the Series F and G holders.
- --------------------------------------------------------------------------------
[LIBRA INVESTMENTS, INC. LOGO] PAGE 5
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 11
AMERICAN FINANCIAL CORPORATION
- -------------------------------------------------------------------------------
AFG CORPORATE ORGANIZATIONAL CHART AS OF OCTOBER 2, 1997
<TABLE>
<S> <C> <C>
----------------------------------
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.
</TABLE>
- --------------------------------------------------------------------------------
[LIBRA INVESTMENTS, INC. LOGO] PAGE 11
<PAGE> 12
AMERICAN FINANCIAL CORPORATION
- -------------------------------------------------------------------------------
AMERICAN FINANCIAL GROUP CORPORATE ORGANIZATIONAL CHART
PRO FORMA FOR THE TRANSACTION
<TABLE>
<S> <C> <C>
----------------------------------
| 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. | -------------------------------------
---------------------
</TABLE>
- --------------------------------------------------------------------------------
[LIBRA INVESTMENTS, INC. LOGO] PAGE 12
<PAGE> 13
AMERICAN FINANCIAL CORPORATION
- -------------------------------------------------------------------------------
AFG PRO FORMA CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION> ----------------------------------------
Pro forma Adjustments
---------------------------------------- Pro Forma
Historical A FEI Merger AFC -------------------------
6/30/97 All Stock 50% Cash Merger All Stock 50% Cash
--------- --------- -------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
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
========= ======== ======= ======== ========= =========
</TABLE>
- --------------------------------------------------------------------------------
[LIBRA INVESTMENTS, INC. LOGO] PAGE 13
<PAGE> 14
AMERICAN FINANCIAL CORPORATION
- -------------------------------------------------------------------------------
AFG PRO FORMA CONSOLIDATED INCOME STATEMENT
<TABLE>
<CAPTION>
-----------------------------------------
Pro forma Adjustments
----------------------------------------- Pro Forma
Historical A FEI Merger AFC ------------------------
12/31/96 All Stock 50% Cash Merger All Stock 50% Cash
--------- -------- -------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
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
</TABLE>
- --------------------------------------------------------------------------------
[LIBRA INVESTMENTS, INC. LOGO] PAGE 14
<PAGE> 15
AMERICAN FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
AFG PRO FORMA CONSOLIDATED INCOME STATEMENT - 6 MONTHS ENDED 6/309/97
<TABLE>
<CAPTION>
-----------------------------------
Pro Forma Adjustments
-----------------------------------
Pro Forma
HISTORICAL AFEI Merger AFC ----------------------
6/30/97 All Stock 50% Cash Merger All Stock 50% Cash
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
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
</TABLE>
- --------------------------------------------------------------------------------
[LIBRA INVESTMENTS, INC. LOGO] PAGE 15
<PAGE> 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:
<TABLE>
<S> <C>
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
------
</TABLE>
(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
<PAGE> 17
AMERICAN FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
AFC PRO FORMA CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
HISTORICAL ------------
ASSETS 6/30/97 ADJUSTMENTS PRO FORMA
-------------- ------------ --------------
<S> <C> <C> <C>
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
================ ============ ==============
</TABLE>
- --------------------------------------------------------------------------------
[LIBRA INVESTMENTS, INC. LOGO] PAGE 17
<PAGE> 18
AMERICAN FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
AFC PRO FORMA CONSOLIDATED INCOME STATEMENT
<TABLE>
<CAPTION>
HISTORICAL ----------------
REVENUE 12/31/96 ADJUSTMENTS PRO FORMA
----------- ----------- ----------
<S> <C> <C> <C>
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
======== ====== ==========
</TABLE>
- --------------------------------------------------------------------------------
[LIBRA INVESTMENTS, INC. LOGO] PAGE 18
<PAGE> 19
AMERICAN FINANCIAL CORPORATION
- -------------------------------------------------------------------------------
AFC PRO FORMA CONSOLIDATED INCOME STATEMENT - 6 MONTHS ENDED 6/30/97
<TABLE>
<CAPTION>
Historical
6/30/97 Adjustments Pro Forma
------- -------- -------
<S> <C> <C> <C>
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
====== ======== =======
</TABLE>
- --------------------------------------------------------------------------------
[LIBRA INVESTMENTS, INC. LOGO] PAGE 19
<PAGE> 20
AMERICAN FINANCIAL CORPORATION
- -------------------------------------------------------------------------------
AFC PRO FORMA NOTES TO FINANCIAL STATEMENTS
<TABLE>
<S> <C> <C>
(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.
