SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9
Solicitation/Recommendation Statement
Pursuant to Section 14(d)(4) of
the Securities Exchange Act of 1934
(Amendment No. 4)
Meridian Insurance Group, Inc.
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(Name of Subject Company)
Meridian Insurance Group, Inc.
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(Name of Person(s) Filing Statement)
Common Stock, No Par Value
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(Title of Class of Securities)
589644-10-3
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(CUSIP Number of Class of Securities)
Norma J. Oman
Chief Executive Officer
Meridian Insurance Group, Inc.
2955 North Meridian Street
Indianapolis, Indiana 46208-4788
(317) 931-7000
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(Name, address and telephone number of person authorized to receive
notice and communications on behalf of the person(s) filing statement)
with copies to:
Stephen J. Hackman
Ice Miller
One American Square
Box 82001
Indianapolis, Indiana 46282-0002
(317) 236-2100
<PAGE>
This Amendment No. 4 (the "Amendment") amends and supplements the
Solicitation/Recommendation Statement on Schedule 14D-9 (as amended, the
"Schedule 14D-9") filed with the Securities and Exchange Commission on September
11, 2000, by Meridian Insurance Group, Inc., an Indiana corporation (the
"Company" or "MIGI").
The original filing on Schedule 14D-9 related to a tender offer announced
on or about August 30, 2000 and filed with the Commission on August 30, 2000
under cover of a statement on Schedule TO (the "Offer") by Meridian Insurance
Group Acquisition Corporation ("Bidder"), an Illinois corporation and
wholly-owned subsidiary of American Union Insurance Company ("Parent" or
"AUIC"). Parent is an Illinois stock insurance company that is 50% owned by
Gregory M. Shepard ("Shepard"). Shepard is also Chairman of the Board and
President of AUIC. The original Offer was for the purchase of all of the
outstanding shares of Common Stock of MIGI at a purchase price of $20.00 per
Share, net to the seller in cash, without interest thereon, upon the terms and
subject to the conditions set forth in the Offer to Purchase dated August 31,
2000, and the related Letter of Transmittal. Capitalized terms not defined
herein have the meanings set forth in the Schedule 14D-9.
On September 15, 2000, the Company filed Amendment No. 1 to Schedule 14D-9
responding to certain comments made by the Staff of the Commission.
On September 18, 2000, the Bidder, American Union Financial Corporation,
Gregory M. Shepard and Tracy M. Shepard (collectively the "Bidders"), filed
Amendment No. 2 to the Schedule TO relating to the Offer. According to Amendment
No. 2, the Offer has been amended in certain material respects by a Supplement
thereto dated September 18, 2000 (such Supplement, together with the Offer, the
"Amended Offer"), including but not limited to: (i) the number of shares sought
to be purchased under the Offer has been reduced to 2,985,769 Shares; (ii) the
price per share to be paid under the Offer has been increased to $25 per Share,
net to the Seller in cash, without interest thereon; (iii) the financing
contingency to the obligations of the Bidders has been removed; (iv) the
expiration date of the Offer has been extended; and (v) the Bidders disclosed in
the Supplement that they no longer intend to cause the Company to effect a
second-step merger or similar transaction in order to acquire 100% of the
Company's shares following the conclusion of the Offer, contrary to the
statement in the Offer that they intended to cause such a second-step merger to
occur.
On September 22, 2000, the Company filed Amendment No. 2 to Schedule 14D-9,
in which the Board recommended that the Company's shareholders reject the
Amended Offer for the reasons set forth in the Amendment No. 2.
On October 6, 2000, the Bidders filed Amendment No. 3 to the Schedule TO,
disclosing that the Indiana Securities Commissioner issued an order stating that
the Offer could not continue until the Bidders clarified and supplemented
certain accounting and financial information.
