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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (date of earliest event reported: May 22, 1997
FIRST DATA CORPORATION
(Exact name of registrant as specified in its charger)
Delaware 1-11073 47-0731996
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(State of other jurisdiction (Commission (IRS Employer or
incorporation) File Number) Identification No.)
401 Hackensack Avenue, Hackensack, New Jersey 07601
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (201) 525-4700
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
On May 22, 1997, the Company released two press releases which are attached as
Exhibit 99.1 and Exhibit 99.2. The first release announces that the Company's
Board of Directors has authorized redemption of the 5% Senior Convertible
Preferred Debentures Due 1999 issued by its subsidiary First Financial
Management Corporation and the repurchase of up to 20.4 million shares of the
Company's common stock to be used to satisfy anticipated conversions of the
Debentures. The second release announces the Company's agreement to divest its
First Health Strategies and First Health business units.
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SIGNATURE
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 hereunto duly authorized.
FIRST DATA CORPORATION
By: /s/ Thomas A. Rossi
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Thomas A. Rossi
Assistant Secretary
Dated: May 23, 1997
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EXHIBIT INDEX
Exhibit No. Description Page
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99.1 First Data Corporation Announces Stock Repurchase
Program. 5
99.2 First Data Corporation to Divest First Health Units 6
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EXHIBIT 99.1
FOR IMMEDIATE RELEASE CONTACTS: Donald Y. Sharp
Investor Relations
(770) 857-7118
Colleen D'Alessandro
Corporate Communications
(770) 857-7188
FIRST DATA CORPORATION ANNOUNCES
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STOCK REPURCHASE PROGRAM
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HACKENSACK, N.J., May 23, 1997--First Data Corporation (NYSE:FDC) today
announced that its Board of Directors authorized management to repurchase up to
20.4 million shares of FDC common stock. This program is in anticipation of
meeting the conversion requirements of $443.1 million of senior convertible
debentures which were guaranteed by First Data following the 1995 merger with
First Financial Management Corporation (FFMC).
In December 1994, FFMC issued the debentures which are convertible into
20.4 million shares of FDC common stock at a conversion rate of $21.755 per
share. The convertible debentures are redeemable at the option of FDC at 102
percent of par beginning Dec. 15, 1997. The Board's action gives management the
discretion to call for the redemption of the convertible debentures and to
repurchase shares in anticipation of the conversion of the debentures into FDC
common stock.
Repurchase activity will be financed primarily with proceeds from the
sale of the Company's First Health Strategies and First Health Services units
and from new borrowings.
First Data and its business units provide payment systems, electronic
commerce and information management services to financial institutions,
merchants, insurance companies, public utilities and consumers around the world.
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EXHIBIT 99.2
FOR IMMEDIATE RELEASE CONTACTS: Alan Boyer
First Data Corporation
(770) 857-7121
Joseph E. Whitters
HealthCare COMPARE Corp.
(630) 241-7511
FIRST DATA CORPORATION TO DIVEST FIRST HEALTH UNITS
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HealthCare COMPARE Corp. to Acquire Third Party Healthcare
Processing and Medicaid Claims Processing Units
HACKENSACK, N.J., and DOWNERS GROVE, Ill., May 23, 1997--First Data
Corporation (NYSE: FDC) today announced that Illinois-based HealthCare COMPARE
Corp. (NASDAQ: HCCC) has signed a definitive agreement to acquire First Data's
First Health Strategies, based in Salt Lake City, Utah, and First Health
Services, based in Richmond, Va. The transaction, valued at about $200 million
to be received in cash, is anticipated to close by July 1, 1997, subject to
regulatory approval.
Both First Health Strategies and First Health Services were acquired by
First Data in its 1995 merger with Atlanta-based First Financial Management
Corporation. The two companies provide independent health care administration
services such as claims administration and associated health care management
services to the self-insured corporate and government markets. First Data will
continue to operate two smaller healthcare operating units, VIPS, based in
Towson, Md., and EBPLife, based in Minneapolis, Minn.
"First Data is committed to focusing on maximizing our core competencies
in transaction and information processing," said Ric Duques, First Data's
chairman and chief executive officer. "As part of HealthCare COMPARE, First
Health will have the opportunity to grow and expand in the health care markets
it currently serves."
(more)
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First Data To Divest First Health Units, Page 2
James C. Smith, president and chief executive officer of HealthCare
COMPARE Corp. said, "The acquisition of First Health will round out COMPARE's
capabilities and complete the range of services necessary to offer a full
spectrum of managed care products to its group health clients. We welcome the
employees of First Health to our family of businesses and are committed together
to providing the best possible healthcare management services in the nation."
For First Data, while the loss of First Health's earnings will be
dilutive, the sale will positively impact First Data's ability to concentrate
its efforts on the higher growth card processing and payment instruments
businesses."
The loss on the transaction and the related impairment to the ongoing
value of other First Data healthcare operations are expected to produce an after
tax loss approaching $200 million. In addition, the absence from First Health
Strategies and First Health Services operations for the balance of 1997 will
reduce First Data's 1997 operating earnings by about $0.02 per share. As a
result, First Data now expects earnings per share (without considering the after
tax loss on the transaction and related impairment charge) to be approximately
$1.58. (See special note at the end of this news release concerning forward-
looking statements.)
FIRST HEALTH is one of the nation's largest health benefit claims
administrators serving the self-insured corporate and government markets. FIRST
HEALTH utilizes leading-edge technology to provide the industry's most advanced
health care administration system, integrating claims administration, data
analysis, medical case management, and other services.
Since pioneering the use of preferred provider arrangement and
utilization management services in the 1980s, HealthCare COMPARE Corp. has grown
to become a major managed care organization, with the largest integrated
Preferred Provider Organization (PPO) in the nation. The company provides
full-service medical cost management services to corporate employers, government
employee groups, unions, third party administrators, group health and workers'
compensation insurance carriers.
(more)
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FIRST DATA TO DIVEST FIRST HEALTH UNITS, PAGE 3
Founded in 1992, Hackensack, NJ-based First Data Corporation is a global
leader in payment systems, electronic commerce and information management
products and services. First Data and its principle operating units process the
information that allows millions of consumers to pay for goods or services by
credit, debit or smart card at the point of sale or over the Internet; by check,
or wire money--seamlessly and effortlessly. For more information about First
Data, visit us on the Internet at www:firstdatacorp.com.
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NOTICE TO INVESTORS, PROSPECTIVE INVESTORS AND THE INVESTMENT COMMUNITY
This press release includes forward-looking statements that express
expectations of future events. All forward-looking statements are inherently
uncertain as they are based on various expectations and assumptions concerning
future events and they are subject to numerous known and unknown risks and
uncertainties which could cause actual events or results to differ materially
from those projected. As more fully described in First Data's 10-Q for the
quarter ended March 31, 1997, important factors upon which the Company's
forward-looking statements are premised include the following (changes in these
assumptions could cause actual results to differ from the forward-looking
statements): (i) continued transaction growth in First Data's major product
lines at historical levels; (ii) achievement of expected acceptance and growth
of new product initiatives; (iii) absence of material client consolidations;
(iv) successful management of pricing pressures through cost efficiencies; (v)
no imposition of a value-added tax on third-party credit card processing
services by members of the European Community; (vii) no unanticipated changes in
law or industry association rules; (viii) continuation of the current interest
rate and foreign exchange environments, (ix) no unanticipated technological or
product developments increasing the costs of, or affecting the markets for, the
First Data's major business lines; and (x) successfully managing patent
protection and liability in the context of changing laws and developing
technologies.
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