==============================================================================
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):June 24, 1996
MORGAN STANLEY GROUP INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C> <C>
Delaware 1-9085 13-2838811
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification Number)
</TABLE>
1585 Broadway, New York, New York 10036
(Address of principal executive offices including zip code)
Registrant's telephone number, including area code: (212) 761-4000
==============================================================================
Item 5. Other Events
Attached and incorporated herein by reference as Exhibit 99 is a press release
of Morgan Stanley Group Inc. (the "Company") announcing the signing of a
definitive agreement to purchase VK/AC Holding Inc. ("VKAC"), the parent of
Van Kampen American Capital, Inc.
Item 7(c). Exhibits
99.Press release of the Company dated June 24, 1996 announcing the signing of
a definitive agreement to purchase VKAC, the parent of Van Kampen American
Capital, Inc.
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.
MORGAN STANLEY GROUP INC.
Registrant
/s/ Jonathan M. Clark
-----------------
Jonathan M. Clark
General Counsel and Secretary
Date: June 24, 1996
Index to Exhibits
Exhibit No.Description
99.Press release dated June 24, 1996 announcing the signing of a definitive
agreement to purchase VK/AC Holding Inc., the parent of Van Kampen American
Capital, Inc.
EXHIBIT 99
[LOGO]
NEWS
Contact: Jeanmarie McFadden, Morgan Stanley
(212) 761-4058
or
Gary DeMoss, Van Kampen American Capital
(708) 684-6265
For Immediate Release
MORGAN STANLEY TO ACQUIRE VAN KAMPEN AMERICAN CAPITAL
Assets Under Management Will Grow to Nearly $160 Billion
NEW YORK/CHICAGO, June 24--Morgan Stanley Group Inc. (NYSE:
MS) announced today that it has signed a definitive agreement to purchase
VK/AC Holding, Inc., the parent of Van Kampen American Capital, Inc., for
$745 million. Van Kampen is the country's fourth largest non-proprietary
mutual fund provider with more than $57 billion in assets under management
or supervision.
The consideration for the purchase of the equity of VK/AC Holding will
consist of cash and $25 million of exchangeable preferred securities. As of
May 31, 1996, VK/AC Holding, Inc. had long term debt outstanding of
approximately $430 million. To the extent that operating cash flow between
signing and closing permits paydown of such long term debt, the purchase
price of the equity will be increased, but in no circumstances will the sum of
the equity purchase price and the remaining long term debt exceed $1.175
billion.
The acquisition will increase total assets under management at Morgan
Stanley's asset management division to nearly $160 billion.
"Van Kampen American Capital is an experienced money manager with
proven management, strong U.S. retail distribution and excellent customer
servicing skills," said Richard B. Fisher, chairman, and John J. Mack,
president, of Morgan Stanley. "While we remain committed to building on our
premier institutional franchise, this acquisition is consistent with our
stated goal of accumulating assets and gives Morgan Stanley a strong U.S.
distribution capability through which we can offer to individual investors
some products traditionally sold primarily to major institutions."
"We look forward to becoming part of Morgan Stanley's organization,"
said Don G. Powell, chief executive officer and president of Van Kampen
American Capital. "This acquisition is positive for our associates, the
investment representatives who sell our funds and the shareholders of our
products who will benefit from Morgan Stanley's strong reputation, global
presence and commitment to superior investment performance."
Said Barton M. Biggs, chairman of Morgan Stanley Asset Management,
"In the United States and around the world, individual investors control a
growing percentage of the world's capital. Van Kampen American Capital is
an important strategic acquisition that will enhance Morgan Stanley's
ability to benefit from this long term trend."
Added James M. Allwin, president of Morgan Stanley Asset Management:
"We intend to grow Van Kampen American Capital by building on its excellent
infrastructure and by broadening the range of products available to
individual investors, particularly in the international and emerging
markets arena. The diversity of the Van Kampen American Capital product
mix and distribution systems is a major strength, allowing the company to
gather assets over the full range of market environments and investor
preferences."
Van Kampen American Capital is a leading U.S. manager of mutual funds
and institutional assets and sponsor of unit investment trusts. It was
created by the 1994 merger of The Van Kampen Merritt Companies, Inc. and
American Capital Management & Research, Inc. Approximately 51 percent of
its open end fund assets are in equities and 49% are in fixed income. The
company's products are sold through major national brokerage firms,
regional broker dealers, banks, financial planners and insurance agents.
Funds include: the Emerging Growth Fund, the Enterprise Fund, the Growth &
Income Fund, the Equity-Income Fund, and the Prime Rate Trust. Van Kampen
American Capital is also the third largest sponsor of unit investment
trusts with annual sales of approximately $1.3 billion and total UIT assets
of approximately $12 billion.
Van Kampen American Capital is widely recognized in the industry for the
quality of its service to investors. It is one of only two firms to have
won the DALBAR "Quality Tested Service Award" for six consecutive years.
The company employs 1,200 persons in three principal locations: Chicago,
Houston and Kansas City. For the quarter ended March 31, 1996, the company
had revenue of $82.2 million and operating profit before tax of $34.8
million, excluding goodwill amortization and interest expenses.
Van Kampen American Capital's major shareholder is a fund managed by
Clayton, Dubilier & Rice, Inc. The acquisition is expected to close by
November 30, the end of Morgan Stanley's fiscal year and is subject to
customary closing conditions. Prior to closing VK/AC Holding intends to
distribute to it's shareholders the capital stock it owns in McCarthy,
Crisanti & Maffei, Inc.
Morgan Stanley's asset management division provides clients with a broad
range of investment management and fiduciary advisory services to
institutions, high-net worth, and other individuals worldwide; and identifies,
structures and manages private equity investments for institutional investors
and the Morgan Stanley Group.
Including Van Kampen American Capital and Miller Anderson & Sherrerd
LLP, the Philadelphia-based investment manager acquired by Morgan Stanley
in January 1996, Morgan Stanley's asset management division will manage
assets totaling nearly $160 billion.
Since its formation in 1935, Morgan Stanley has been a leader in the
investment banking field. Through a network of 27 principal offices in 19
countries, Morgan Stanley offers a complete range of sophisticated financial
services to sovereign governments, corporations, institutions and individuals
throughout the world.
(See Attachment)
# # #
June 24, 1996
(0211)
VAN KAMPEN AMERICAN CAPITAL (VKAC)
SUMMARY
o Formed in 1994 through the merger of Van Kampen Merritt (Chicago- based)
and American Capital Management & Research (Houston-based).
o Joint headquarters are located in Houston and Chicago.
o The company has approximately 1,200 associates.
o Leadership: Don G. Powell, President, CEO & Director.
o VKAC is the fourth largest non-proprietary mutual fund provider in the
United States with more than $57 billion in assets under management and
supervision.
o Product line: 65 open-end funds, 37 closed-end funds and 2,600 series of
tax-exempt and equity unit investment trusts.
o Asset mix of open-end mutual funds: 51% equity and 49% fixed income.
Asset mix of closed-end funds are 91% tax free bonds and 9% taxable bonds.
Largest single fund and fastest growing is Prime Rate Trust, a variable
senior loan fund.
o Assets under management/supervision (in billions as of 3/31/96)
Open-end Assets $27.63 48.2%
Closed-End Assets 11.94 20.8%
Unit Trusts 11.86 20.7%
Institutional 5.85 10.2%
------ ------
Total Assets $57.28 100.0%
o Distribution: 28% of its business sold through regional broker/dealers;
25% through financial planners; 24% through banks and 23% through
wirehouses.
o Investors: The company's investment products have over 2 million
investors in mutual funds and UITs.
