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 (Date of earliest event reported): August 2, 1994
AMERICAN GENERAL CORPORATION
(Exact name of registrant as specified in its charter)
Texas 1-7981 74-0483432
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation) Number)
2929 Allen Parkway, Houston, Texas 77019
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 522-1111
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Item 5. Other Events.
American General Corporation (the "company") issued a News Release
dated August 2, 1994, announcing that the company has made a merger
offer to acquire Unitrin, Inc. ("Unitrin") in an all-cash merger
transaction based upon a proposed price of $50-3/8 for each of Unitrin's
51.8 million outstanding shares.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit Number
99 News Release dated August 2, 1994, announcing that the
company has made a merger offer to acquire Unitrin, Inc.
("Unitrin") in an all-cash merger transaction based upon a
proposed price of $50-3/8 for each of Unitrin's 51.8 million
outstanding shares.
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 thereunto duly authorized.
AMERICAN GENERAL CORPORATION
Dated: August 3, 1994 By: /s/ JON P. NEWTON
Jon P. Newton
Senior Vice President and
General Counsel
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EXHIBIT INDEX
Exhibit
Number Description
99 News Release dated August 2, 1994, announcing that the company has
made a merger offer to acquire Unitrin, Inc. ("Unitrin") in an
all-cash merger transaction based upon a proposed price of $50-3/8
for each of Unitrin's 51.8 million outstanding shares.
-2-
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AMERICAN GENERAL ANNOUNCES MERGER OFFER FOR UNITRIN
Houston, August 2, 1994 -- American General Corporation (NYSE:AGC) today
announced its merger offer to acquire Unitrin, Inc. (NASDAQ:UNIT) in an
all-cash merger transaction valued at $2.6 billion. American General said
that this offer will be open through September 16, 1994. Unitrin, a
Chicago-based holding company, with assets of $4.8 billion and shareholders'
equity of $2.0 billion, provides basic financial services including insurance
and consumer loans, to individuals and small businesses throughout the United
States.
On July 12, 1994, American General proposed a price of $50-3/8 in cash
for each of Unitrin's 51.8 million outstanding shares. Unitrin's board of
directors rejected the American General offer in a letter dated July 26, 1994.
American General said it believes its offer is full and fair. The offer
represents a premium of 30 percent over the $38-3/4 closing price of Unitrin
common stock on July 11, 1994, and is higher than the highest price at which
Unitrin shares have ever traded. Unitrin stock closed at $39-3/4 on August 2,
1994. American General estimates that Unitrin is overcapitalized by
approximately $1.4 billion. Excluding this $1.4 billion in capital, American
General's offer represents a premium of more than 100 percent over the current
market value of Unitrin's operating businesses.
Since the offer is based on publicly available information, the company
indicated it would be willing to consider a higher price if Unitrin were to
demonstrate additional value in the course of due diligence and negotiation.
American General also said it would be willing to consider alternative
transaction structures, including the opportunity for Unitrin shareholders to
receive American General equity securities in a tax-free exchange.
American General believes this transaction would be accretive to its
earnings per share in the second year.
Merrill Lynch, the company's financial advisor, has indicated that
American General will have no difficulty financing the transaction. Fox-Pitt,
Kelton has also advised American General on this transaction.
American General's offer is subject to the execution of a mutually
satisfactory merger agreement containing customary terms and conditions and
receipt of required regulatory approvals. American General believes there are
no legal or regulatory barriers to the transaction.
In commenting on this offer, Harold S. Hook, chairman and chief
executive officer of American General Corporation, said, "We are making public
our offer to merge with Unitrin for a very simple reason: We believe that all
Unitrin shareholders should have this opportunity to realize immediately the
long-term potential of their investment. This merger offers significant value
to both companies' shareholders, policyholders, and customers. American
General and Unitrin share a common commitment to meeting the basic financial
needs of customers. Together, we would serve over 8 million households,
strengthening the reach and depth of our life insurance and consumer finance
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distribution systems. On a combined basis, the companies would have assets of
$50 billion and revenues of $6 billion.
"American General has two core objectives: to consistently produce and
build shareholder value; and to increase cash dividends per share. Since
1989, operating earnings have grown 17 percent annually, dividends have
increased at a 10 percent annual rate, and total return to shareholders has
averaged 22 percent per year. Dividends have been paid continuously for over
65 years and have been increased in each of the last 19 years. Additionally,
since the inception of our current share buyback program in 1987, we have
enhanced shareholder value by purchasing 93 million shares of our own stock
for a total of $1.8 billion," Mr. Hook continued.
"We look forward to the opportunity to discuss our offer with Unitrin's
management and its board of directors in the near future. We believe this
transaction can be completed promptly and that we can combine our two
organizations smoothly," Mr. Hook concluded.
American General Corporation, with assets of $45 billion and
shareholders' equity of $4.3 billion, is one of the nation's largest consumer
financial services organizations. Headquartered in Houston, it is one of the
nation's leading providers of retirement annuities, consumer loans, and life
insurance. American General Corporation (AGC) common stock is listed on the
New York, Pacific, London, and Swiss stock exchanges.
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