<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13E-3
RULE 13E-3 TRANSACTION STATEMENT
(PURSUANT TO SECTION 13(e) OF THE SECURITIES EXCHANGE ACT OF 1934)
-----------------
WESTERN NATIONAL CORPORATION
(NAME OF THE ISSUER)
ASTRO ACQUISITION CORP.
AMERICAN GENERAL CORPORATION
(NAME OF PERSONS FILING STATEMENT)
-----------------
COMMON STOCK, PAR VALUE $.001 PER SHARE
(TITLE OF CLASS OF SECURITIES)
MORRIS J. KRAMER, ESQ. JAMES C. MORPHY, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER SULLIVAN & CROMWELL
& FLOM LLP 125 BROAD STREET
919 THIRD AVENUE NEW YORK, NY 10004
NEW YORK, NY 10022 (212) 558-4000
(212) 735-3000
(NAME, ADDRESS AND TELEPHONE OF PERSONS AUTHORIZED TO RECEIVE NOTICES
AND COMMUNICATIONS ON BEHALF OF PERSONS FILING STATEMENT)
This statement is filed in connection with (check the appropriate box):
a. [X] The filing of solicitation materials or an information statement
subject to Regulation 14A, Regulation 14C or Rule 13e-3(c) under the
Securities Exchange Act of 1934.
b. [X] The filing of a registration statement under the Securities Act of
1933.
c. [_] A tender offer.
d. [_] None of the above.
Check the following box if the soliciting materials or information
statement referred to in checking box (a) are preliminary copies. [X]
CALCULATION OF FILING FEE
TRANSACTION VALUATION* AMOUNT OF FILING FEE
$1,153,715,399 $230,743.08
* For purposes of calculating fee only. The filing fee was determined based
upon (a) an aggregate 40,171,149 issued and outstanding shares (including
shares subject to options) of common stock, par value $.001 per share (the
"Shares"), of Western National Corporation and outstanding options to
purchase Shares as of September 11, 1997; and (b) the average high and
low prices on October 27, 1997 of $28.72 per Share as reported for the
Western National Common Stock in The Wall Street Journal. The payment of
-----------------------
the filing fee, calculated in accordance with Regulation 240.0-11 under the
Securities Exchange Act of 1934, as amended, equals one-fiftieth of one
percent of the value of the Shares (and options to purchase Shares).
[ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form or
Schedule and the date of its filing.
Amount Previously Paid: Not applicable
Form or Registration No.:
Filing Party: Not applicable
Date Filed: Not applicable
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<PAGE>
INTRODUCTION
This Rule 13e-3 Transaction Statement on Schedule 13E-3 is being filed by
Western National Corporation, a Delaware corporation (the "Company"), and
American General Corporation, a Texas corporation ("American General"), and
Astro Acquisition Corp, a Delaware corporation ("Merger Sub"), in connection
with the proposed merger (the "Merger") of Merger Sub with and into the Company
pursuant to an Agreement and Plan of Merger, dated as of September 11, 1997,
(the "Merger Agreement"), by and among the Company, American General and Merger
Sub.
The Merger Agreement provides for the merger of Merger Sub with and into
the Company, with the Company being the surviving corporation (the "Surviving
Corporation"). Upon the effectiveness of the Merger (the "Effective Time"), each
share of common stock, par value $.001 per share, of the Company (the "Common
Shares"), issued and outstanding immediately prior to the Effective Time (except
Common Shares held by the Company as treasury stock and Common Shares owned by
American General or any of its subsidiaries) will be converted into and become
exchangeable for, at the election of the holder thereof, the right to receive
(i)$29.75 in cash (the "Cash Consideration") or (ii) the number of shares of
common stock, par value $.50 per share, of American General (the "Stock
Consideration") equal to the ratio determined by dividing $29.75 by the Average
AGC Price (as defined in the Proxy Statement/Prospectus), the "Merger";
provided, however, that upon the terms and subject to the conditions set forth
in the Merger Agreement, the Cash Consideration and Stock Consideration will be
adjusted if the Average AGC Price is less than $47.00 or above $53.00.
This Schedule 13E-3 is being filed with the Securities and Exchange
Commission concurrently with a registration statement on Form S-4 filed by
American General (the "Proxy Statement/Prospectus"). A copy of the Proxy
Statement/Prospectus is attached hereto as Exhibit (d)(1). The following cross
reference sheet is being supplied pursuant to General Instruction F to Schedule
13E-3 and shows the location in the Proxy Statement/Prospectus of the
information required to be included in this Schedule 13E-3. The information
contained in the Proxy Statement/Prospectus, including all the annexes thereto,
is expressly incorporated herein by reference and the responses to each item are
qualified in their entirety by reference to the information contained in the
Proxy Statement/Prospectus and the annexes thereto. Capitalized terms used
herein and not otherwise defined herein shall have the meanings ascribed to such
terms in the Proxy Statement/Prospectus.
2
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<TABLE>
<CAPTION>
ITEM NUMBER AND
CAPTION IN SCHEDULE 13E-3 LOCATION IN THE PROXY STATEMENT
------------------------- -------------------------------
<S> <C> <C>
1. ISSUER AND CLASS OF SECURITY
SUBJECT TO THE TRANSACTION
(a) "Summary of Proxy Statement/Prospectus,"
"Certain Information Regarding American
General" and "Certain Information
Concerning Western National"
(b) "Summary of Proxy Statement/Prospectus"
and "The Special Meeting"
(c) "Summary of Proxy Statement/Prospectus"
and "Market Price Data and Dividends"
(d) "Market Price Data and Dividends"
(e) Not Applicable
(f) "Special Factors--Background of the
Merger" "Special Factors--Certain
Transactions in Company Common Stock"
2. IDENTITY AND BACKGROUND "Summary of Proxy Statement/Prospectus,"
"Certain Information Concerning American
General" and "Certain Information
Concerning Western National"
3. PAST CONTACTS, TRANSACTIONS OR
NEGOTIATIONS
(a)(1) Not Applicable
(a)(2) "Special Factors"
(b) "Special Factors"
4. TERMS OF THE TRANSACTION
(a) "Summary of Proxy Statement/Prospectus,"
"Special Factors" and "The Proposed
Merger"
(b) "Summary of Proxy Statement/Prospectus,"
"Special Factors" and "The Proposed
Merger"
5. PLANS OR PROPOSALS OF THE
ISSUER OR AFFILIATE
(a) - (g) "Special Factors -- Purpose and Structure
of the Merger" and "Special Factors --
Certain Effects of the Merger; Plans
for the Company after the Merger"
6. SOURCE AND AMOUNTS OF FUNDS
OR OTHER CONSIDERATION
(a) - (c) "Special Factors -- Source and Amount of
Funds" and "The Proposed Merger --The
Merger Agreement --Expenses "
(d) Not Applicable
7. PURPOSE(S), ALTERNATIVES,
REASONS AND EFFECTS
(a) - (c) "Special Factors -- Background of the
Merger," "Special Factors -- Purpose and
Structure of the Merger," "Special
Factors -- Recommendation of the Board of
Directors of the Company and the Special
Committee of: Fairness of the Merger,"
"Special Factors -- Opinion of Western
National's Financial Advisor;" "Special
Factors -- Opinion of American General's
Financial Advisor" and "Special Factors
</TABLE>
3
<PAGE>
<TABLE>
<S> <C> <C>
-- Certain Effects of the Merger; Plans
for the Company after the Merger,"
(d) "Special Factors -- Purpose and Structure
of the Merger," "Special Factors --
Interests of Certain Persons in the
Merger," "Special Factors -- Certain
Effects of the Merger; Plans for the
Company after the Merger," "Special
Factors -- Certain Federal Income Tax
Consequences of the Merger," "Special
Factors -- Accounting Treatment" and
"The Proposed Merger Agreement --
Conversion of Shares"
8. FAIRNESS OF THE TRANSACTION
(a) - (e) "The Special Meeting -- Votes Required;
Voting Rights," "Special Factors --
Background of the Merger," "Special
Factors -- Purpose and Structure of the
Merger," "Special Factors --
Recommendation of the Board of Directors
of the Company and the Special Committee;
Fairness of the Merger," " Special
Factors -- Opinion of Western National's
Financial Advisor" and "Special Factors
-- Opinion of American General's
Financial Advisor "
(f) Not Applicable
9. REPORTS, OPINIONS, APPRAISALS
AND CERTAIN NEGOTIATIONS
(a) - (c) "Special Factors -- Background of the
Merger," "Special Factors --
Recommendation of the Board of Directors
of the Company and the Special Committee;
Fairness of the Merger," "Special Factors
-- Opinion of Western National's
Financial Advisor" and "Special Factors
-- Opinion of American General's
Financial Advisor "
10. INTEREST IN SECURITIES OF THE
ISSUER
(a) "Security Ownership" "Special Factors --
Background of the Merger" and "Special
Factors -- Interests of Certain Persons
in the Merger"
(b) Not Applicable
11. CONTRACTS, ARRANGEMENTS OR
UNDERSTANDINGS WITH RESPECT
TO THE ISSUER'S SECURITIES "Summary of Proxy Statement/Prospectus,"
"Special Factors -- Background of the
Merger," "The Proposed Merger --
Conversion of Shares," "The Proposed
Merger -- The Merger Agreement --
Conditions to the Merger" and "The
Proposed Merger -- Votes Required, Voting
Rights"
12. PRESENT INTENTION AND
RECOMMENDATION OF CERTAIN
PERSONS WITH REGARD TO THE
TRANSACTION
(a) - (b) "Summary of Proxy Statement/Prospectus,"
"Special Factors -- Background of the
Merger," "Special Factors --
Recommendation of the Board of Directors
of the Company and the Special Committee;
Fair-
</TABLE>
4
<PAGE>
<TABLE>
<S> <C> <C>
ness of the Merger" and "The Special
Meeting -- Votes Required; Voting Rights"
13. OTHER PROVISIONS OF THE
TRANSACTION
(a) "Summary of Proxy Statement/Prospectus"
and "The Proposed Merger -- Rights of
Dissenting Stockholders"
(b) Not Applicable
(c) Not Applicable
14. FINANCIAL INFORMATION
(a) "Summary of Proxy Statement/Prospectus --
Summary Historical Financial Data of
Western National," "Summary of Proxy
Statement/Prospectus -- Summary
Historical Financial Data of American
General," "Selected Historical Financial
Data of Western National" and "Selected
Historical Financial Data of American
General"
(b) "Summary of Proxy Statement/Prospectus --
Summary Pro Forma Per Share and Other
Data"
15. PERSONS AND ASSETS EMPLOYED,
RETAINED OR UTILIZED
(a) "Special Factors -- Interests of Certain
Persons in the Merger," "Special Factors--
Post-Acquisition Compensation and
Benefits," and "The Proposed Merger --The
Merger Agreement -- Expenses"
(b) "The Special Meeting -- Solicitation of
Proxies"
</TABLE>
5
<PAGE>
ITEM 1. ISSUER AND CLASS OF SECURITY SUBJECT TO THE TRANSACTION
(a) The information set forth in "Summary of Proxy
Statement/Prospectus," "Certain Information Concerning American General" and
"Certain Information Concerning Western National" in the Proxy
Statement/Prospectus is hereby incorporated herein by reference.
(b) The information set forth in "Summary of Proxy
Statement/Prospectus" and "The Special Meeting" in the Proxy
Statement/Prospectus is hereby incorporated herein by reference.
(c) The information set forth in "Summary of Proxy
Statement/Prospectus" and "Market Price Data and Dividends" in the Proxy
Statement/Prospectus is hereby incorporated herein by reference.
(d) The information set forth in "Market Price Data and Dividends" in
the Proxy Statement/Prospectus is hereby incorporated herein by reference.
