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. 1)
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
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This Amendment No. 1 (the "Amendment") amends and supplements the
Solicitation/Recommendation Statement on Schedule 14D-9 ("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
Schedule 14D-9 relates to a tender offer (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. According to the Offer, the tender offer is 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 (which together
constitute the "Offer"). Capitalized terms not defined herein have the meanings
set forth in the Schedule 14D-9 filed on September 11, 2000.
ITEM 4. THE SOLICITATION OR RECOMMENDATION
Item 4 of the Schedule 14D-9 is hereby amended in the following respects.
Paragraph (3)(d) is amended by adding the following sentence at the end of
paragraph (3)(d):
"Shepard was the Chairman, Chief Executive Officer and majority shareholder
of Illinois Healthcare from the time it was founded until it commenced
voluntary liquidation proceedings."
Paragraph (4) is amended by adding the following sentence as the
penultimate sentence of the paragraph:
"Shepard was also the majority shareholder of Illinois Healthcare during
its brief existence."
Paragraph (9) is amended by adding the following sentence at the end of the
paragraph:
"The Board believes that Shepard's control of the Company would create
significant uncertainties with respect to the future direction of the
Company and its relationships with employees, agents, and policyholders,
particularly in view of his history and experience in the insurance
industry, some of which is discussed above."
ITEM 9. EXHIBITS
The A.G. Edwards opinion filed as Exhibit D to the Schedule 14D-9 is
deleted and replaced with Exhibit D attached to this Amendment No. 1.
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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.
September 14, 2000 /s/ Norma J. Oman
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Norma J. Oman President and Chief
Executive Officer
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Exhibit D
September 8, 2000
The Board of Directors
Meridian Insurance Group, Inc.
2955 North Meridian Street
P. O. Box 1980
Indianapolis, IN 46206
Ladies and Gentlemen:
We understand that American Union Insurance Company (the "Offerer") has
commenced a tender offer for all of the outstanding shares of common stock, no
par value per share (the "Company Shares"), of Meridian Insurance Group, Inc.
(the "Company") not owned by the Offerer or its affiliates for $20.00 per share,
net to the seller in cash and without interest thereon, upon the terms and
subject to the conditions set forth in the Offer to Purchase dated August 31,
2000 (the "Offer to Purchase") and the related Letter of Transmittal (which
together with the Offer to Purchase constitutes the "Offer"). The terms of the
Offer are more fully set forth in the Schedule TO (the "Schedule TO") filed by
the Offerer with the Securities and Exchange Commission on August 30, 2000. We
also understand that the Offerer owns approximately 20.2% of the outstanding
Company Shares.
We have been requested by the Board of Directors (the "Board") of the
Company to render our opinion as to the fairness, from a financial point of
view, to the holders (other than the Offerer and its affiliates) of the
outstanding Company Shares (the "Independent Shareholders") of the consideration
offered to such Independent Shareholders in the Offer.
A.G. Edwards & Sons, Inc. ("A.G. Edwards"), as part of its investment
banking business, is regularly engaged in the valuation of businesses and their
securities in connection with mergers and acquisitions, negotiated
underwritings, competitive biddings, secondary distributions of listed and
unlisted securities, private placements and valuations for estate, corporate or
other purposes. We are not aware of any present or contemplated relationship
between A.G. Edwards and the Company, the Company's directors and officers or
its shareholders, or the Offerer, its directors, officers or shareholders, which
in our opinion would affect our ability to render a fair and independent opinion
in this matter.