<PAGE>
On October 6, 2000, the Company filed Amendment No. 3 to Schedule 14D-9,
announcing that the Board had directed management to explore strategic
alternatives to enhance shareholder value, including repurchasing outstanding
Company shares, engaging in a corporate reorganization or restructuring, taking
the Company private, demutualizing the Company's mutual insurance company
affiliates, engaging in an affiliation or business combination, or continuing
the Company's long-term independence strategy. In its press release, the Board
also announced that it expected to enter into negotiations with third parties
regarding one or more of the alternatives described above.
On October 19, 2000, the Bidders filed Amendment No. 4 to the Schedule TO,
announcing the extension of the Offer until November 17, 2000.
ITEM 7. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS
Item 7 of the Schedule 14D-9 is hereby amended and restated in its
entirety to read as follows:
"On October 5, 2000, the Company issued a press release, previously filed
as Exhibit G hereto and the text of which is incorporated herein by reference.
On October 25, 2000, the Company entered into an Agreement and Plan of
Merger (the "Merger Agreement") providing for the merger (the "MIGI Merger") of
the Company with a newly-formed, wholly-owned subsidiary of State Automobile
Mutual Insurance Company ("State Auto"). At the same time, the Company's largest
shareholder Meridian Mutual Insurance Company ("Meridian Mutual") entered into
an Agreement to Merge with and into State Auto (the "Mutual Merger" and together
with the MIGI Merger, the "Mergers"). As a result of the Mergers, (a) the
operations of Meridian Mutual and State Auto will be combined with State Auto as
the surviving corporation of the Mutual Merger, (b) the Company will become a
wholly-owned subsidiary of State Auto, and (c) the public shareholders of the
Company will receive $30.00 per share in cash. Each Merger is conditioned upon
consummation of the other Merger, receipt of insurance regulatory approvals and
receipt of antitrust clearance. In addition, the MIGI Merger must be approved by
the shareholders of the Company and the Mutual Merger must be approved by the
policyholders of Meridian Mutual and State Auto and reapproved by the board of
directors of each party. Meridian Mutual and State Auto have each agreed to vote
all Company shares owned by them in favor of the MIGI Merger. Together, the
mutual companies own approximately 53% of the Company's outstanding shares. The
Merger Agreement also provides for the payment of a break-up fee or liquidated
damages to State Auto or liquidated damages to the Company if the Merger
Agreement is terminated under certain circumstances.
The Company issued the press release attached as Exhibit H and incorporated
herein by reference with respect to the Mergers, on October 25, 2000.
Except as described in the above referenced press releases and except for
the board resolutions embodying the Board's recommendations described in Item 4:
<PAGE>
(a) no negotiation is being undertaken or is underway by the Company in
response to the Offer which relates to or would result in (1) a tender
offer or other acquisition of the Company's securities by the Company,
any subsidiary of the Company, or any other person; (2) an
extraordinary transaction such as a merger, reorganization or
liquidation involving the Company or any subsidiary of the Company;
(3) a purchase, sale or transfer of a material amount of assets by the
Company or any subsidiary of the Company; (4) any material change in
the present dividend rate or policy of the Company, or in the
indebtedness or capitalization of the Company; and
(b) there are no transactions, board resolutions, agreements in principle
or signed contracts entered into in response to the Offer which relate
to or would result in one or more of the matters referred to in clause
(a) of this Item 7."
ITEM 9. EXHIBITS
Exhibit A Letter to Shareholders, dated September 11, 2000.*
Exhibit B Press release issued by the Company, dated September 11, 2000.*
Exhibit C Excerpted Sections of MIGI's Proxy Statement, dated April 3,
2000, relating to MIGI's Annual Meeting of Shareholders.*
Exhibit D Opinion of A.G. Edwards & Sons, Inc., dated September 8, 2000.*
Exhibit E Letter to Shareholders, dated September 22, 2000.*
Exhibit F Press release issued by the Company, dated September 22, 2000.*
Exhibit G Press release issued by the Company, dated October 5, 2000.*
Exhibit H Press release issued by the Company, dated October 25, 2000.