(e) Not Applicable.
(f) The information set forth in "Special Factors -- Background of the
Merger" and "Special Factors -- Certain Transactions in Company Common Stock" in
the Proxy Statement/Prospectus is hereby incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND
(a) - (d) and (g) This Statement is being filed by the Company, and by
Merger Sub and American General as affiliates of the Company. The Company is the
issuer of the common stock which is the subject of the Rule 13e-3 transaction.
The information set forth in "Certain Information Concerning American General"
and "Certain Information Concerning Western National" in the Proxy
Statement/Prospectus is hereby incorporated herein by reference.
The following is certain information regarding the Company's
affiliates.
American General Corporation was incorporated in the State of Texas.
Its address is 2929 Allen Parkway, 36th Floor, Houston, Texas 77019.
Astro Acquisition Corp. was incorporated in the State of Delaware. The
mailing address is c/o American General Corporation, 2929 Allen Parkway, 36th
Floor, Houston, Texas 77019.
(e) - (f) During the last five years, no person listed above has been
convicted in a criminal proceeding or has been party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order enjoining
further violations of, or prohibiting activities, subject to, federal or state
securities laws or finding any violations of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS.
(a) (1) Not Applicable.
(a) (2) The information set forth in "Special Factors" in
the Proxy Statement/Prospectus is hereby incorporated herein by reference.
(b) The information set forth in "Special Factors" in the Proxy
Statement/Prospectus is hereby incorporated herein by reference.
ITEM 4. TERMS OF THE TRANSACTION
(a) The information set forth in "Summary of Proxy
Statement/Prospectus," "Special Factors" and "The Proposed Merger" in the Proxy
Statement/Prospectus is hereby incorporated herein by reference.
(b) The information set forth in "Summary of Proxy
Statement/Prospectus," "Special Factors" and "The Proposed Merger" in the Proxy
Statement/Prospectus is hereby incorporated herein by reference.
6
<PAGE>
ITEM 5. PLANS OR PROPOSALS OF THE ISSUER OR AFFILIATE
(a) - (g) The information set forth in "Special Factors -- Purpose
and Structure of the Merger" and "Special Factors -- Certain Effects of the
Merger; Plans for the Company after the Merger" in the Proxy
Statement/Prospectus is hereby incorporated herein by reference.
ITEM 6. SOURCE AND AMOUNTS OF FUNDS OR OTHER CONSIDERATION.
(a) - (c) The information set forth in "Special Factors -- Source and
Amount of Funds" and "The Proposed Merger --The Merger Agreement -- Expenses" in
the Proxy Statement/Prospectus is hereby incorporated herein by reference.
(d) Not Applicable.
ITEM 7. PURPOSE(S), ALTERNATIVES, REASONS AND EFFECTS.
(a) - (c) The information set forth in "Special Factors -- Background
of the Merger;" "Special Factors -- Purpose and Structure of the Merger;"
"Special Factors -- Recommendation of the Board of Directors of the Company and
the Special Committee; Fairness of the Merger," "Special Factors -- Opinion of
Western National's Financial Advisor," "Opinion of American General's Financial
Advisor," and "Special Factors -- Certain Effects of the Merger; Plans for the
Company after the Merger" in the Proxy Statement/Prospectus is hereby
incorporated herein by reference.
(d) The information set forth in "Special Factors -- Purpose and
Structure of the Merger," "Special Factors -- Interests of Certain Persons in
the Merger," "Special Factors -- Certain Effects of the Merger; Plans for the
Company after the Merger," "The Merger Agreement -- Certain Federal Income Tax
Consequences of the Merger," "Special Factors -- Accounting Treatment" and "The
Merger Agreement --Conversion of Shares" in the Proxy Statement/Prospectus is
hereby incorporated herein by reference.
ITEM 8. FAIRNESS OF THE TRANSACTION.
(a) - (e) The information set forth in "The Special Meeting -- Votes
Required; Voting Rights," "Special Factors -- Background of the Merger;"
"Special Factors -- Purpose and Structure of the Merger," "Special Factors --
Recommendation of the Board of Directors and the Special Committee of the
Company; Fairness of the Merger," "Special Factors -- Opinion of Western
National's Financial Advisor" and "Special Factors -- Opinion of American
General's Financial Advisor" in the Proxy Statement/Prospectus is hereby
incorporated by reference.
(f) Not Applicable.
ITEM 9. REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS.
(a) - (c) The information set forth in "Special Factors -- Background
of the Merger," "Special Factors -- Recommendation of the Board of Directors of
the Company and the Special Committee; Fairness of the Merger," "Special
Factors -- Opinion of Western National's Financial Advisor" and "Special
Factors -- Opinion of American General's Financial Advisor" in the Proxy
Statement/Prospectus is hereby incorporated herein by reference.
A copy of the DLJ Opinion is attached as Annex B to the Proxy
Statement/Prospectus; and a copy of the Goldman Sachs opinion is attached as
Annex C to the Proxy Statement/Prospectus.
ITEM 10. INTEREST IN SECURITIES OF THE ISSUER.
(a) The information set forth in "Security Ownership" and "Special
Factors -- Background of the Merger," "Special Factors -- Interests of Certain
Persons in the Merger" in the Proxy Statement/Prospectus is hereby incorporated
herein by reference.
(b) Not Applicable.
7
<PAGE>
ITEM 11. CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS WITH RESPECT TO THE ISSUER'S
SECURITIES.
The information set forth in "Summary of Proxy Statement/Prospectus,"
"Special Factors -- Background of the Merger," "The Proposed Merger --Conversion
of Shares," "The Proposed Merger -- The Merger Agreement -- Conditions to the
Merger" and "The Proposed Merger -- Votes Required; Voting Rights" in the Proxy
Statement/Prospectus is hereby incorporated herein by reference.
ITEM 12. PRESENT INTENTION AND RECOMMENDATION OF CERTAIN PERSONS WITH REGARD TO
THE TRANSACTION.
(a) - (b) The information set forth in "Summary of Proxy
Statement/Prospectus," "Special Factors -- Background of the Merger," "Special
Factors -- Recommendation of the Board of Directors of the Company and the
Special Committee; Fairness of the Merger" and "The Special Meeting -- Votes
Required; Voting Rights" in the Proxy Statement/Prospectus is hereby
incorporated herein by reference.
ITEM 13. OTHER PROVISIONS OF THE TRANSACTION.
(a) The information set forth in "Summary of Proxy
Statement/Prospectus" and "The Proposed Merger -- Rights of Dissenting
Stockholders" in the Proxy Statement/Prospectus is hereby incorporated by
reference.
(b) Not Applicable.
(c) Not Applicable.
ITEM 14. FINANCIAL INFORMATION.
(a) The information set forth in "Summary of Proxy
Statement/Prospectus -- Summary Historical Financial Data of Western National;"
"Summary of Proxy Statement/Prospectus -- Summary Historical Financial Data of
American General," "Selected Historical Financial Data of American General"
and "Selected Historical Financial Data of Western National" is hereby
incorporated herein by reference.
(b) The information set forth in "Summary of Proxy
Statement/Prospectus -- Summary Pro Forma Per Share and Other Data" in the Proxy
Statement/Prospectus is hereby incorporated herein by reference.
ITEM 15. PERSONS AND ASSETS EMPLOYED, RETAINED OR UTILIZED.
(a) The information set forth in "Special Factors -- Interests of
Certain Persons in the Merger," "The Proposed Merger -- The Merger Agreement --
Expenses" and "Special Factors -- Post-Acquisition Compensation and Benefits" in
the Proxy Statement/Prospectus is hereby incorporated herein by reference.
(b) The information set forth in "The Special Meeting -- Solicitation
of Proxies" in the Proxy Statement/Prospectus is hereby incorporated herein by
reference.
ITEM 16. ADDITIONAL INFORMATION.
The information set forth in the Proxy Statement/Prospectus and the
Annexes thereto is incorporated herein by reference.
ITEM 17. MATERIAL TO BE FILED AS EXHIBITS.
(a) Not Applicable.
(b)(1) Opinion of Donaldson, Lufkin & Jenrette Securities Corporation
("DLJ"), financial advisor to the Special Committee of the Board of Directors of
Western National Corporation included as Annex B in the Proxy
Statement/Prospectus is hereby incorporated by reference.
(b)(2) Written materials prepared by DLJ for the Special Committee of
the Board of Directors of Western National Corporation.
(b)(3) Opinion of Goldman, Sachs & Co. ("Goldman Sachs"), financial
advisor to the Special Committee of the Board of Directors of American General
Corporation included as Annex C in the Proxy Statement/Prospectus is hereby
incorporated by reference.
(b)(4) Discussion materials prepared by Goldman Sachs for the Board of
Directors of American General Corporation .
(c)(1) Agreement and Plan of Merger, dated as of September 11, 1997,
among Western National Corporation, American General Corporation and Astro
Acquisition Corporation included as Annex A in the Proxy Statement/Prospectus is
hereby incorporated by reference.
(d) The Proxy Statement/Prospectus relating to the proposed Merger is
hereby incorporated by reference.
(e) The information set forth in "Comparison of Stockholder Rights--
Dissenters' Rights" and Section 262 from the Delaware General Corporation Law
Regarding Appraisal Rights included as Annex D in the Proxy Statement/Prospectus
is hereby incorporated by reference.
(f) Not Applicable.
8
<PAGE>
SIGNATURE
After due 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.
October 28, 1997
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(Date)
/s/ Nicholas R. Rasmussen
----------------------------
(Signature)
Nicholas R. Rasmussen
----------------------------
(Name)
American General Corporation
October 28, 1997
----------------------------
(Date)
/s/ Jon P. Newton
----------------------------
(Signature)
Jon P. Newton
----------------------------
(Name)
Astro Acquisition Corp.
October 28, 1997
----------------------------
(Date)
/s/ Dwight L. Cramer
----------------------------
(Signature)
Dwight L. Cramer
----------------------------
(Name)
Western National Corporation
<PAGE>
EXHIBIT (B)(2)
Confidential
DISCUSSION MATERIALS PREPARED FOR
THE SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS
REGARDING
PROJECT ASTRO
SEPTEMBER 11, 1997
<PAGE>
Confidential
TABLE OF CONTENTS
1 COMPANY PROFILE - ASTRO
2 PUBLIC MARKET ANALYSIS - ASTRO
3 SUMMARY OF RECENT ANALYST COMMENTS - ASTRO
4 VALUATION ANALYSIS - ASTRO
5 COMPANY PROFILE - JETSON
6 SUMMARY OF RECENT ANALYST COMMENTS - JETSON
7 VALUATION ANALYSIS - JETSON
8 TRANSACTION ANALYSIS - JETSON
9 ILLUSTRATIVE COLLAR STRUCTURES
1
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COMPANY PROFILE - ASTRO
2
<PAGE>
PROFILE OF ASTRO
Astro is the leading provider of fixed annuities sold through financial
institutions.
. Astro was organized in October 1993.
. The Company completed an initial public offering at a price of $12.00 in
February, 1994 in which 52% of the Company was sold to the public.
. By developing a proprietary marketing strategy focused on the sale of fixed
annuities through the bank distribution market, the new management team has
repositioned the Company to become a leader in the fixed annuity market.
- Innovative strategy that enables banks to serve as sub-advisors on the
investments supporting their customers' annuities.
- #1 financial institution fixed annuity market up from #6 in 1995 and
#10 in 1994.
. GAAP equity of $970.5 million as of June 30, 1997.
. Statutory capital and surplus of $596.9 million as of June 30, 1997.
. Market capitalization of $2.0 billion as of September 10, 1997.
- Public float of approximately $1.1 billion (53.8%).
- Jetson owns 46.2% which was purchased in two transactions at an average
price of $12.61.
