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 EARLIEST EVENT REPORTED:
SEPTEMBER 19, 1999
JEFFERSON-PILOT CORPORATION
(Exact Name of registrant as specified in its charter)
North Carolina 1-5955 56-0896180
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) Number)
100 North Greene Street
Greensboro, North Carolina 27401
(Address of principal executive offices)
(336) 691-3000
(Registrant's telephone number, including area code)
<PAGE>
INFORMATION TO BE INCLUDED IN REPORT
Item 5. Other Events.
On September 19, 1999, Jefferson-Pilot Corporation, The Guarantee
Life Companies, Inc. ("Guarantee Life") and LG Merger Corp. entered into
an Agreement and Plan of Merger dated as of September 19, 1999. It
provides for the acquisition by the registrant of Guarantee Life, through
merger with LG Merger Corp., wholly-owned subsidiary of the registrant, for
$32.00 per share of Guarantee Life in cash and common stock of the Corporation,
through a cash election process but with all cash being paid under certain
circumstances. Based on the number of share of Guarantee Life now outstanding
and including its indebtedness, currently $115 million, which could remain
in place or be refinanced, the acquisition consideration is $411 million.
The acquisition is further described in the joint Press Release and related
Guarantee Life Acquisition Fact Sheet released to the public earlier today,
which are attached hereto as an exhibit and are incorporated herein by
reference. This foregoing description is qualified in its entirety by
reference to the exhibit.
Item 7. Exhibits.
Exhibit 99. Joint Press Release issued September 20, 1999 and
related Guarantee Life Acquistion Fact Sheet.
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.
JEFFERSON-PILOT CORPORATION
By: /s/ Robert A. Reed
(name) Robert A. Reed
(title) Vice President
Dated: September 20, 1999
EXHIBIT 99
JEFFERSON-PILOT CORPORATION AND THE GUARANTEE LIFE COMPANIES INC. SIGN
ACQUISITION AGREEMENT
FOR IMMEDIATE RELEASE - SEPTEMBER 20, 1999
Contact: John T. Still III (JPC Investor Relations) 336-691-3382
Michael J. Burney (JPC Media Relations) 336-691-3313
William L. Bauhard - Diane T. Kohout (Guarantee Life
IR/Communications) 402-361-2848
Jefferson-Pilot Corporation (JP-NYSE) and The Guarantee Life Companies Inc.
(Nasdaq: GUAR) announced today that they have signed a definitive agreement
for Jefferson-Pilot Corporation to acquire The Guarantee Life Companies Inc.
The agreement provides for a purchase price of $32.00 per share of Guarantee
Life common stock. The acquisition price will be payable 50 percent in
common stock of Jefferson-Pilot and 50 percent in cash, with a provision
that the purchase price will convert to all cash if Jefferson-Pilot stock
trades shortly before closing at an average price above $75.00 per share or,
at Jefferson-Pilot's option, if the average price is below $65.00 per share.
Closing is targeted for completion by mid-December 1999.
Guarantee Life derives most of its earnings from a portfolio of individual
life insurance and annuity products marketed to middle-income individuals
and small business owners. Premiums and reserves of $125 million and $1.2
billion, respectively, represent an increase of approximately 9 percent in
Jefferson-Pilot's Individual operations on a proforma basis. Guarantee Life
also provides employee benefit products, primarily group life insurance and
group disability insurance, marketed to small and medium-sized employee
groups. Group life and disability premiums of $148 million represent an
increase of approximately 150 percent in Jefferson-Pilot's book of business.
Jefferson-Pilot's group life and disability insurance operations will be
strengthened further by Guarantee Life's systems, underwriting, and claims
management capabilities. The acquisition also will provide an enhanced
platform for worksite marketing of life insurance products.
The transaction is expected to be accretive to Jefferson-Pilot's earnings
per share.
Closing of the transaction is subject to several conditions, including the
approval of the shareholders of Guarantee Life, receipt of all appropriate
regulatory approvals, and the effectiveness of a registration statement to
be filed with the Securities Exchange Commission covering the Jefferson-Pilot
shares to be issued in the transaction. Shareholders of Guarantee Life will
be provided a proxy statement describing the terms of the transaction prior
to being asked to vote on the transaction at a special meeting of the
shareholders, which is expected to take place in December 1999.
Jefferson-Pilot Corporation Chairman and Chief Executive Officer David A.
Stonecipher described the agreement to acquire Guarantee Life Companies:
"The combination of Guarantee Life's businesses with Jefferson-Pilot's
represents an attractive opportunity for us, both financially and
strategically. Our individual life insurance businesses fit together
extremely well, and we believe that the merger of the two companies' group
insurance operations will enable us to take Jefferson-Pilot's group life
and disability businesses to a higher level of growth and profitability.
