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SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
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) June 19, 1996
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ACE LIMITED
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(Exact name of registrant as specified in its charter)
Cayman Islands 1-11778 Not Applicable
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(State or other jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
The ACE Building
30 Woodbourne Avenue
Hamilton, Bermuda HM 08
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including are code: (441) 295-5200
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Not Applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
On June 19, 1996, ACE Limited (NYSE: ACL) ("ACE") and Tempest Reinsurance
Company Limited ("Tempest") announced that they have revised the terms of their
previously announced amalgamation. ACE also announced that it has set Monday,
July 1, 1996 as the new date for its extraordinary general meeting of
shareholders. Tempest also announced that it has set Thursday, June 27, 1996 as
the new date for its special general meeting of members. Subject to shareholder
approval, ACE and Tempest expect the amalgamation to close on July 1, 1996.
On June 19, ACE issued a press release relating to the June 19
announcement.
Included as Exhibit 99.1 to this Current Report on Form 8-K is a copy of
the press release.
Item 7. Exhibits.
99.1 Press Release, dated June 19, 1996.
2
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SIGNATURES
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 thereunto duly authorized.
Dated: June 20, 1996
ACE LIMITED
By: /s/ Christopher Z. Marshall
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Christopher Z. Marshall
Executive Vice President and
Chief Financial Officer
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EXHIBIT INDEX
Exhibit Sequential
Number Description Page No.
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99.1 Press Release, dated June 19, 1996
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EXHIBIT 99.1
[LOGO OF ACE LIMITED]
NEWS RELEASE
FOR IMMEDIATE RELEASE Investor Contact: Helen M. Wilson
Investor Relations
ACE Limited
(441) 299-9283
ACE and Tempest Agree to Revised Amalgamation Terms
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and Reschedule Shareholders Meetings
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HAMILTON, Bermuda, June 19, 1996 -- ACE Limited (NYSE: ACL) and Tempest
Reinsurance Company Limited announced today that they have revised the terms of
their previously announced amalgamation. Subject to shareholder approval, the
Amalgamation is expected to close on July 1, 1996. Tempest also announced that
its board of directors has terminated discussions with IPC Holdings, Ltd.
Under the amended amalgamation agreement, Tempest's shareholders will receive a
cash dividend, ordinary shares in ACE Limited and a "Guaranteed Value Cash
Dividend" of up to $50 million. Tempest's "Net Assets" (as defined in the
amended amalgamation agreement) at the closing date are expected to be $452.5
million, less any dividend declared with respect to the "Guaranteed Value Cash
Dividend". In addition, the 42 percent loss ratio provision has been removed
from the calculation of Tempest's "Net Assets" and the ability of either party
to terminate the transaction if the "Average Closing Price" (used in determining
the number of ACE ordinary shares to be issued in the transaction) is greater
than $49.00 has been eliminated.
Tempest's board of directors will determine, in its sole discretion, the
allocation of "Net Assets" in excess of $452.5 million among the Tempest
shareholders, including General Re Corporation ("General Re"). The
Tempest board currently estimates that General Re will receive aggregate
consideration of approximately $216 million for its shares and options and
for the termination of its underwriting services contract.
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[LOGO OF ACE LIMITED]
NEWS RELEASE
Page 2
The "Guaranteed Value Cash Dividend" will be calculated as the difference
between $49.00 and the "ACE Closing Price" multiplied by approximately 13.3
million. The "ACE Closing Price" will be equal to the weighted average trading
price of ACE's ordinary shares on three of the following four days: (i) the two
NYSE trading days immediately before the closing date, (ii) the closing date and
(iii) the NYSE trading day immediately following the closing date, with the day
on which the lowest weighted average trading price of ACE's ordinary shares
occurs being excluded. The "Guaranteed Value Cash Dividend" shall in no event
be greater than $50 million.
ACE and Tempest have also agreed that if the amalgamation is approved by
Tempest's shareholders, Tempest's board of directors will not have the
right to consider acquisition proposals from third parties for a certain period,
and Tempest and ACE will no longer have the contractual right to terminate the
amalgamation agreement under certain circumstances.
Brian Duperreault, ACE's chairman, president and chief executive officer, stated
"We look forward to approval of the amalgamation and related transactions by
Tempest and ACE shareholders and closing the ACE/Tempest transaction shortly
thereafter. The ACE/Tempest transaction will diversify ACE's overall risk
profile and expand ACE's customer base."
Donald Kramer, Tempest's co-chairman, commented "We are delighted with the
revised agreement with ACE. The combination of Tempest and ACE will provide
Tempest shareholders with superior value and an investment in a large,
diversified international property and casualty insurance company. The entire
board of directors is pleased to have been able to provide Tempest shareholders
with a superior offer and substantial liquidity for their investment."
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[LOGO OF ACE LIMITED]
NEWS RELEASE
Page 3
James Gustafson, chairman and chief executive officer of General Reinsurance
Corporation, said "We are very pleased with the revised terms of the agreement
and General Re currently intends to vote in favor of the transaction."
ACE also announced that it has set Monday July 1, 1996 as the new date for the
extraordinary general meeting of shareholders previously scheduled for June 19
to vote on the issuance of ACE ordinary shares in the amalgamation with Tempest.
Tempest also announced that it has set Thursday June 27, 1996 as the new date
for the special general meeting of members previously scheduled for June 19 to
vote on its amalgamation with ACE.
A supplement to the Joint Proxy Statement/Prospectus previously delivered to ACE
and Tempest shareholders containing information concerning the amended
amalgamation agreement, certain recent developments and other important
information relating to the ACE/Tempest transaction will be provided as soon as
possible. Accompanying the supplement will be a proxy card to be used to vote at
the meetings. Shareholders of ACE that have already submitted a proxy card do
not need to submit an additional proxy card unless they wish to change their
vote.
The ACE group of companies specializes in catastrophe insurance for a diverse
group of international clients. ACE Limited's Bermuda subsidiaries are leading
providers of high level excess and directors and officers liability insurance,
and also provide satellite, aviation, excess property and financial lines
coverages. ACE owns a majority interest in Methuen Group Limited and provides
corporate capital to Lloyd's syndicates managed by Menthuen's managing agency.
At March 31, 1996, ACE Limited had over $1.5 billion in shareholders' equity and
$3.5 billion in assets.
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