- Director and executive officer ownership of 2.8%.
. "A" A.M. Best rating; "AA-" S&P claims paying ability rating (reflects a
one level upgrade in September 1996, from "A+" (Good)).
3
<PAGE>
PROFILE OF ASTRO
Strengths
. A leader in the sale of tax deferred annuities.
. Favorable demographics.
. Proprietary financial institutions program.
. #1 provider of fixed annuities through financial institutions.
. Strong reputation in the market place.
. Experienced management team.
. Favorable withdrawal protection.
. Low cost producer.
Concerns
. Heavy concentration on a single product line (87% SPDA's).
. Heavy concentration on single distribution channel (financial
institutions - 82%).
. Heavy concentration on one account (First Union - 37% of total, 45% of
financial institutions).
. Need for increased financial strength / rating to achieve and support
increased growth.
. Competitive environment with limited growth.
. Regulatory environment.
4
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ASTRO - PRODUCTION BY LINE/DISTRIBUTION
CHANNEL
<TABLE>
<CAPTION>
TOTAL PREMIUM PRODUCTION BY PRODUCT
($ in millions)
1993 1994 1995 1996 1997E\\(1)\\
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SPDA $404 $616 $560 $1,420 $1,942
Variable Annuity 0 0 0 6 18
FPDA 90 81 92 68 54
Specialty 69 55 68 132 173
- --------------------------------------------------------------------------------------------------------------------
Total $563 $752 $720 $1,626 $2,187
- --------------------------------------------------------------------------------------------------------------------
<CAPTION>
TOTAL PREMIUM PRODUCTION BY DISTRIBUTION CHANNEL
($ in millions)
1993 1994 1995 1996 1997E\\(1)\\
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Financial Institutions - Proprietary $0 $0 $37 $890 $1,438
Financial Institutions - Retail 407 556 453 447 414
PPGA 107 142 156 148 162
Specialty 49 54 68 134 173
Direct 0 0 6 7 7
- --------------------------------------------------------------------------------------------------------------------
Total $563 $752 $720 $1,626 $2,187
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimates based on annualized six month results.
5
<PAGE>
ASTRO - FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
($ in millions) FOR THE YEARS ENDED FOR THE SIX MONTHS
DECEMBER 31, ENDED JUNE 30,
---------------------------------------------- ----------------------
Income Statement 1994 1995 1996 1996 1997
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues:
Insurance Policy Income $27.4 $29.1 $92.8 $38.0 $71.2
Net Insurance Income 637.4 662.9 703.1 343.8 391.5
Net Realized Gains (Losses) (52.9) (126.2) (2.3) (4.9) 3.7
---------------------------------------------------------------------
Total Revenues 615.6 569.6 800.6 376.9 466.4
- ------------------------------------------------------------------------------------------------------------------------------------
Benefits and Expenses:
Insurance Policy Benefits 104.7 108.3 109.6 55.9 53.9
Interest Expense on Annuities and Financial Products 344.2 364.9 381.7 184.5 205.8
Total Benefits and Expenses 501.5 560.8 647.7 307.2 372.9
---------------------------------------------------------------------
Income Before Income Taxes 114.1 8.8 152.9 69.7 93.5
Income Tax Expense 40.8 1.5 53.5 24.3 34.7
Net Income $73.3 $7.3 $99.4 $45.4 $58.8
- ------------------------------------------------------------------------------------------------------------------------------------
Operating Return on Equity(1) 13.6% 10.5% 13.2% 14.2% 13.0%
Per Common Share Data:
Net Income $1.18 $0.12 $1.53 $0.72 $0.83
Operating Earnings 1.50 1.45 1.56 0.77 0.83
Weighted Average Shares 62.1 62.5 64.9 62.8 70.5
- ------------------------------------------------------------------------------------------------------------------------------------
Balance Sheet
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investments $7,452.6 $8,845.2 $9,376.1 NA $10,287.1
Total Assets 8,321.2 9,312.2 10,095.5 NA 11,160.8
Insurance Liabilities 7,776.1 7,915.8 8,679.9 NA 9,307.0
Total Debt 147.7 147.8 148.0 NA 148.1
Shareholders' Equity 339.4 784.5 914.8 NA 970.5
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Excludes effect of SFAS 115. Six month periods are annualized returns.
6
<PAGE>
ASTRO - GAAP PROJECTED OPERATING DATA(1)
The following management assumptions assume 15%, 20% and 25% growth rates.
SUMMARY FINANCIAL INFORMATION
($ in millions, except per share data)
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31,
--------------------------------------------------------------------------------------
1996(2) 1997 1998 1999 2000
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
15% Growth Rate
Total Premiums $1,818 $2,174 $2,506 $2,876 $3,302
Operating EPS 1.56 1.75 1.99 2.28 2.67
EPS Growth 7.6% 12.2% 13.7% 14.6% 17.1%
- ----------------------------------------------------------------------------------------------------------------------------
20% Growth Rate
Total Premiums $1,818 $2,174 $2,610 $3,121 $3,737
Operating EPS 1.56 1.75 2.00 2.31 2.74
EPS Growth 7.6% 12.2% 14.3% 15.5% 18.6%
- ----------------------------------------------------------------------------------------------------------------------------
25% Growth Rate
Total Premiums $1,818 $2,174 $2,716 $3,382 $4,218
Operating EPS 1.56 1.75 2.01 2.34 2.82
EPS Growth 7.6% 12.2% 14.9% 16.4% 20.5%
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Assumptions provided by Astro.
(2) Actual performance.
7
<PAGE>
RATIONALE FOR A SALE
. Rating agency upgrade would significantly improve competitive position.
. Larger capital base to support new business.
. Diversification of earnings.
. Hedge against further erosion of Glass Steagall.
. Ability to capitalize on value, while Company maintains its competitive
advantage.
. Potential cost synergies from merger.
. Ability to offer full range of products to existing policyholders.
. Growth in near term is likely, long-term is more uncertain.
------------------------------
8
<PAGE>
PUBLIC MARKET ANALYSIS - ASTRO
9
<PAGE>
STOCK PRICE PERFORMANCE - IPO TO PRESENT
Astro's stock price has appreciated at over a 25% compound annual rate since
its IPO.
WEEKLY FROM FEBRUARY 18, 1994 - SEPTEMBER 5, 1997
[LINE GRAPH APPEARS HERE]
Low Price on 11/19/94 - $9.75
High price on 7/10/97 - $28.88
(1) 3/18/94 - 3/18/94 - IPO of 32.4 million shares at $12.00 per share.
(2) 12/16/94 - Jetson acquires 40% of common stock from Conseco at $22.00 per
share.
(3) 9/6/96 - Jetson purchases 7.3 million shares increasing ownership by 6.2%
for $17.92 per share.
10
<PAGE>
INDEXED PRICE PERFORMANCE - IPO TO PRESENT
Astro's stock price has lagged the comparable index since its IPO.
WEEKLY FROM FEBRUARY 18, 1994 - SEPTEMBER 5, 1997
[LINE GRAPH APPEARS HERE]
*Comparable Companies include: American Annuity Group, Inc., Liberty Financial
Companies, Inc., Presidential Life Corporation and SunAmerica, Inc. Indexed
prices are equal weighted.
11
<PAGE>
ASTRO HISTORICAL PRICE/VOLUME ANALYSIS/(1)/
Astro's stock has recently shown a significant increase in price and trading
volume.
[BAR GRAPH APPEARS HERE]
<TABLE>
<S> <C> <C> <C> <C>
Average Share Price $12.75 $12.50 $17.75 $25.69
Average Daily Shares Traded 289,519 115,912 91,047 120,470
Weighted Average 62,300,000 62,700,000 70,100,000 70,600,000
Shares Outstanding
</TABLE>
(1) Graph shows Astro's high and low share price.
12
<PAGE>
PUBLIC COMPANY COMPARABLE ANALYSIS
<TABLE>
<CAPTION>
Price EPS(1) Price/Earnings(1)
------------------------------------------------- Price to Div Proj. EPS Proj.
9/10/97 1997E 1998E 1997E 1998E Book Value Yield Growth ROE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Astro $28.13 $1.75 $2.00 16.1x 14.1x 2.02x 0.6% 14.3% 12.6%
American Annuity Group $21.75 $1.55 $1.70 14.0x 12.8x 1.94 0.4% 9.7% 13.8%
Liberty Financial Cos., Inc. 50.75 3.61 4.00 14.1 12.7 1.33 1.2 10.8 9.5
Presidential Life Corp. 18.88 1.23 1.38 15.3 13.7 1.38 1.1 12.2 9.0
SunAmerica, Inc. 36.25 1.85 2.19 19.6 16.6 3.42 0.7 18.4 17.5
Adjusted Mean(2) 14.7x 13.2x 1.66x 0.9% 11.5% 11.6%
Mean 15.8 13.9 2.02 0.8 12.8 12.4
Low 14.0 12.7 1.33 0.4 9.7 9.0
High 19.6 16.6 3.42 1.2 18.4 17.5
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Management estimates for 1997 and 1998 for Astro. IBES earnings estimates
for 1997 and 1998 for peers.
(2) Excludes Astro, low and high
13
<PAGE>
ANALYSIS OF ASTRO'S SHAREHOLDER PROFILE
<TABLE>
<CAPTION>
25 LARGEST INSTITUTIONAL HOLDERS OF ASTRO 25 LARGEST INSTITUTIONAL HOLDERS OF COMPARABLE COMPANIES
Astro Comparable Comparable Astro
Institution(1) Holdings Holdings(2) Institution(1) Holdings Holdings
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Jetson $897,631 $7,649 American Financial Group Inc. $759,678 $0
Prudential Ins. Co. 108,713 12,445 Morgan J P & Co Inc. 267,503 0
Firstar Corporation 77,019 0 Fidelity Mgmt & Res. Corp. 209,538 2,815
Liberty Investment Mgmt. 71,499 0 Mackay Shields Financial 173,100 0
Pioneering Mgmt. Corp. 58,287 16,393 Davis Selected Advisors LP 138,890 0
Dietche & Field Advs. Inc. 55,053 0 Fiduciary Trust Co. Intl. 134,418 0
Boston Ptnrs Asset Mgmt. 44,684 311 Morgan Stanley Dean Witter 132,288 1,171
Mellon Bank Corporation 43,680 86,003 Kr Capital Advisors Inc. 126,391 0
Janus Capital Corp. 35,708 22,735 Nicholas Co. 120,572 0
Harvard College 25,784 2,495 Aeltus Investment Mgmt. 113,730 0
Schroder Capital Mgmt. Inc. 23,694 22,898 Putnam Investment Mgmt. 101,393 0
Glickenhaus & Co. 23,666 0 Barclays Bank Plc 96,547 15,053
Neuberger & Berman 19,819 1,815 Mellon Bank Corporation 86,003 43,680
Waddell & Reed Inc. 19,513 11,044 Harbor Capital Mgmt Co. 81,836 0
College Retire Equities 16,028 62,786 Nicholas-Applegate Cap. 76,179 0
Zurich Kemper Invts. Inc. 15,889 0 Value Line Inc. 74,078 8,446
Barclays Bank Plc 15,053 96,547 Bankers Trust N Y Corp. 64,187 6,188
Skyline Asset Mgmt. 14,579 0 College Retire Equities 62,786 16,028
Ardsley Partners 14,495 0 Mass Mutual Life Insurance 59,370 0
Travelers Inc. 13,659 30,456 Franklin Resources Inc. 52,612 6,746
Anchor Capital Advisors 11,708 496 Calif. State Teachers Ret. 52,561 4,795
Invesco Funds Group Inc. 11,150 43,316 Aim Mgmt. Group Inc. 51,127 1,673
Gray Seifert & Company 8,613 10,585 Sirach Capital Mgmt Inc. 49,080 0
Value Line Inc. 8,446 74,078 American Century Cos. 45,686 0
Strong Capital Mgmt. Inc. 8,446 21,442 Invesco Funds Grp Inc. 43,316 11,150
</TABLE>
(1) Institutions required to make a 13F filing.
