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To: BUSINESS WIRE AMY LYNCH
Fax #: 312-573-0019 Ph. #: 888-292-4446
Contact: Mr. Gregory M. Shepard
Chairman and President
American Union Insurance Company
Phone: (309) 827-5968
AMERICAN UNION INSURANCE GROUP SCORES MAJOR VICTORY AS MERIDIAN INSURANCE GROUP,
INC. MAKES CORPORATE FILING OPTING OUT OF INDIANA ANTI-TAKEOVER STATUTES.
Today, Monday, September 11, 2000, American Union Insurance Group ("American
Union") announced a major victory in their tender offer for all the common
shares of Meridian Insurance Group, Inc. ("Meridian" NASDAQ: "MIGI"). Meridian
filed with the Indiana Secretary of State a Certificate of Correction to its
Articles of Incorporation stating that Meridian's Articles of Incorporation opt-
out of the protections afforded by the Indiana anti-takeover statutes. Meridian
filed this Certificate on September 6, 2000.
American Union filed a lawsuit against Meridian and its Board of Directors,
claiming among other things, that since 1997 Meridian's Articles of
Incorporation improperly reflected that meridian opted-into the provisions of
the Indiana Anti-Takeover statutes. Meridian, through its filings with the
Indiana Secretary of State, conceded the error. Ms. Norma Oman, in a letter to
American Union, dated September 8, 2000, called it an "honest mistake."
But American Union, in a letter to Meridian dated today, stated that:
"Meridian's Articles of Incorporation falsely stated to the world for 3 years
that the Company had opted into the Indiana Anti-Takeover statutes. This
misinterpretation of the facts could have cost the Meridian shareholders tens of
millions of dollars in premium over their stock price by discouraging potential
bidders."
On August 31, 2000, American Union Insurance Company commenced a cash tender
offer for all of the outstanding common stock of Meridian Insurance Group, Inc.,
for $20 per share, which represented a 57% premium based on the closing share
price on August 29, 2000.
The offer is conditioned upon, among other things, (1) there being validly
tendered and not properly withdrawn prior to the expiration of the offer a
number of common shares which, together with the 1,588,400 common shares [20.23%
of the June 30, 2000 outstanding] owned by Shepard, constitute at least 50.1% of
the voting securities of Meridian Insurance Group, Inc. outstanding or issuable
under the company's stock option plans, (2) Meridian's redemption of its
preferred share purchase rights, (3) American Union being satisfied, in its sole
discretion, that the provisions of the Indiana Business Combination chapter are
inapplicable to the offer and the proposed merger described herein, (4) American
Union being satisfied, in its sole discretion, that the provisions of
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the Indiana Control Share Acquisitions chapter are inapplicable to the offer and
the proposed merger described herein, (5) American Union having obtained all
insurance regulatory approvals necessary for their acquisition of control of
Meridian and its insurance subsidiaries and affiliates on terms and conditions
satisfactory to American Union, in its sole discretion, and (6) American Union
obtaining financing.
The offer and its withdrawal rights will expire at 5:00 P.M., New York City
time, on September 29, 2000, unless the offer is extended. The offer is being
made through a wholly owned subsidiary of American Union.
The Depositary and Information Agent for the offer is ChaseMellon Shareholder
Services, L.L.C., 44 Wall Street, 7th Floor, New York, New York, 10005, Call
Toll-Free (888) 451-6741.
American Union Insurance Company is a Bloomington, Illinois based property and
casualty insurance company originally chartered in 1916 by L.F. Shepard as Union
Automobile Insurance Association. The present name was adopted in 1998. Today
50% of American Union's common stock is owned by Gregory M. Shepard and 50% by
Tracy M. Shepard, who are brothers.