</TABLE>
- --------------------------------------------------------------------------------
[LIBRA INVESTMENTS, INC. LOGO] PAGE 20
<PAGE> 21
AMERICAN FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
5 YEAR TRADING PRICES FOR SERIES F PREFERRED (INCLUDES ACCRUED DIVIDENDS)
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>
- --------------------------------------------------------------------------------
[LIBRA INVESTMENTS, INC. LOGO] PAGE 21
<PAGE> 22
AMERICAN FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
RECENT TRADING PRICES OF THE SERIES F PREFERRED
AMERICAN FINANCIAL CORPORATION
1997 WEEKLY STRIP PRICES
$1.80 SERIES F
<TABLE>
<CAPTION>
DATE
----
<S> <C> <C>
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
</TABLE>
- --------------------------------------------------------------------------------
[LIBRA INVESTMENTS, INC. LOGO] PAGE 22
<PAGE> 23
AMERICAN FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
RECENT TRADING PRICES OF THE SERIES G PREFERRED
AMERICAN FINANCIAL CORPORATION
41.05 SERIES G
<TABLE>
<CAPTION>
DATE
<S> <C>
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
</TABLE>
- --------------------------------------------------------------------------------
[LIBRA INVESTMENTS, INC. LOGO] PAGE 23
<PAGE> 24
<TABLE>
<CAPTION>
American Financial Corporation
- ---------------------------------------------------------------------------------------------------------------
Valuation Date :10/02/97
Actual/Implied
Offer Date Issuer Ticker Description Rating
- ---------------------------------------------------------------------------------------------------------------
Moody's S&P
--------------------
<S> <C> <C> <C> <C> <C>
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-
<CAPTION>
American Financial Corporation (continued)
- ---------------------------------------------------------------------------------------------------------------------------
Valuation Date :10/02/97 Date Call
Amount Protection Maturity Offer
Offer Date Issuer O/S Expires (a) (b) Price
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
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
<CAPTION>
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
<S> <C> <C> <C> <C> <C> <C>
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
<CAPTION>
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)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>
TREASURY YIELDS AS OF 10/02/97
TREASURY YIELD CURVE
<TABLE>
FUNDS YIELD
----- -----
<S> <C> <C>
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%
</TABLE>
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
<PAGE> 25
AMERICAN FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Tender Offer Analysis
Ratings
Announce Date -------------- Date of Spread to
Company/Target of Tender Description S&P Moody's 1st Call Maturiy Treasury
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>
Spread Summary
- ----------------
Average 82.33
Median 70.00
High 175.00
Low 25.00
- --------------------------------------------------------------------------------
[LIBRA INVESTMENTS, INC. LOGO] PAGE 25
<PAGE> 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)
<TABLE>
<CAPTION>
Discount Rate NPV over 30 yrs
------------- ---------------
<S> <C>
7.50% $ 23.54
8.00% $ 22.25
8.50% $ 21.07
</TABLE>
- --------------------------------------------------------------------------------
[LIBRA INVESTMENTS, INC. LOGO] PAGE 26
<PAGE> 27
AMERICAN FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
RANGE OF VALUE: SERIES F PREFERRED
<TABLE>
<CAPTION>
VALUATION METHODOLOGY: LOW HIGH COMMENTS
- --------------------------------------- ----------- -------- -----------------------------------------------------
<S> <C> <C> <C>
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
</TABLE>
- --------------------------------------------------------------------------------
[LIBRA INVESTMENTS, INC. LOGO] PAGE 27
<PAGE> 28
AMERICAN FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
AFG SUMMARY OF RECENT TRANSACTIONS
<TABLE>
<CAPTION>
DATE ENTITY TRANSACTION
- --------- -------------------------------------------- -------------------------------------------------------------
<S> <C> <C>
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
</TABLE>
- --------------------------------------------------------------------------------
[LIBRA INVESTMENTS, INC. LOGO] PAGE 28
<PAGE> 29
AMERICAN FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
DAILY YIELD FOR THE 30 YEAR TREASURY: YEAR TO DATE
<TABLE>
<S> <C>
24
14 Feb
7 Mar
28
10 Apr
9 May
30
20 Jun
11 Jul
1 Aug
22
12 Sep
</TABLE>
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
<PAGE> 30
AMERICAN FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
WEEKLY YIELD FOR THE 30 YEAR TREASURY FOR THE PAST THREE YEARS
<TABLE>
<S> <C>
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
</TABLE>