(2) Comparable companies include American Annuity Group, Inc., Liberty Financial
Cos., Inc., Presidential Life Corporation and SunAmerica, Inc.
14
<PAGE>
ANALYSIS OF ASTRO'S SHAREHOLDER PROFILE OVER TIME
<TABLE>
<CAPTION>
Owner Name 6/30/97 3/31/97 12/31/96 9/30/96 6/30/96 3/31/96 12/31/95
- --------------------------------------------------------------------------------------------------
Price At End Of Period $26.81 $23.38 $19.25 $18.63 $18.38 $16.25 $16.13
- --------------------------------------------------------------------------------------------------
(In Thousands of Shares)
<S> <C> <C> <C> <C> <C> <C> <C>
American General Corp 32,202 24,948 24,948 24,948 24,948 24,948 24,948
Prudential Ins Co/Amer 3,900 3,895 4,114 4,192 4,226 4,845 5,607
Firstar Corporation 2,763 2,693 2,533 1,483 1,361 1,269 682
Pioneering Mgmt Corp 2,091 2,127 2,339 3,494 3,498 3,498 2,133
Dietche & Field Advs Inc 1,975 2,222 2,629 3,235 3,328 3,393 3,445
Boston Ptnrs Asset Mgmt 1,603 1,394 1,669 1,167 869 158 157
Mellon Bank Corporation 1,567 1,499 1,477 1,388 1,308 1,083 989
Harvard College 925 1,160 0 0 0 200 0
Schroder Cap Mgmt Inc 850 872 860 765 765 757 504
Neuberger & Berman 711 858 951 918 913 913 919
College Retire Equities 575 577 455 408 144 140 8
Zurich Kemper Invts Inc 570 639 617 617 517 517 521
Skyline Asset Mgmt Lp 523 0 0 336 0 0 0
Ardsley Partners 520 183 0 0 0 0 0
Travelers Inc 490 487 550 528 515 437 404
Anchor Capital Advisors 420 428 443 0 0 0 0
Gray Seifert & Company 309 304 0 0 0 0 0
Value Line Inc. 303 100 0 0 0 0 0
Bessemer Trust Company 301 299 235 0 0 0 0
University Of Texas Invt 288 288 279 204 204 204 167
Ubs Asset Mgmt Ny Inc 288 288 506 506 503 596 809
Mcglinn Capital Mgmt 280 314 269 239 279 359 256
State Street Corp 257 268 330 333 286 132 108
Cumberland Associates 250 284 319 445 450 450 685
Franklin Resources Inc 242 272 347 351 346 0 0
Gw Capital Inc 235 305 305 225 335 438 443
Bessemer Trust Co N A 223 199 176 0 0 0 0
Bankers Trust N Y Corp 222 381 82 48 126 127 93
Phoenix Home Life Mutual 206 206 288 0 0 0 0
Aegon Usa Invt Mgmt Inc 205 216 564 0 0 0 0
Hancock John Advisers 160 160 75 75 75 75 75
Texas Teacher Retirm Sys 140 205 305 305 255 140 0
Vanguard Group Inc 128 119 0 0 0 0 0
Tudor Group Holdings 127 0 0 0 0 0 0
Pinnacle Associates Ltd 127 132 191 197 206 0 222
Morgan Asset Mgmt Inc 122 133 149 0 0 0 0
Weiss Peck & Greer 110 15 356 411 415 412 517
<CAPTION>
Owner Name 9/30/95 6/30/95 3/31/95 12/31/94 9/30/94 6/30/94 3/31/94
- --------------------------------------------------------------------------------------------------
Price At End Of Period $13.75 $12.38 $12.50 $12.88 $13.38 $11.88 $12.75
- --------------------------------------------------------------------------------------------------
(In Thousands of Shares)
<S> <C> <C> <C> <C> <C> <C> <C>
American General Corp 24,948 24,948 24,948 24,948 0 0 0
Prudential Ins Co/Amer 5,746 5,872 5,580 5,398 2,960 2,886 1,959
Firstar Corporation 0 0 0 3 3 0 0
Pioneering Mgmt Corp 1,889 1,208 0 0 0 0 0
Dietche & Field Advs Inc 0 890 1,750 2,110 1,900 1,500 1,500
Boston Ptnrs Asset Mgmt 0 0 0 0 0 0 0
Mellon Bank Corporation 999 276 723 470 620 555 434
Harvard College 27 0 0 0 0 0 0
Schroder Cap Mgmt Inc 0 0 0 0 0 0 0
Neuberger & Berman 701 709 627 562 544 495 0
College Retire Equities 0 0 0 141 208 250 250
Zurich Kemper Invts Inc 605 1,042 1,281 0 0 2,626 2,726
Skyline Asset Mgmt Lp 0 0 0 0 0 0 0
Ardsley Partners 0 0 0 0 0 0 0
Travelers Inc 441 402 478 608 980 6 0
Anchor Capital Advisors 0 0 0 0 0 0 0
Gray Seifert & Company 443 456 0 351 155 155 150
Value Line Inc. 0 0 0 0 0 0 0
Bessemer Trust Company 0 0 8 8 7 7 0
University Of Texas Invt 0 0 0 0 0 0 0
Ubs Asset Mgmt Ny Inc 1,041 941 1,288 976 931 786 786
Mcglinn Capital Mgmt 45 53 0 0 0 0 0
State Street Corp 104 157 138 151 166 101 0
Cumberland Associates 0 0 0 0 0 99 100
Franklin Resources Inc 0 0 0 0 0 0 0
Gw Capital Inc 0 0 0 0 0 0 0
Bessemer Trust Co N A 0 0 0 0 0 0 0
Bankers Trust N Y Corp 0 0 0 0 0 0 0
Phoenix Home Life Mutual 0 0 0 0 0 0 0
Aegon Usa Invt Mgmt Inc 4 2 0 0 0 0 0
Hancock John Advisers 60 20 0 0 0 0 0
Texas Teacher Retirm Sys 0 0 0 0 0 0 0
Vanguard Group Inc 0 0 0 0 0 0 0
Tudor Group Holdings 0 0 0 0 0 0 0
Pinnacle Associates Ltd 210 210 96 1 1 0 0
Morgan Asset Mgmt Inc 0 0 0 0 0 0 0
Weiss Peck & Greer 517 521 8 10 438 385 405
</TABLE>
15
<PAGE>
ANALYSIS OF ASTRO'S SHAREHOLDER PROFILE OVER TIME (CONT'D)
<TABLE>
<CAPTION>
Owner Name 6/30/97 3/31/97 12/31/96 9/30/96 6/30/96 3/31/96 12/31/95
- --------------------------------------------------------------------------------------------------
Price At End Of Period $26.81 $23.38 $19.25 $18.63 $18.38 $16.25 $16.13
- --------------------------------------------------------------------------------------------------
(In Thousands of Shares)
<S> <C> <C> <C> <C> <C> <C> <C>
ANB Investment Mgmt & Tr 106 107 108 108 102 87 75
Neuberger & Berm Inst Asst 104 115 134 134 134 134 132
Barnett Capital Advisors 101 0 0 0 0 0 0
Fidelity Mgmt & Res Corp 101 120 327 258 354 387 476
Painewebber Group Inc 79 83 23 0 0 0 1
Virginia Retirement Sys 76 76 76 0 0 0 0
Lincoln Capital Mgmt Co 72 0 25 25 0 0 0
Jenswold King & Assocs. 66 66 527 948 972 994 1,029
Royal London Mutual Ins 65 65 65 65 65 65 65
Frontier Capital Mgmt Co 65 42 0 0 0 0 0
Aim Mgmt Group Inc 60 55 55 10 4 0 0
Westport Asset Mgmt Inc 57 57 57 0 58 58 58
Bessemer Trust Co/Fla 56 48 37 0 0 0 0
U S West Inc 53 48 48 48 0 0 0
Standish Ayer & Wood Inc 52 48 29 0 0 0 0
Augusta Mgmt Llc 50 0 0 0 0 0 0
Burnham Asset Mgmt Corp 45 46 51 52 39 31 0
Morgan Stanley D Witter 42 0 0 0 24 10 14
Lasalle Natl Trust N A 42 49 45 34 22 22 14
Martin Currie Invt Mgmt 35 35 35 0 0 0 0
Aid Assoc For Lutherans 34 28 25 20 15 10 6
Russell Frank Co Inc 33 26 26 0 0 0 0
Jacobs Levy Equity Mgmt 33 26 26 0 0 0 0
Citicorp 28 0 28 28 28 28 28
Charles Schwab Invt Mgmt 28 28 10 10 10 10 10
Grantham Mayo Van Otter 27 31 12 0 0 0 0
Caxton Associates Llc 25 0 0 0 0 0 0
Prudential Secs. Inc. 24 29 27 0 0 0 0
First Union Corporation 24 24 24 24 24 24 0
Nationwide Advisory Svcs 20 15 0 0 0 0 0
Tocqueville Asset Mgmt 19 95 145 161 155 86 75
Fleet Finl Group Inc 16 16 18 0 128 0 0
Comerica Inc 16 16 13 10 10 0 30
M&G Investment Mgmt Ltd 15 10 0 0 0 0 0
Natl Westminster Bk Plc 14 0 0 0 0 0 0
Renaissance Technologies 14 0 0 0 0 0 0
Hartford Fire Insurance 12 21 25 15 0 0 0
Compass Bancshares Inc 10 0 0 0 0 0 0
<CAPTION>
Owner Name 9/30/95 6/30/95 3/31/95 12/31/94 9/30/94 6/30/94 3/31/94
- --------------------------------------------------------------------------------------------------
Price At End Of Period $13.75 $12.38 $12.50 $12.88 $13.38 $11.88 $12.75
- --------------------------------------------------------------------------------------------------
(In Thousands of Shares)
<S> <C> <C> <C> <C> <C> <C> <C>
ANB Investment Mgmt & Tr 0 0 0 0 0 0 0
Neuberger & Berm Inst Asst 122 122 112 133 163 92 0
Barnett Capital Advisors 432 480 478 426 414 1,048 1,062
Fidelity Mgmt & Res Corp 10 0 0 0 0 0 0
Painewebber Group Inc 1 1 1 1 1 0 0
Virginia Retirement Sys 0 0 0 0 0 0 0
Lincoln Capital Mgmt Co 0 0 0 0 44 44 44
Jenswold King & Assocs. 942 805 418 415 398 0 0
Royal London Mutual Ins 65 65 65 185 185 185 185
Frontier Capital Mgmt Co 17 64 92 90 0 74 0
Aim Mgmt Group Inc 0 0 0 0 0 0 120
Westport Asset Mgmt Inc 58 58 46 0 0 0 0
Bessemer Trust Co/Fla 0 0 0 0 0 0 0
U S West Inc 0 0 0 0 0 0 0
Standish Ayer & Wood Inc 0 0 0 0 0 0 0
Augusta Mgmt Llc 0 0 0 0 0 0 0
Burnham Asset Mgmt Corp 1 0 0 0 0 0 0
Morgan Stanley D Witter 0 0 0 0 0 0 0
Lasalle Natl Trust N A 14 12 56 59 39 0 0
Martin Currie Invt Mgmt 0 0 0 0 0 0 0
Aid Assoc For Lutherans 0 0 0 0 0 0 0
Russell Frank Co Inc 0 0 0 0 0 0 0
Jacobs Levy Equity Mgmt 0 32 32 104 0 0 0
Citicorp 4 0 0 0 0 0 0
Charles Schwab Invt Mgmt 0 0 314 358 332 0 0
Grantham Mayo Van Otter 0 0 0 0 0 0 0
Caxton Associates Llc 10 0 0 0 0 0 0
Prudential Secs. Inc. 0 0 0 0 0 0 28
First Union Corporation 530 0 0 0 0 0 0
Nationwide Advisory Svcs 0 0 0 0 0 0 0
Tocqueville Asset Mgmt 72 62 53 15 0 0 0
Fleet Finl Group Inc 101 81 81 81 51 0 0