We are also pleased that Robert D. Bates, CEO of Guarantee Life, has
elected to continue to lead all Group Insurance operations for
Jefferson-Pilot from Omaha."
Robert D. Bates, Chairman and Chief Executive Officer of Guarantee Life,
commented, "We are optimistic about the opportunity to affiliate with a
company having the financial strength and quality reputation of
Jefferson-Pilot. Also, we are pleased with the shareholder value that has
been created since our demutualization in 1995. We look forward to becoming
a part of the Jefferson-Pilot team."
######
Jefferson-Pilot Corporation is a holding company whose stock is traded on
the New York Stock Exchange. Its life insurance and annuity companies,
principally Jefferson-Pilot Life, Jefferson Pilot Financial Insurance
Company and Alexander Hamilton Life, together offer full lines of individual
and group life insurance and annuity products. Their products are marketed
through a national network of both career and independent agents. An
additional subsidiary, Jefferson-Pilot Communications Company, owns and
operates three network television stations, 17 radio stations, and produces
and syndicates sports programming. http://www.jpfinancial.com
Jefferson-Pilot Corporation
Guarantee Life Acquisition Fact Sheet
I. Transaction
- - $32.00 per Guarantee Life common share, payable 50 percent in common stock
of Jefferson-Pilot and 50 percent in cash. The purchase price will convert
to all cash if Jefferson-Pilot stock is trading at an average price shortly
before closing above $75.00 or, at Jefferson-Pilot's option, if the average
price is below $65.00.
- - Jefferson-Pilot plans to effect, over time, open-market purchases of its
common stock to the extent shares are delivered to Guarantee Life
shareholders.
- - Aggregate consideration is $411 million. That amount includes the
purchase of 9.25 million shares of Guarantee Life stock at $32.00 per share,
and the assumption of debt, currently $115 million.
- - Pricing multiples:
- 1.4x Guarantee Life's GAAP book value as of June 30, 1999.
- Adjusted P/E of approximately 9-10x Guarantee Life's current
operating earnings plus expected expense synergies.
- Represents a financial purchase strategy to augment profits in
Jefferson-Pilot's core individual life insurance business, and a
strategic enhancement of Jefferson-Pilot's group life and disability
insurance operations.
II. Financing
- Cash needed to effect the transaction and stock repurchases will
be derived from approximately equal amounts of borrowings and
proceeds of securities sales.
- Expected after-tax cost of financing is less than 5%, including
projected debt expense and loss of income on securities sold.
III. Strategic Business Rationale
- - Deploys over $400 million of excess capital at substantially improved
returns.
- - Integration of the companies' individual life insurance businesses provides
opportunities to employ Jefferson-Pilot's proven expense management
capability to achieve significant economies of operation.
- - Guarantee Life's group operations provide opportunities to strengthen
Jefferson-Pilot's group life insurance and group disability insurance
businesses through Guarantee Life's national sales force and strong systems
capabilities. Additionally, the acquisition provides Jefferson-Pilot with
an effective platform for worksite marketing of life insurance products.
IV. Financial Impact
- - Jefferson-Pilot expects annual accretion to reach a minimum range of
$0.15-$0.20 per share as synergies are achieved over the next three years.
- - Annual corporate-wide expense savings expected to reach $30 million pretax
when fully developed over the next three years.
- - Jefferson-Pilot's financial flexibility will remain substantial:
- - Leverage and RBC ratios will remain consistent with Jefferson-Pilot's
current top level ratings.
- - Company will retain significant future acquisition financing capability.
The private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for forward looking statements. Certain information contained herein or in
any other written or oral statements made by or on behalf of JP are or may
be viewed as forward looking. Although the Company has used appropriate
care in developing any such forward looking information, forward looking
information involves risks and uncertainties that could significantly impact
actual results. These risks and uncertainties include, but are not limited
to, the matters discussed in "Year 2000 Issue", "Market Risk Exposures",
"External Trends and Forward Looking Information" and other risks detailed
from time to time in the Company's SEC filings; to the risks that JP might
fail to successfully complete strategies for cost reductions and for growth
in sales of products through all distribution channels, in general or related
to acquisitions; to business interruption risks if the Company or a critical
business partner does not timely complete its Year 2000 compliance project;
and more generally to: general economic conditions; competitive factors,
including pricing pressures, technological developments, new product
offerings and the emergence of new competitors; interest rate trends and
fluctuations and changes in stock markets; and changes in federal and state
laws and regulations, including, without limitation, changes in financial
services industry or tax laws and regulations. The Company undertakes no
obligation to publicly update or revise any forward looking statements,
whether as a result of new information, future developments or otherwise.
