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Exhibit 99(B)
PRESS
RELEASE
CONTACT: Mike Paquette
(603) 640-2205
WHITE MOUNTAINS TO ACQUIRE CGU
HANOVER, New Hampshire, September 25, 2000 -- White Mountains announced today
that it has entered into a definitive agreement with London-based CGNU Group to
purchase its U.S. property and casualty operations, CGU. The purchase price is
$2.1 billion plus the repayment of approximately $.5 billion of CGU's debt to
its parent at closing. The final price is subject to some adjustments which are
expected to be minor in the aggregate.
White Mountains has received a $1.0 billion debt financing commitment from
Lehman Brothers Inc. In addition, Warren Buffett has committed to invest up to
$300 million in a convertible preferred stock of White Mountains. A small group
of private investors and management have also committed to invest $300 million
directly in a newly formed acquisition company in return for approximately 18%
of its common stock. Additionally, the seller will retain a note in the amount
of $210 million, payable six months from the closing date in cash or stock at
White Mountains' option. In connection with financing the transaction, White
Mountains will contribute most of its existing operating businesses to the
acquisition company.
Robert C. Gowdy, CGU's President and CEO, said, "This new ownership is just what
we hoped for - a 100% commitment to both the independent agent distribution
channel and to the U.S. property/casualty marketplace. We are confident and
excited about this opportunity and look forward to working with Jack and White
Mountains. I am grateful to our staff, agents and customers who have shown
unwavering support during the search for new shareholders."
White Mountains' Chairman Jack Byrne added, "I have spent my career working with
independent agents. We are delighted to acquire this 150-year-old blue chip
property and casualty stalwart devoted to
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the independent agent. We will be quietly polishing the luster of this proud
company."
The sale is expected to be completed before year-end subject to, among other
matters, the receipt of Federal and state regulatory approvals, the completion
of financing and the satisfaction of other customary conditions.
Lehman Brothers Inc. served as White Mountains' financial advisor in the
transaction.
White Mountains also announced today that, as a result of the CGU transaction,
it has terminated its open tender offer to purchase up to 1,500,000 of its
common shares at a price of $165.00 per share. The tender offer commenced on
Monday, August 21, 2000 and was scheduled to expire at midnight tomorrow. White
Mountains had retained the right to terminate the offer if, after August 18,
2000, any actual or potential change or development occurred with respect to the
business of White Mountains that, in its reasonable judgement, was material to
White Mountains.
White Mountains is a Bermuda-domiciled financial services holding company traded
on the New York Stock Exchange under the symbol WTM. Additional financial
information and other items of interest are available at the Company's web site
located at WWW.WHITEMOUNTAINS.COM. CGU, headquartered in Boston, is currently
the 16th largest property & casualty insurer in the U.S. and is represented by
6,200 independent agents and brokers. CGU operates in all 50 states through a
network of 43 branch offices.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995
This press release contains forward looking statements within the meaning of the
"safe harbor" provisions of the United States Private Securities Litigation
Reform Act of 1995. White Mountains cautions that a number of important factors
could cause actual results to differ materially from the plans, objectives,
expectations, estimates and intentions expressed in forward-looking statements
made by White Mountains. These factors include: (i) competitive forces,
including the conduct of other property and casualty insurers and reinsurers,
(ii) changes in domestic or foreign laws or regulations applicable to White
Mountains, its competitors or its clients, (iii) an economic
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downturn or other economic conditions (such as a rising interest rate
environment) adversely affecting White Mountains' financial position, (iv)
loss reserves established by White Mountains subsequently proving to have
been inadequate, and (v) the failure of potential developments that may
enhance White Mountains' business to materialize, or, if such developments
materialize, the failure of such developments to enhance White Mountains'
business. White Mountains cautions that the foregoing list of important
factors is not exhaustive. In any event, such forward-looking statements made
by White Mountains speak only as of the date on which they are made, and
White Mountains does not undertake any obligation to update or revise such
statements as a result of new information, future events or otherwise.