Comerica Inc 0 0 0 0 0 0 0
M&G Investment Mgmt Ltd 0 0 55 55 55 0 0
Natl Westminster Bk Plc 0 0 0 0 0 0 0
Renaissance Technologies 0 0 0 0 0 0 0
Hartford Fire Insurance 0 0 0 0 0 0 0
Compass Bancshares Inc 0 0 0 0 0 20 20
</TABLE>
16
<PAGE>
ANALYSIS OF ASTRO'S SHAREHOLDER PROFILE OVER TIME (CONT'D)
<TABLE>
<CAPTION>
Owner Name 6/30/97 3/31/97 12/31/96 9/30/96 6/30/96 3/31/96 12/31/95
- --------------------------------------------------------------------------------------------------
Price At End Of Period $26.81 $23.38 $19.25 $18.63 $18.38 $16.25 $16.13
- --------------------------------------------------------------------------------------------------
(In Thousands of Shares)
<S> <C> <C> <C> <C> <C> <C> <C>
Breen Daniel & Co L P 9 9 0 0 0 0 0
Aig Intl Mgmt Co Inc 9 0 0 0 0 0 0
United States Trust/N Y 7 7 7 6 6 6 0
Teachers Advisors Inc 5 5 4 3 2 2 0
Eagle Asset Mgmt Inc 2 2 2 2 2 2 2
Advest Group Inc 2 0 0 0 0 0 0
Norwest Corporation 1 1 1 1 1 0 0
Janus Capital Corp 0 1,281 0 0 0 0 11
Glickenhaus & Co. 0 849 1,075 1,023 1,067 1,091 1,116
Waddell & Reed Inc 0 700 650 0 0 0 0
Barclays Bank Plc 0 540 465 469 361 0 0
Invesco Funds Grp Inc 0 400 0 0 0 0 0
Mass Mutual Life Insur 0 373 0 0 0 0 0
Strong Capital Mgmt Inc 0 303 0 0 0 0 0
Invista Capital Mgmt Inc 0 199 0 0 0 0 0
Calif State Teachers Ret 0 172 146 0 22 16 16
New York St Common Ret. 0 156 151 122 122 122 80
Turner Invt Partners Inc 0 117 0 0 0 0 0
Kingdon Capital Mgmt 0 100 300 300 106 0 0
World Asset Management 0 65 59 56 56 31 30
Gw Capital Mgmt Inc 0 42 0 0 0 0 3
Marshall & Ilsley Corp 0 35 0 0 0 0 0
Equitable Companies Inc 0 31 31 31 35 35 35
Lasalle Street Cap Mgmt 0 24 41 0 0 0 0
Investment Advisory Svcs 0 18 71 70 77 74 90
Essex Investment Mgmt Co 0 17 0 0 0 0 0
Banc One Corporation 0 12 0 0 0 150 235
Sanford C Bernstein & Co 0 12 0 269 672 847 836
First Security Corp/Utah 0 6 0 0 0 0 0
Mercantile Banc/Missouri 0 2 0 0 0 0 0
Wells Fargo & Company 0 2 2 0 0 0 0
Pittenger & Anderson 0 1 1 0 0 0 0
Liberty Investment Mgmt 0 0 2,565 2,562 2,592 2,651 2,770
Rainier Invt Mgmt Inc 0 0 533 354 176 0 0
Babson David L & Co 0 0 363 362 358 344 0
Scudder Stevens & Clark 0 0 161 176 120 0 30
First Chicago Nbd Invt 0 0 120 120 120 60 60
Aal Capital Mgmt Corp 0 0 113 0 0 0 0
<CAPTION>
Owner Name 9/30/95 6/30/95 3/31/95 12/31/94 9/30/94 6/30/94 3/31/94
- --------------------------------------------------------------------------------------------------
Price At End Of Period $13.75 $12.38 $12.50 $12.88 $13.38 $11.88 $12.75
- --------------------------------------------------------------------------------------------------
(In Thousands of Shares)
<S> <C> <C> <C> <C> <C> <C> <C>
Breen Daniel & Co L P 0 0 0 0 1 1 0
Aig Intl Mgmt Co Inc 0 0 0 0 0 200 200
United States Trust/N Y 11 0 0 0 0 0 0
Teachers Advisors Inc 0 0 0 0 0 0 0
Eagle Asset Mgmt Inc 156 0 100 0 0 0 0
Advest Group Inc 0 0 0 0 0 0 0
Norwest Corporation 0 0 0 0 0 0 0
Janus Capital Corp 0 0 0 0 0 0 0
Glickenhaus & Co. 0 0 0 0 0 0 0
Waddell & Reed Inc 0 0 0 0 0 0 0
Barclays Bank Plc 0 0 0 0 0 0 0
Invesco Funds Grp Inc 0 0 0 0 0 0 0
Mass Mutual Life Insur 0 0 0 0 0 0 0
Strong Capital Mgmt Inc 0 0 0 0 0 0 0
Invista Capital Mgmt Inc 0 0 0 0 0 0 0
Calif State Teachers Ret 0 0 0 0 0 0 0
New York St Common Ret. 80 80 80 80 0 0 0
Turner Invt Partners Inc 0 0 0 0 115 0 0
Kingdon Capital Mgmt 0 0 0 0 65 0 0
World Asset Management 30 30 0 0 0 0 0
Gw Capital Mgmt Inc 0 0 0 0 0 0 0
Marshall & Ilsley Corp 0 0 0 0 0 0 0
Equitable Companies Inc 0 0 0 0 0 0 0
Lasalle Street Cap Mgmt 0 0 0 0 0 0 0
Investment Advisory Svcs 0 0 0 0 0 0 0
Essex Investment Mgmt Co 857 1,002 989 1,000 729 610 923
Banc One Corporation 6 0 0 0 0 0 0
Sanford C Bernstein & Co 335 0 0 0 0 0 0
First Security Corp/Utah 3 3 5 5 5 5 5
Mercantile Banc/Missouri 0 0 15 15 12 0 0
Wells Fargo & Company 0 0 0 0 0 0 0
Pittenger & Anderson 0 0 0 0 0 0 0
Liberty Investment Mgmt 3,030 3,250 3,342 2,268 879 1,093 636
Rainier Invt Mgmt Inc 0 0 0 0 0 0 0
Babson David L & Co 294 55 1 1 1 1 60
Scudder Stevens & Clark 57 65 80 0 900 1,025 1,025
First Chicago Nbd Invt 0 0 0 0 0 0 15
Aal Capital Mgmt Corp 0 0 0 0 0 0 0
</TABLE>
17
<PAGE>
ANALYSIS OF ASTRO'S SHAREHOLDER PROFILE OVER TIME (CONT'D)
<TABLE>
<CAPTION>
Owner Name 6/30/97 3/31/97 12/31/96 9/30/96 6/30/96 3/31/96 12/31/95
- --------------------------------------------------------------------------------------------------
Price At End Of Period $26.81 $23.38 $19.25 $18.63 $18.38 $16.25 $16.13
- --------------------------------------------------------------------------------------------------
(In Thousands of Shares)
<S> <C> <C> <C> <C> <C> <C> <C>
Morgan J P & Co Inc 0 0 100 100 0 0 0
Oppenheimer & Co L P 0 0 80 84 91 89 91
Panagora Asset Mgmt Inc 0 0 17 0 0 0 0
U S Bancorp 0 0 6 6 0 0 0
Nicholas-Applegate Cap. 0 0 0 148 270 0 0
Lynch & Mayer Inc 0 0 0 975 870 0 0
Lazard Freres & Co 0 0 0 663 1,230 1,350 1,378
Sound Shore Mgmt. Inc. 0 0 0 313 313 313 313
Delaware Management Co 0 0 0 17 16 0 0
Bank Of New York 0 0 0 6 6 7 6
Bank Of Tokyo Ltd 0 0 0 5 0 0 0
Bea Associates Inc 0 0 0 0 304 427 430
Fleet Trust Co N A 0 0 0 0 120 154 141
Tcw Group Inc 0 0 0 0 94 0 0
Northern Trust Corp 0 0 0 0 26 23 20
Reams Asset Mgmt Co Llc 0 0 0 0 20 330 441
Bzw Barclays Glbl Invts 0 0 0 0 0 369 366
Kirr Marbach & Company 0 0 0 0 0 159 248
First Chicago Nbd Corp 0 0 0 0 0 60 0
Hawaiian Trust Co Ltd 0 0 0 0 0 38 38
Keycorp 0 0 0 0 0 11 11
Crabbe Huson Group Inc 0 0 0 0 0 3 0
Bzw Barclays Glbl Fd Adv 0 0 0 0 0 3 2
Lehman Brothers Hldgs 0 0 0 0 0 1 1
Merrill Lynch & Co Inc 0 0 0 0 0 1 1
Maverick Capital Ltd 0 0 0 0 0 0 205
Mccullough Andrews & Capp. 0 0 0 0 0 0 139
General Motors Invt Mgmt 0 0 0 0 0 0 60
Warburg Pincus Counsellr 0 0 0 0 0 0 20
Zweig/Glaser Advisers 0 0 0 0 0 0 14
First Financial Svcs Grp 0 0 0 0 0 0 12
Amsouth Bancorporation 0 0 0 0 0 0 1
Deposit Guaranty Natl Bk 0 0 0 0 0 0 0
Credit Suisse Fst Boston 0 0 0 0 0 0 0
Ge Investment Corp 0 0 0 0 0 0 0
Boatmens Bancshares Inc 0 0 0 0 0 0 0
Garrison Keogh & Co Inc 0 0 0 0 0 0 0
Eighteen-38 Invt. Advs. 0 0 0 0 0 0 0
<CAPTION>
Owner Name 9/30/95 6/30/95 3/31/95 12/31/94 9/30/94 6/30/94 3/31/94
- --------------------------------------------------------------------------------------------------
Price At End Of Period $13.75 $12.38 $12.50 $12.88 $13.38 $11.88 $12.75
- --------------------------------------------------------------------------------------------------
(In Thousands of Shares)
<S> <C> <C> <C> <C> <C> <C> <C>
Morgan J P & Co Inc 0 0 0 0 0 0 0
Oppenheimer & Co L P 87 89 0 0 0 0 0
Panagora Asset Mgmt Inc 0 0 0 0 0 0 0
U S Bancorp 0 0 0 0 0 0 0
Nicholas-Applegate Cap. 0 0 0 0 0 0 0
Lynch & Mayer Inc 0 0 0 0 0 0 0
Lazard Freres & Co 1,164 1,144 383 0 0 0 0
Sound Shore Mgmt. Inc. 313 300 0 0 0 0 0
Delaware Management Co 0 0 0 24 14 0 15
Bank Of New York 0 0 0 0 0 0 0
Bank Of Tokyo Ltd 74 172 160 100 30 30 0
Bea Associates Inc 0 0 0 0 0 0 0
Fleet Trust Co N A 0 0 0 0 50 0 0
Tcw Group Inc 0 0 0 0 0 0 0
Northern Trust Corp 28 0 0 0 0 0 44
Reams Asset Mgmt Co Llc 500 364 0 0 0 0 0
Bzw Barclays Glbl Invts 16 16 15 9 9 9 0
Kirr Marbach & Company 248 249 0 0 0 0 0
First Chicago Nbd Corp 60 60 0 0 0 0 0
Hawaiian Trust Co Ltd 38 38 38 38 25 25 25
Keycorp 6 14 6 0 0 0 7
Crabbe Huson Group Inc 0 0 10 3 1 58 58
Bzw Barclays Glbl Fd Adv 348 287 313 283 273 257 0
Lehman Brothers Hldgs 0 0 0 0 0 0 0
Merrill Lynch & Co Inc 1 5 0 80 3 0 0
Maverick Capital Ltd 0 0 0 0 0 0 0
Mccullough Andrews & Capp. 139 0 0 0 0 0 0
General Motors Invt Mgmt 1,106 1,026 693 357 147 20 0
Warburg Pincus Counsellr 30 30 0 0 0 0 0
Zweig/Glaser Advisers 18 19 13 0 0 0 0
First Financial Svcs Grp 0 0 0 0 0 0 0
Amsouth Bancorporation 0 0 0 0 10 0 0
Deposit Guaranty Natl Bk 3,023 3,270 3,005 2,392 2,015 2,155 2,007
Credit Suisse Fst Boston 685 625 625 625 665 665 665
Ge Investment Corp 170 220 260 290 209 251 228
Boatmens Bancshares Inc 135 123 0 0 0 0 0
Garrison Keogh & Co Inc 42 0 0 0 0 0 0
Eighteen-38 Invt. Advs. 35 35 0 0 0 0 0
</TABLE>
18
<PAGE>
ANALYSIS OF ASTRO'S SHAREHOLDER PROFILE OVER TIME (CONT'D)
<TABLE>
<CAPTION>