In connection with this opinion, we have, among other things:
i.) reviewed the terms and conditions of the Offer and the
Schedule TO;
ii.) reviewed publicly available information concerning the
Company, the Offerer and its affiliates that we believed to be relevant to our
analysis;
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iii.) reviewed certain historical financial statements and operating
information and financial projections for the Company furnished to us by the
Company;
iv.) held discussions with management of the Company regarding the
past and current business operations, assets, financial condition and future
prospects of the Company;
v.) reviewed the industry in which the Company operates;
vi.) reviewed a trading history of the Company Shares and a
comparison of that trading history with those of other companies that we deemed
relevant;
vii.) compared certain financial information for the Company,
including its recent public market valuation and the valuation proposed in the
Offer, with similar information and stock market information for certain other
companies, the securities of which are publicly traded;
viii.) compared certain financial information for the Company,
including its recent public market valuation and the financial terms of the
Offer, with similar information for certain recent transactions deemed relevant;
ix.) compared the premium over recent market prices for the Company
Shares implied in the Offer to premiums in certain recent business combinations
deemed relevant;
x.) reviewed a range of valuations of the Company based on
discounted present values of its projected cash flows; and
xi.) completed such other studies and analyses that we considered
appropriate.
In preparing our opinion, A.G. Edwards has assumed and relied upon,
without independent verification, the accuracy and completeness of all financial
and other information publicly available or that was supplied or otherwise made
available to us by the Company. We have not been engaged to, and therefore we
have not, verified the accuracy or completeness of any of such information. A.G.
Edwards has been informed and assumed that the financial projections supplied
to, discussed with or otherwise made available to us reflect the best currently
available estimates and judgments of the management of the Company as to the
expected future financial performance of the Company on a stand-alone basis.
A.G. Edwards has not independently verified such information or assumptions, nor
do we express any opinion with respect thereto. We have not made any independent
valuation or appraisal of the assets or liabilities of the Company, nor have we
been furnished with any such appraisals. A.G. Edwards has relied upon the
assurances of the management of the Company that they are not aware of any facts
that would make such information inaccurate or misleading.
In performing its analyses, A.G. Edwards made numerous assumptions with
respect to the property and casualty insurance industry, the various segments of
the industry in which the Company operates, general business and economic
conditions and government regulations, which are beyond the control of the
Company. The analyses performed by A.G. Edwards are not necessarily indicative
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of actual values or actual future results, which may be significantly more or
less favorable than suggested by such analyses. Such analyses were prepared
solely as part of A.G. Edwards' analysis of the fairness, from a financial point
of view, to the Independent Shareholders of the consideration offered in the
Offer and are being provided to the Board in connection with the delivery of
this opinion.
A.G. Edwards' opinion is necessarily based on economic, market and
other conditions as in effect on, and the information made available to us as
of, the date hereof. Our opinion as expressed herein, in any event, is limited
to the fairness, from a financial point of view, to the Independent Shareholders
of the consideration offered in the Offer.
Based upon and subject to the foregoing, it is our opinion that, as of
the date hereof, the consideration which has been offered pursuant to the Offer
is inadequate, from a financial point of view, to the Independent Shareholders.
We have acted as financial advisor to the Company in connection with
the Offer and will receive a fee for such services. In addition, the Company has
agreed to indemnify us for certain liabilities that may arise out of the
rendering of this opinion and any related activities as the Company's advisor.
We also have performed and may continue to perform various investment banking
services for the Company. In the ordinary course of business, we may actively
trade in the debt and equity securities of the Company for our own account and
for the accounts of our customers and, accordingly, may at any time hold a long
or short position in such securities.
It is understood that this letter is for the information of the Board and
the Company's management and, except as required by law, may not be reproduced,
summarized, described, characterized, excerpted from, referred to or given to
any other person for any purpose without our prior written consent (which will
not be unreasonably withheld) except that this opinion may be included in its
entirety and the procedures followed in rendering this opinion may be summarized
(such summary to be reviewed and approved by A.G. Edwards) in any proxy, tender
offer or other materials which may be distributed to the shareholders of the
Company regarding the Offer. This opinion is not intended to be and does not
constitute a recommendation to any shareholder of the Company as to whether to
accept the consideration offered to the Independent Shareholders in the Offer.
Very truly yours,
A.G. EDWARDS & SONS, INC.
By: /s/ Douglas E. Reynolds
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Douglas E. Reynolds
Managing Director- Investment Banking
