SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of report: July 11, 1997 Commission File No. 1-7361
(Date of earliest event reported)
AMERICAN FINANCIAL CORPORATION
Incorporated under IRS Employer
the laws of Ohio Identification No. 31-0624874
One East Fourth Street
Cincinnati, Ohio 45202
Phone: (513) 579-2121
Former name or former address, if changed since last report - not appl
icable.
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AMERICAN FINANCIAL CORPORATION
FORM 8-K
Item 5. Other Events.
On July 11, 1997, American Financial Corporation ("AFC")
entered into an agreement with American Financial Group, Inc.
pursuant to which AFC's Series F and Series G Preferred Stock
will be exchanged, at the option of each holder, for $22.35 and
$10.50 cash, respectively, or a new issue of AFC voting preferred
stock. Please see the News Release attached hereto as
Exhibit 1.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(a) Not Applicable
(b) Not Applicable
(c) Exhibit (99) Additional Exhibits.
(1) American Financial Corporation News Release
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
AMERICAN FINANCIAL CORPORATION
July 14, 1997 By: James C. Kennedy
James C. Kennedy
Deputy General Counsel & Secretary
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Exhibit 1
AMERICAN FINANCIAL CORPORATION
NEWS RELEASE
Date: July 11, 1997 Contact: Anne N. Watson
For Release: Immediately Phone: (513) 579-6652
AMERICAN FINANCIAL CORPORATION
ANNOUNCES SIGNING OF MERGER AGREEMENTS
(Cincinnati, Ohio) American Financial Corporation ("AFC")
announced today that it has entered into an agreement with
American Financial Group, Inc. ("AFG") pursuant to which AFC's
Series F and Series G Preferred Stock will be exchanged, at the
option of each holder, for $22.35 and $10.50 cash, respectively,
or a new issue of AFC voting preferred stock.
AFG owns 100% of the common stock and 76% of the voting
equity securities of AFC. AFC has two series of publicly-held
voting preferred stock, Series F and Series G, both listed on the
Pacific Exchange, which together represent approximately 24% of
AFC's voting securities.
Under the merger agreement, AFC will merge with a wholly-
owned subsidiary pursuant to which each share of Series F
Preferred Stock will be converted into the right to receive
$22.35 per share and each share of Series G Preferred Stock will
be converted into the right to receive $10.50 per share. The
aggregate merger consideration to be received by a holder would
be payable, at the holder's election, either in cash, in shares
of a new AFC Series J Preferred Stock, or a combination of the
two. The transaction has been structured to be tax-free to AFC
Preferred Shareholders receiving solely Series J Preferred Stock
in the merger.
While the basic terms of the transaction remained the same
as those announced on April 23, 1997, subsequent negotiations
between AFG and a Special Committee of AFC's Board of Directors
did result in an increase in the amount of consideration to be
received by holders of Series F Preferred Stock.
Holders of Series J Preferred Stock will hold approximately
23% of the voting power of AFC after the AFC Merger, which has
been structured to be tax free to current AFC preferred
stockholders receiving solely shares of Series J Preferred Stock.
The Series J Preferred Stock will be redeemable, at AFC's option,
at 103% of principal amount after the eighth anniversary of its
issuance, declining to 101.5% of principal amount after the ninth
anniversary and 100% of principal amount after the tenth
anniversary of its issuance. It will have a liquidation value of
$22.35 per share and an annual dividend of $1.90 per share, paid
on a semi-annual basis. The Merger Agreement requires that
approximately $70.4 million in liquidation value of the new
Preferred Stock be issued in the transaction. If the Series J
Preferred Stock alternative is over-subscribed, holders will be
allocated shares on a pro-rata basis.
This announcement does not constitute a solicitation of
proxies or consents of AFC shareholders, which will only be made
by means of a proxy statement relating to the proposal which is
expected to be filed with the Securities and Exchange Commission
within the next week.
American Financial Group Inc., through AFC, is engaged
primarily in specialty and multi-line property and casualty
insurance businesses and in the sale of tax-deferred annuities
and certain life and health insurance products.
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