Owner Name 6/30/97 3/31/97 12/31/96 9/30/96 6/30/96 3/31/96 12/31/95
- ---------- ------- ------- -------- ------- ------- ------- --------
(In Thousands of Shares)
<S> <C> <C> <C> <C> <C> <C> <C>
Chase Manhattan Corp 0 0 0 0 0 0 0
Columbia Management Co 0 0 0 0 0 0 0
Amvescap Plc 0 0 0 0 0 0 0
First Commercial Trust 0 0 0 0 0 0 0
Wells Fargo/Fst Interst. 0 0 0 0 0 0 0
Amoco Corporation 0 0 0 0 0 0 0
Nolan D Management Co 0 0 0 0 0 0 0
Rothschild/Pell Rudman 0 0 0 0 0 0 0
American Century Cos 0 0 0 0 0 0 0
Wilshire Assoc Inc 0 0 0 0 0 0 0
First Allmerica Finl Lfe 0 0 0 0 0 0 0
Chase Investment Counsel 0 0 0 0 0 0 0
Mount Vernon Assocs. Inc 0 0 0 0 0 0 0
Van Kampen Amer Capital 0 0 0 0 0 0 0
Numeric Investors L P 0 0 0 0 0 0 0
First Source Bank 0 0 0 0 0 0 0
One Valley Bank N A 0 0 0 0 0 0 0
Oak Value Capital Mgmt 0 0 0 0 0 0 0
National City Bk/No West 0 0 0 0 0 0 0
Northern Cap Mgmt Inc 0 0 0 0 0 0 0
Lgt Asset Management Inc 0 0 0 0 0 0 0
Security Management Co. 0 0 0 0 0 0 0
Soros Fund Management Co 0 0 0 0 0 0 0
Hsbc Holdings Plc 0 0 0 0 0 0 0
Hsbc Asset Mgmt Americas 0 0 0 0 0 0 0
Sunamerica Asset Mgmt 0 0 0 0 0 0 0
Miller Anderson & Sherrerd 0 0 0 0 0 0 0
Mitchell Hutchins Inst. 0 0 0 0 0 0 0
American Natl B&T/Chicag 0 0 0 0 0 0 0
Florida St Board/Admin. 0 0 0 0 0 0 0
Nippon Life Insurance Co 0 0 0 0 0 0 0
- --------------------------------------------------------------------------------------------------
Total Holdings 57,956 55,374 57,476 57,038 57,268 55,803 54,954
Total Number Of Owners 89 105 94 76 78 76 80
Shares Outstanding (Millions) 62.51 62.44 62.35 62.35 62.35 62.35 62.35
Price At End Of Period $26.81 $23.38 $19.25 $18.63 $18.38 $16.25 $16.13
- --------------------------------------------------------------------------------------------------
<CAPTION>
Owner Name 9/30/95 6/30/95 3/31/95 12/31/94 9/30/94 6/30/94 3/31/94
- ---------- ------- ------- ------- -------- ------- ------- -------
(In Thousands of Shares)
<S> <C> <C> <C> <C> <C> <C> <C>
Chase Manhattan Corp 32 0 0 0 217 121 0
Columbia Management Co 30 30 30 30 0 30 30
Amvescap Plc 26 4 4 4 0 0 0
First Commercial Trust 12 12 0 0 0 0 0
Wells Fargo/Fst Interst. 11 12 11 110 170 581 581
Amoco Corporation 1 1 1 1 1 1 0
Nolan D Management Co 0 25 0 0 0 0 0
Rothschild/Pell Rudman 0 14 14 239 262 274 0
American Century Cos 0 9 0 0 0 0 0
Wilshire Assoc Inc 0 9 9 26 9 9 0
First Allmerica Finl Lfe 0 0 1,380 1,335 1,147 1,032 0
Chase Investment Counsel 0 0 165 13 0 0 0
Mount Vernon Assocs. Inc 0 0 39 40 40 40 40
Van Kampen Amer Capital 0 0 25 10 0 0 0
Numeric Investors L P 0 0 17 0 0 0 0
First Source Bank 0 0 10 0 0 0 0
One Valley Bank N A 0 0 1 5 5 0 5
Oak Value Capital Mgmt 0 0 0 22 0 0 0
National City Bk/No West 0 0 0 21 21 21 21
Northern Cap Mgmt Inc 0 0 0 0 1,159 1,187 1,175
Lgt Asset Management Inc 0 0 0 0 200 200 200
Security Management Co. 0 0 0 0 165 165 165
Soros Fund Management Co 0 0 0 0 145 0 0
Hsbc Holdings Plc 0 0 0 0 120 0 0
Hsbc Asset Mgmt Americas 0 0 0 0 120 0 0
Sunamerica Asset Mgmt 0 0 0 0 56 10 10
Miller Anderson & Sherrerd 0 0 0 0 44 0 0
Mitchell Hutchins Inst. 0 0 0 0 25 25 17
American Natl B&T/Chicag 0 0 0 0 20 20 20
Florida St Board/Admin. 0 0 0 0 10 10 84
Nippon Life Insurance Co 0 0 0 0 0 20 20
- --------------------------------------------------------------------------------------------------
Total Holdings 53,395 52,174 50,564 47,084 20,690 21,468 18,661
Total Number Of Owners 76 77 64 74 71 65 49
Shares Outstanding (Millions) 62.35 62.35 62.30 62.30 62.30 62.30 62.00
Price At End Of Period $13.75 $12.38 $12.50 $12.88 $13.38 $11.88 $12.75
- --------------------------------------------------------------------------------------------------
</TABLE>
19
<PAGE>
SUMMARY OF RECENT ANALYST COMMENTS -
ASTRO
20
<PAGE>
SUMMARY OF ANALYST ESTIMATES
The majority of analysts have a positive long-term outlook for the Company's
stock price, however, street estimates are above Astro's management's
estimates.
<TABLE>
<CAPTION>
Date Stock Price(1) Firm 1997E EPS 1998E EPS Recommendation
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C> <C>
6/27/97 $27.00 Dillon, Read $1.75 $2.05 Buy
2/7/97 21.50 Lehman Brothers 1.75 2.00 Neutral
3/19/97 24.75 Lehman Brothers 1.75 2.00 Neutral
5/8/97 26.25 Lehman Brothers 1.75 2.00 Neutral
6/17/97 27.00 Merrill Lynch 1.75 2.00 Long-Term Accumulate
7/22/97 27.50 Merrill Lynch 1.75 2.00 Long-Term Accumulate
3/4/97 25.00 Robinson-Humphrey 1.75 2.00 Long-Term Market Performer
4/10/97 24.88 Robinson-Humphrey 1.75 2.00 Long-Term Market Performer
5/1/97 26.13 Robinson-Humphrey 1.75 2.00 Long-Term Buy
7/21/97 27.63 Robinson-Humphrey 1.75 2.00 Attractive, Long-Term Buy
2/26/97 23.00 Schroder Wertheim 1.78 2.05 Accumulate
5/2/97 26.00 Schroder Wertheim 1.77 2.07 Accumulate
Mean: $1.75 2.01
Median 1.75 2.00
- ------------------------------------------------------------------------------------------------------------------------------------
Current (8/18/97) First Call Mean: $1.77 $2.07
Median 1.76 2.07
====================================================================================================================================
Company Estimate $1.75 $2.00
====================================================================================================================================
</TABLE>
(1) Represents the closing stock price at the indicated date.
21
<PAGE>
RESEARCH ANALYST'S VIEWS
<TABLE>
<CAPTION>
SCHRODER WERTHEIM LEHMAN BROTHERS DILLON, READ & CO., INC.
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Analyst(s) Andrew S. Kligerman Edward A. Spehar Harry Radovich
Robert P. Ryan
Latest Report May 2, 1997 May 8, 1997 June 27, 1997
Price $26 $26 1/2 $27
- ------------------------------------------------------------------------------------------------------------------------------------
1997 EPS, P/E $1.77 14.7x $1.75 15.0x $1.75 15.4x
1998 EPS, P/E $2.07 12.6x $2.00 13.1x $2.05 13.2x
12-month Price Target NA $25.00 $31.00
- ------------------------------------------------------------------------------------------------------------------------------------
Comments Jetson appears likely to Share price reflects Company's strong Relatively high probability that
acquire remainder of Astro fundamentals and believe it is fairly company will be acquired by Jetson
for at least $29 per share. valued. in near to intermediate term at
distinct premium to market price.
First quarter sales reached First quarter results largely were as
record levels, largely due expected; except for growth in Projecting strong sales gains and
to property fixed annuities. premiums and reserves exceeding their asset growth in 1998.
forecasts.
Increased confidence in sustainability
of favorable operating trends.
- ------------------------------------------------------------------------------------------------------------------------------------
Rating Accumulate Neutral Buy
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
22
<PAGE>
RESEARCH ANALYST'S VIEWS
<TABLE>
<CAPTION>
ROBINSON-HUMPHREY MERRILL LYNCH
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Analyst(s) David O. Lewis Edward A. Spehar
Louise Costikyan
Latest Report July 21, 1997 July 22, 1997
Price $27 5/8 $27 1/2
--------------------------------------------------------------------------------------------------------------------
1997 EPS, P/E $1.75 15.7x $1.75 15.7x
1998 EPS, P/E $2.00 13.8x $2.00 13.8x
12-month Price Target $31.00 NA
--------------------------------------------------------------------------------------------------------------------
Comments Believes Jetson will make move to Stock price fully reflects both solid
acquire 54% of Astro shares over next fundamentals and takeover speculation.
twelve months at price in excess of
$30 per share. Future sales outlook remains positive,
partially because company has entered
Expects acceleration in asset and into new selling agreement with a
earnings growth will continue in 1998. large bank (First Chicago NBD).
Management aggressively reduced crediting
rates on certain blocks of business. Net
impact on bottom line was favorable.