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* Previously filed.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
October 26, 2000 /s/ Norma J. Oman
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Norma J. Oman
President and Chief Executive Officer
<PAGE>
FOR IMMEDIATE RELEASE
CONTACT:
State Auto Financial Corp.
James E. Duemey
614-464-5373
Meridian Insurance Group, Inc.
Steven R. Hazelbaker
317-931-7269
MERGER AGREEMENT REACHED BY
STATE AUTO MUTUAL AND MERIDIAN MUTUAL
Columbus, Ohio and Indianapolis, Indiana (October 25, 2000) -- State Auto
Financial Corporation of Columbus, Ohio, (NASDAQ:STFC) and Meridian Insurance
Group, Inc. (NASDAQ:MIGI) of Indianapolis, Indiana, jointly announced today that
their principal stockholders, State Automobile Mutual Insurance Company (State
Auto) and Meridian Mutual Insurance Company (Meridian Mutual), have agreed to
merge the two mutual companies. In addition, outstanding publicly owned shares
of MIGI are to be purchased by State Automobile Mutual for $30 per share upon
the closing of the transaction.
Direct sales for the State Auto Companies totaled $746 million in 1999.
Meridian's total 1999 sales were $302 million. The combined companies will be
the 48th largest property/casualty insurance group in the United States. The
merger is conditioned upon approval by regulators, MIGI shareholders, and
policyholders of both mutual companies.
"Meridian's 18 state operating territory meshes with State Auto's," said State
Auto Chairman Robert L. Bailey. "In virtually every respect the fit is perfect,
in terms of marketing system, products, people and philosophy. We intend to
utilize fully the skills and experience of the entire Meridian staff."
"We are convinced that a combination with State Auto is beneficial for all of
our constituencies," said Norma J. Oman, Meridian's President and CEO. "In
addition to excellent value for shareholders, no Meridian employee will be
displaced as a result of this transaction. The current Meridian corporate office
in Indianapolis will become the largest State Auto regional office, handling a
growing volume of business. Community financial support and employee
volunteerism will continue at an equivalent level. Agents and policyholders will
continue receiving broad products, competitive pricing and excellent service
with a financially stronger combined organization. We write the same types of
business, have comparable agency forces and have similar corporate cultures.
We're looking forward to what we believe will be a winning combination."
<PAGE>
MIGI is a holding company principally engaged in the property and casualty
insurance business through its wholly owned subsidiaries, Meridian Security
Insurance Company, Meridian Citizens Security Insurance Company and Insurance
Company of Ohio. Business is written primarily through nearly 1,400 independent
insurance agencies.
STFC is a regional property and casualty insurance company engaged primarily in
writing personal and commercial automobile, homeowners, commercial multi-peril,
workers' compensation and fire insurance. The company currently markets its
products through more than 13,100 agents associated with approximately 2,200
agencies in 26 states. Products are marketed primarily in the Midwest and
Eastern United States, excluding New York, New Jersey and the New England
states.
Except for historical information, all other information in this news release
consists of forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements are
subject to risks and uncertainties that could cause actual results to differ
materially from those projected, anticipated or implied. The most significant of
these uncertainties are described in State Auto Financial's and Meridian
Insurance Group, Inc.'s Form 10-K and Form 10-Q reports and exhibits to those
reports, and include (but are not limited to) legislative changes at both the
state and federal level, state and federal regulatory rule making
promulgation's, class action litigation involving the insurance industry and
judicial decisions affecting claims, policy coverages and the general costs of
doing business, the impact of competition on products and pricing, inflation in
the costs of the products and services insurance pays for, product development,
geographic spread of risk, weather and weather-related events, and other types
of catastrophic events. State Auto Financial and Meridian Insurance Group, Inc.
undertake no obligation to update or revise any forward-looking statements.
This release is neither an offer to sell nor a solicitation of an offer to buy
the securities of either company, nor a solicitation of a proxy. Any such offer
or solicitation will only be made in compliance with applicable securities law.
