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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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): December 17, 1996
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ALLMERICA PROPERTY & CASUALTY COMPANIES, INC.
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(Exact name of Registrant as specified in its charter)
Delaware 0-20668 04-3164595
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(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer I.D.
of Incorporation) Number)
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440 Lincoln Street, Worcester, Massachusetts 01653
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(Address of Principal Executive Offices) (Zip Code)
(508) 855-1000
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Registrant's Telephone Number, including area code
Page 1 of 4 pages
Exhibit Index on page 4
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Item 5. Other Events
On December 17, 1996, Allmerica Financial Corporation ("AFC") a 59.5%
stockholder of Allmerica Property & Casualty Companies, Inc. ("Allmerica P&C"),
announced that AFC's Board of Directors had made a proposal to the Board of
Directors of Allmerica P&C to acquire the shares of Common Stock of Allmerica
P&C that AFC and its subsidiaries do not already own (the "Acquisition"). Under
the proposal, each outstanding share of Allmerica P&C (other than shares owned
by AFC and its subsidiaries) would be exchanged for $16.59 in cash and 0.385 of
a share of AFC Common Stock (the "Merger Consideration"). Approximately $401
million of the aggregate Merger Consideration would be paid in cash and the
balance would be paid by the issuance of an aggregate of 9.3 million shares of
AFC Common Stock. Allmerica P&C shareholders would be permitted to elect to
receive the Merger Consideration all in cash, or alternatively, all in shares of
AFC Common Stock, subject to proration in the event either election is over-
subscribed.
Under the Proposal, Allmerica P&C would merge with a wholly-owned
acquisition subsidiary of AFC. Immediately before the merger, the Common Stock
of Allmerica P&C held by SMA Financial Corp. would be exchanged for Class B
Common Stock of Allmerica P&C. Upon consummation of the merger, Allmerica P&C
would be a wholly-owned subsidiary of AFC (the "Acquisition").
A copy of the written proposal provided to Allmerica P&C's Board of
Directors and AFC's press release announcing such proposal are attached hereto
as Exhibits 1 and 2, respectively, and each document is incorporated by
reference herein.
Item 7. Financial Statements and Exhibits
Exhibit 1 Proposal made to Allmerica P&C's Board of Directors by
AFC's Board of Directors regarding the Acquisition.
Exhibit 2 Press Release of AFC dated December 17, 1996 announcing
its to Allmerica P&C's Board of Directors regarding the
Acquisition.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
ALLMERICA PROPERTY & CASUALTY COMPANIES, INC.
By: /s/ John F. Kelly
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Title: Vice President
Date: December 18, 1996
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Exhibit Index Page
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Exhibit 1 Proposal made to Allmerica P&C's Board of Directors by
AFC's Board of Directors regarding the Acquisition.
Exhibit 2 Press Release of AFC dated December 17, 1996 announcing
its proposal to Allmerica P&C's Board of Directors regarding
the Acquisition.
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Exhibit 1
ALLMERICA FINANCIAL CORPORATION
440 Lincoln Street
Worcester, Massachusetts 01653
December 17, 1996
Board of Directors
Allmerica Property & Casualty Companies, Inc.
440 Lincoln Street
Worcester, MA 01653
Ladies and Gentlemen:
On behalf of Allmerica Financial Corporation ("AFC"), I am pleased to
submit this proposal (the "Proposal") to acquire all of the outstanding shares
of Common Stock of Allmerica Property & Casualty Companies, Inc. ("Allmerica
P&C") not held by AFC and its subsidiaries. Under the Proposal, each outstanding
share of Allmerica P&C (other than shares owned by AFC and its subsidiaries)
would be exchanged for $16.59 in cash and 0.385 of a share of AFC Common Stock
(the "Merger Consideration"). Approximately $401 million of the aggregate Merger
Consideration would be paid in cash and the balance would be paid by the
issuance of an aggregate of 9.3 million shares of AFC Common Stock. Allmerica
P&C shareholders would be permitted to elect to receive the Merger Consideration
all in cash, or alternatively, all in shares of AFC Common Stock, subject to
proration in the event either election is over-subscribed.
Under the Proposal, Allmerica P&C would merge with a wholly-owned
acquisition subsidiary of AFC. Immediately before the merger, the Common Stock
of Allmerica P&C held by SMA Financial Corp. would be exchanged for Class B
Common Stock of Allmerica P&C. Upon consummation of the merger, Allmerica P&C
would be a wholly-owned subsidiary of AFC.
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We believe the Proposal represents an attractive offer for the shareholders
of Allmerica P&C. Consummation of the Proposal is subject to negotiation of a
definitive agreement as well as the receipt of regulatory approvals. I look
forward to discussing the Proposal with you in more detail.
Very truly yours,
/s/ John F. O'Brien
John F. O'Brien
Chief Executive Officer
cc: Board of Directors - Allmerica Financial Corporation
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EXHIBIT 2
ALLMERICA FINANCIAL CORPORATION
OFFERS $29.00 PER SHARE FOR
ALLMERICA PROPERTY & CASUALTY COMPANIES, INC.
WORCESTER, Mass., December 17, 1996 -- Allmerica Financial Corporation (NYSE:
AFC) today announced that it has made a proposal to acquire the 24.2 million
shares of Allmerica Property & Casualty Companies, Inc. (NYSE: APY) that it does
not already own for cash and stock consideraton valued at approximately $700
million. Under the proposed terms of the merger transaction, shareholders of
Allmerica P&C would receive $16.59 in cash and 0.385 shares of Allmerica
Financial common stock in exchange for each share of Allmerica P&C.
Alternatively, shareholders of Allmerica P&C may choose all cash or all stock as
consideration, subject to limitations on aggregate amounts of stock and cash
available to be issued in the transaction. The value of the proposed merger
consideration is $29.00 per share, based on the 30-day average closing price for
Allmerica Financial common stock.
Allmerica Financial currently owns approximately 35.5 million shares of the
common stock of Allmerica P&C, or 59.5 percent of the outstanding shares of the
company. On December 16, 1996, the closing price of Allmerica P&C's common
stock was $28.50 per share.
A special committee of the independent directors of Allmerica P&C has been
appointed to evaluate the proposal. Consummation of the proposed transaction is
dependent upon the negotiation of a definitive agreement.
Allmerica Financial, headquartered in Worcester, Mass., is the holding company
for a diversified group of insurance and financial services companies with total
assets of $19 billion. The Allmerica Financial companies market insurance and
retirement savings products, as well as group benefit programs, to individual
and institutional clients. Through Allmerica P&C, Allmerica Financial offers
property and casualty insurance products nationally through an independent agent
distribution.
Allmerica P&C is among the top 30 property and casualty insurers in the United
States, based on net written premium. Allmerica P&C is regionally-focused in
the Northeast and Michigan, and operates through two primary subsidiaries, The
Hanover Insurance Company, and Citizens Corporation (NYSE: CZC).
CONTACTS
Investors Media
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Jean Peters Michael F. Buckley
Vice President, Investor Relations Director, Public Information
(508) 855-3599 (508) 855-3099
AF-46
12/17/96