--------------------------------------------------------------------------------------------------------------------
Rating Attractive Long-Term Buy Long-Term Accumulate
--------------------------------------------------------------------------------------------------------------------
</TABLE>
23
<PAGE>
VALUATION ANALYSIS - ASTRO
24
<PAGE>
ASTRO VALUATION SUMMARY
($ in millions, except per share data)
<TABLE>
<CAPTION>
Per Share Valuation Range(1) Aggregate Equity Valuation Range
-------------------------------------------- -------------------------------------------
Low Mean Adj. Mean(2) High Low Mean Adj. Mean(2) High
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
GAAP
----
Comparable Public Companies(3) $21.74 $26.50 $24.15 $36.15 $1,553.6 $1,910.8 $1,961.1 $2,606.6
Comparable M&A Transactions(4) 12.29 21.52 23.12 46.36 886.0 1,551.6 1,667.5 3,343.3
GAAP Average 16.92 24.01 23.64 41.26 1,219.8 1,731.2 1,814.3 2,974.9
SAP
---
Comparable Public Companies(3) $13.74 $24.60 $23.24 $42.28 $990.5 $1,773.7 $1,656.0 $3,048.5
Comparable M&A Transactions(4) 4.61 12.16 13.09 25.13 332.5 877.0 943.7 1,812.0
SAP Average 9.17 18.38 18.16 33.70 661.5 1,325.3 1,299.8 2,430.2
Squeeze-Out Premiums Paid
-------------------------
Implied Valuation $29.40 $33.06 $33.12 $36.44 $2,051.1 $2,306.8 $2,310.8 $2,542.6
Adjusted Implied Valuation(5) 24.71 30.00 30.78 31.36 1,723.7 2,092.8 2,147.6 2,188.0
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Based on 69,769,338 shares outstanding and 2,340,850 options at an average
strike price of $12.50.
(2) Excludes high and low.
(3) Comparable companies include: American Annuity Group, Liberty Financial
Cos., Presidential Life and SunAmerica Inc.
(4) Includes 13 selected mergers and acquisitions of annuity companies from
1992 to the present.
(5) Based on $24.15 stock price as calculated from Adjusted Mean Valuation
based on comparable publicly-traded companies
25
<PAGE>
ASTRO VALUATION BASED ON SELECTED PUBLIC ANNUITY COMPANIES
($ in millions, except per share data)
<TABLE>
<CAPTION>
Multiples of Comparable
Public Annuity Companies(1) Implied Per Share Equity Valuation(2)
--------------------------------------- ----------------------------------------------------
Astro(3) Low Mean Adj. Mean(4) High Low Mean Adj. Mean(4) High
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
GAAP
----
LTM EPS $1.62 11.9x 15.4x 14.5x 20.8x $18.48 $23.71 $22.28 $31.81
1997E EPS(5) 1.75 14.0 15.8 14.7 19.6 24.24 27.17 25.38 33.69
1998E EPS(4) 2.00 12.7 13.9 13.2 16.6 25.11 27.53 26.18 32.64
6/30/97 BVPS 13.92 1.33 2.02 1.66 3.42 18.34 27.58 22.77 46.46
GAAP Average:
Per Share $21.54 $26.50 $24.15 $36.15
Aggregate $1,553.6 $1,910.8 $1,741.5 $2,606.6
SAP
---
1996 Net Operating Income $41.3 16.2x 29.1x 28.8x 42.8x $7.62 $15.01 $16.86 $22.81
12/31/96 Capital & Surplus 572.4 2.71 4.51 3.68 7.99 19.86 34.19 29.63 61.74
SAP Average:
Per Share $13.74 $24.60 $23.24 $42.28
Aggregate $990.5 $1,773.7 $1,676.0 $3,048.5
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Comparable companies include American Annuity Group, Liberty Financial
Cos., Presidential Life and SunAmerica Inc.
(2) Based on 69,769,338 shares outstanding and 2,340,850 options with an
average strike price of $12.50.
(3) Company assumptions.
(4) Excludes high and low.
(5) Based on mean IBES EPS estimates.
26
<PAGE>
ASTRO VALUATION BASED ON ANNUITY M&A TRANSACTIONS
($ in millions, except per share data)
<TABLE>
<CAPTION>
Multiples of Comparable M&A Transactions(1) Implied Equity Valuation(2)
-----------------------------------------------------------------------------------------------------
Astro Low Mean Adj. Mean(3) High Low Mean Adj. Mean(3) High
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
GAAP
----
LTM Operating Earnings $109.1 7.7x 16.2x 14.9x 36.6x $12.06 $24.91 $22.90 $55.78
6/30/97 Book Value 970.5 0.90 1.32 1.18 2.72 12.52 18.13 16.24 36.95
GAAP Average:
Per Share $12.29 $21.52 $19.57 $46.36
Aggregate $886.0 $1,551.6 $1,411.4 $3,343.3
SAP
---
1996 Net Operating Income $41.3 5.2x 20.0x 19.6x 38.1x $1.34 $9.78 $9.58 $20.15
12/31/96 Capital & Surplus 572.4 1.20 2.04 1.94 4.00 7.88 14.55 13.74 30.11
SAP Average:
Per Share $4.61 $12.16 $11.66 $25.13
Aggregate $332.5 $877.0 $840.9 $1,812.0
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Includes 13 selected mergers and acquisitions of annuity companies from 1992
to the present.
(2) Based on 69,769,338 shares outstanding and 2,340,850 options at an average
strike price of $12.50.
(3) Excludes high and low.
27
<PAGE>
COMPARABLE M&A TRANSACTION ANALYSIS
($ in millions)
<TABLE>
<CAPTION>
Equity Purchase Total Purchase
Price / Price /
----------------- -------------------
Equity GAAP GAAP SAP SAP Premiums Paid
Purchase Announced Net Opg. Book Net Capital & Prior to Announcement
-------------------------
Acquiror - Target Price Date Income Value Income Surplus 1 Day 1 Week 1 Month
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ING Group N.V. $2,200.0 Jul-97 19.0x 2.72x 29.6x 4.00x 18.5% 20.4% 21.7%
- Equitable of Iowa Cos.
GE Capital Corp. 1,800.0 Aug-96 15.3 1.46 31.3 3.26 NA NA NA
- First Colony Corp.
PennCorp Financial Group, Inc. 164.0 Feb-96 9.8 0.98 16.4 1.64 NA NA NA
- United Companies Life Insurance Co.
Jefferson Pilot Corp. 575.0 Dec-95 10.4 1.10 9.9 1.20 NA NA NA
- Alexander Hamilton Life Insurance
Company
GE Capital Corp. 960.0 Dec-95 12.4 1.20 19.4 2.10 NA NA NA
- Life Insurance Company of Virginia
SunAmerica Inc. 120.0 Dec-95 NA NA 12.6 1.70 NA NA NA
- CalFarm Life Insurance Co.
SunAmerica Inc. 172.5 Nov-95 NA NA NM 1.60 NA NA NA
- Ford Life Insurance Co.
AmVestors Financial Corp. 48.3 Sep-95 16.4 1.30 38.1 1.60 24.9 16.4 40.4
- Financial Benefit Group, Inc.
American Annuity Group, Inc. 105.6 May-95 16.0 0.90 12.9 2.50 1.3 1.3 10.3
- Laurential Capital Corp.
Conseco, Inc. 349.2 May-94 16.9 NM 17.3 2.40 5.2 24.5 41.0
- The Statesman Group, Inc.
GE Capital Corp. 550.0 Apr-93 17.6 0.90 23.2 1.30 NA NA NA
- United Pacific Life
GE Capital Corp. 471.0 Jan-93 36.6 NA 23.8 1.80 NA NA NA
- GNA Corporation
STI Group Inc. 470.0 Jun-92 7.7 1.30 5.2 1.42 NA NA NA
- Great American Life Insurance
Low 7.7x 0.90x 5.2x 1.20x 1.3% 1.3% 10.3%
Mean 16.2 1.32 20.0 2.04 12.5 15.6 28.4
Adjusted Mean(1) 14.9 1.18 19.6 1.94 11.9 18.4 31.1
High 36.6 2.72 38.1 4.00 24.9 24.5 41.0
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Excludes high and low.
28
<PAGE>
ASTRO VALUATION BASED ON PREMIUMS PAID IN
SELECTED SQUEEZE-OUT TRANSACTIONS
<TABLE>
<CAPTION>
Stock Price Premium Prior to Announcement Date
-----------------------------------------------------------------------------------
1 Day 1 Week 1 Month 3 Months 6 Months LTM LTM
-----------------------------------------------------------------------------------
9/9/97 9/3/97 8/10/97 6/10/97 3/10/97 Mean High
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Astro Stock Price $28.94 $28.50 $26.81 $26.88 $23.63 $23.00 $29.25
Cash Consideration(1)
Average 25.9% 30.5% 31.9% 35.0% 35.2% 33.8% 7.2%
Implied Valuation $36.43 $37.18 $35.35 $36.28 $31.93 $30.77 $31.36
Adj. Implied Valuation(2) 30.40 31.51 31.84 32.60 32.64 32.30 25.89
Stock Consideration(3)
Average 13.6% 21.7% 24.8% 17.6% 16.3% 13.7% (9.4)%
Implied Valuation $32.88 $34.69 $33.46 $31.61 $27.48 $26.15 $26.15
Adj. Implied Valuation(2) 27.44 29.39 30.14 28.41 28.10 27.46 21.89
All Deals
Average 22.2% 27.9% 29.8% 29.9% 29.6% 27.8% 2.3%
Implied Valuation $35.38 $36.44 $34.79 $34.90 $30.62 $29.40 $29.94
Adj. Implied Valuation(2) 29.52 30.88 31.34 31.36 31.30 30.87 24.71
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) 38 squeeze-out transactions from 1990 to present.
(2) Based on $24.15 stock price as calculated from Adjusted Mean Valuation
based on comparable publicly-traded companies (see page 26 of presentation).
(3) 16 squeeze-out transactions from 1990 to present.
29
<PAGE>
PREMIUMS PAID IN SELECTED SQUEEZE-OUTS
<TABLE>
<CAPTION>
Target Name / Date Price/ % Deal
Acquiror Name Annc. Transaction Terms Share Purch Value
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Acordia Inc / 6/2/97 Offer: $40 cash/sh com $40.00 33.2% $172.7
Anthem Inc
Enron Global Power 5/14/97 Offer: An amended $35 shs $35.00 NA $443.5
& Pipelines / com/sh com; $6.638
Enron Corp mil/options; originally $32
shs com/sh com
Florida East Coast 5/5/97 Offer: $102 cash/sh com $102.00 NA $428.4
Inds / St. Joe
Paper Co
Steck-Vaughn 4/16/97 Offer: $14 cash/sh com; $14.00 NA $37.9
Publishing Corp / plus $3.71 mil/options
Harcourt General
Inc
Fina Inc / 2/25/97 Offer: $60/Class A shs $60.00 NA $257.0
Petrofina SA com; $1 mil/options
Mafco Consolidated 1/21/97 Offer: $33.5 cash/sh com; $33.50 15.0% $116.8
Group / Mafco amended from $38.5 cash/sh
Holdings com
Zurich Reinsurance 1/13/97 Offer: $36 cash/sh com $36.00 NA $319.0
Centre / Zurich
Versicherungs
CGC Inc / USG Corp 10/24/96 Offer: $8.176 cash for $8.18 24.0% $66.9
each share not already
owned.
WCI Steel Inc / 10/10/96 Offer: $10.00 cash for $10.00 15.5% $56.5
Renco Group Inc each share not already
owned.
General Physics 9/26/97 Offer: .6 shs com/sh com; $5.10 48.0% $26.1
Corp / National amended from .54 shs com/sh
Patent Development com
Chemed Corp / 8/8/96 Offer: $41.00 cash for $41.00 42.0% $88.3
Roto-Rooter Inc each share not already
owned.
SyStemix Inc / 5/27/96 Offer: $19.50 cash for $19.50 26.8% $75.8
Novartis each share not already
owned.
<CAPTION>
Target Name / Stock Price Premium Cash/
---------------------------------------------------------------
Acquiror Name 6 Mos. 3 Mos. 1 Mo. 1 Week 1 Day LTM LTM Stock
Avg. High
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Acordia Inc / 35.0% 25.0% 26.0% 11.5% 12.7% 29.5% 10.3% Cash
Anthem Inc
Enron Global Power 25.0% 16.7% 23.9% 17.6% 15.7% 29.9% 13.8% Stock
& Pipelines /
Enron Corp
Florida East Coast 16.9% 8.1% 9.7% 16.6% 14.9% 15.7% 0.2% Cash
Inds / St. Joe
Paper Co
Steck-Vaughn 24.4% 25.8% 15.5% 24.4% 24.4% 23.4% (3.4%) Cash
Publishing Corp /
Harcourt General
Inc
Fina Inc / 17.6% 16.2% 21.5% 18.5% 19.7% 17.2% 8.1% Cash
Petrofina SA
Mafco Consolidated 52.3% 40.3% 27.6% 23.5% 23.5% 44.9% 9.4% Cash
Group / Mafco
Holdings
Zurich Reinsurance 15.7% 18.0% 11.6% 18.5% 17.1% 16.9% 9.9% Cash
Centre / Zurich
Versicherungs
CGC Inc / USG Corp 2.2% 25.8% 17.6% 16.8% 11.2% 15.1% 1.6% Cash
WCI Steel Inc / 110.5% 86.0% 73.9% 29.0% 17.6% 96.7% 17.6% Cash
Renco Group Inc
General Physics 45.7% 13.3% 36.0% 31.6% 16.6% 40.9% 13.3% Stock
Corp / National
Patent Development
Chemed Corp / 30.2% 24.2% 13.9% 12.3% 12.3% 23.8% (1.2%) Cash
Roto-Rooter Inc
SyStemix Inc / 30.0% 44.4% 51.5% 62.5% 77.3% 41.7% 16.4% Cash
Novartis
</TABLE>
30
<PAGE>
PREMIUMS PAID IN SELECTED SQUEEZE-OUTS (CONT'D)
<TABLE>
<CAPTION>
Stock Price Premium
Target Name / Date Price/ % Deal ----------------------------------
Acquiror Name Annc. Transaction Terms Share Purch Value 6 Mos. 3 Mos. 1 Mo. 1 Week
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SCOR US Corp / 9/26/95 Original Offer: $14.00 in $15.25 19.1% $55.4 86.2% 67.1% 32.6% 35.6%
Societe cash for each share not
Commerciale de already owned. Revised
Reassurance offer: $15.25 for each
share not already owned.
REN Corp / Gambro 9/13/95 Original Offer: $18 cash $20.00 47.0% $178.3 45.5% 35.6% 35.6% 20.3%
SA for each share not already
owned. Revised offer: $20
cash for each share not
already owned.
BIC Corp / Societe 5/19/95 Original Offer: $36.50 $40.50 22.9% $218.9 46.6% 29.1% 30.1% 12.5%
BIC cash for each share not
already owned. Revised
offer: $40.50 cash for
each share not already
owned.
Club Mediterranee 4/5/95 Original Offer: $26.25 $32.00 29.2% $135.8 43.0% 36.2% 43.8% 39.9%
/ Club Med Inc. cash for each share not
already owned. Revised
offer: $32 cash for each
share not already owned.
Fleet Mortgage 12/28/94 Offer: $20.00 cash for $20.00 19.0% $188.1 45.5% 4.6% 23.1% 21.2%
Group Inc / Fleet each share not already
Financial Group Inc owned
Pacific Telecom 11/2/94 Offer: $28.00 cash for $28.00 13.0% $148.4 17.9% 33.3% 13.1% 15.5%
Inc / PacifiCorp each share not already
owned.
Contel Cellular 9/8/94 Offer: $22.50 cash for $22.50 10.0% $224.0 38.5% 36.4% 23.3% 24.1%
Inc. / GTE Corp. each share not already owned
Castle & Cooke 8/24/94 Earlier, Dole completed a $15.75 17.2% $81.5 16.7% 29.9% 51.9% 41.6%
Homes Inc / Dole tender offer to acquire the
Food Co Inc remaining 17% stake in CC
which it did not already
own for an amended $15.75
in cash per share (vs. an
original $14) by accepting
5.019 mil shares, 16.6% of
CC's total shares
outstanding.
North Canadian 8/16/94 Offer: $13.25 CD for each $14.00 47.6% $122.0 60.0% 49.3% 77.8% 72.3%
Oils / Norcen share not already owned
Energy Resources
<CAPTION>
Stock Price Premium
Target Name / --------------------------- Cash/
Acquiror Name 1 Day LTM Stock
Avg. High
- ----------------------------------------------------------
<S> <C> <C> <C> <C>
SCOR US Corp / 37.1% 64.3% 31.2% Cash
Societe
Commerciale de
Reassurance
REN Corp / Gambro 27.0% 50.1% 20.3% Cash
SA
BIC Corp / Societe 13.3% 36.2% 9.8% Cash
BIC
Club Mediterranee 41.4% 37.1% 23.1% Cash
/ Club Med Inc.
Fleet Mortgage 19.4% 22.5% (2.4%) Cash
Group Inc / Fleet
Financial Group Inc
Pacific Telecom 15.5% 17.0% 6.7% Cash
Inc / PacifiCorp
Contel Cellular 26.8% 32.8% (4.3%) Cash
Inc. / GTE Corp.
Castle & Cooke 35.5% 23.7% 0.0% Cash
Homes Inc / Dole
Food Co Inc
North Canadian 77.8% 60.0% 45.5% Cash
Oils / Norcen
Energy Resources
</TABLE>
31
<PAGE>
PREMIUMS PAID IN SELECTED SQUEEZE-OUTS (CONT'D)
<TABLE>
<CAPTION>
Stock Price Premium
Target Name / Date Price / % Deal ------------------------------------
Acquiror Name Annc. Transaction Terms Share Purch Value 6 Mos. 3 Mos. 1 Mo. 1 Week
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Intergroup 7/29/94 Foundation Health (FH) $71.03 37.4% $255.7 40.0% 58.3% 61.4% 90.7%
Healthcare Corp / acquired the remaining 3.6
Foundation Health mil. common shares, or
Corp 37.4% of Intergroup
Healthcare (IH) it did not
already own for $255.7 mil
in common stock
Chemical Waste 7/28/94 WMX Technologies acquired $8.85 21.4% $397.4 (17.7%) 7.3% 1.1% 10.6%
Management Inc / the remaining 44.9 mil
WMX Technologies common shares, or 21.4% it
Inc did not already own in
Chemical Waste Management
(CWM) in a transaction
valued at an amended $397.365
mil.
Ogden Projects Inc 6/6/94 Ogden (OG) acquired the $19.34 15.8% $110.3 24.8% 25.8% 20.9% 25.8%
(Ogden Corp) / remaining 15.8% of Ogden
Ogden Corp Projects (OP) that it did
not already own in a stock
swap merger valued at an
amended $110.25 mil.
Enquirer/Star 4/28/94 Offer: $17.50 cash for $17.50 43.0% $636.0 (5.4%) (7.3%) 2.2% 16.7%
Group Inc. / 43.0% of each share not
MacFadden Holdings already owned.
Inc. & Boston
Ventures L.P.
Foxmeyer Corp. / 3/1/94 Offer: Exchange of $14.75 $14.75 19.4% $81.3 13.5% 8.3% 13.5% (5.6%)
National in principal amount of
Intergroup Inc. $81.3MM new issue of 8.25%
senior notes due 2004 for
each share not already
owned.
Scripps Howard 2/17/94 EW Scripps (EW), a 77.6% $79.93 14.0% $115.9 12.6% 12.6% 12.3% 6.4%
Broadcasting Co / subsidiary of EW Scripps
EW Scripps (Edward Trust, offered to acquire
Scripps Tr) the remaining 14% interest
in Scripps Howard Broad-
casting (SHB), that it did
not already own, in a
transaction valued at
$115.92 mil.
Holnam Inc 1/7/94 Holderbank Financiere $7.65 5.0% $51.7 61.1% 53.0% 7.4% 15.5%
(Holdernam Inc) / Glarus (HFG) acquired the
Holderbank remaining 5%, or about 6.8
Financiere Glarus mil common shares, that it
did not already own in
Holnam, a unit of the
Holdernam subsidiary of HFG
<CAPTION>
Stock Price Premium
--------------------------- Cash/
Target Name / 1 Day LTM Avg. LTM Stock
Acquiror Name High
- ------------------------------------------------------------
<S> <C> <C> <C> <C>
Intergroup 49.5% 69.4% 20.4% Stock
Healthcare Corp /
Foundation Health
Corp
Chemical Waste 10.6% 1.4% (21.3%) Cash
Management Inc /
WMX Technologies
Inc
Ogden Projects Inc 11.3% 14.2% (19.0%) Stock
(Ogden Corp) /
Ogden Corp
Enquirer/Star 20.7% 7.5% (7.3%) Cash
Group Inc. /
MacFadden Holdings
Inc. & Boston
Ventures L.P.
Foxmeyer Corp. / (6.3%) (2.3%) (6.3%) Cash
National
Intergroup Inc.
Scripps Howard 1.8% 13.6% (4.8%) Stock
Broadcasting Co /
EW Scripps (Edward
Scripps Tr)
Holnam Inc 13.3% 74.9% 0.3% Cash
(Holdernam Inc) /
Holderbank
Financiere Glarus
</TABLE>
32
<PAGE>
PREMIUMS PAID IN SELECTED SQUEEZE-OUTS (CONT'D)
<TABLE>
<CAPTION>
Stock Price Premium
Target Name/ Date Price/ % Deal -------------------------
Acquiror Name Annc. Transaction Terms Share Purch Value 6 Mos. 3 Mos. 1 Mo.
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Southeastern 11/22/93 Offer: Exchange 2,691,822 $20.54 29.0% $69.0 40.4% 10.3% (4.5%)
Public Service Co. shares of Class A common
/Triarc stock, or about .8 of a
Companies, Inc. Triarc share for each
publicly held Southeastern
share.
West 9/20/93 Offer: $46 cash per share $46.00 5.0% $46.0 (5.6%) (5.2%) (4.2%)
Point-Pepperell not already owned.
Inc/Valley
Fashions Corp
Southeastern 4/26/93 Triarc Cos, formerly known $25.60 29.0% $86.1 (13.6%) (18.7%) (4.7%)
Public Service Co as DWG, acquired the
/DWG Corp (Triarc remaining 29%, or 3.36 mil.
Companies Inc) common shares, in its
Southeastern Public Service
(SP) unit for a
revised $86.14 mil.
Brand Cos Inc./ 11/13/92 Offer: One share of $18.75 $18.75 44.0% $185.0 25.0% 27.1% 10.3%
Chemical Waste cash per share not already
Management Inc. owned.
PHLCORP Inc/ 8/17/92 Leucadia National (LN), a $25.78 36.9% $139.9 19.9% 32.2% 28.9%
Leucadia National unit of Unitah National,
Corp acquired the remaining
36.9%, or 5,428,127 shares,
of PHLCORP that it
did not already own for
$139.94 mil in LN
common stock.
Loral Aerospace 7/1/92 6.15 mil shs com/41% stock $32.24 41.0% $198.3 (0.8%) 2.3% 3.6%
Corp/Loral Corp interest
Grace Energy Corp. 3/2/92 Original Offer: 64MM cash $19.00 17.0% $77.3 13.4% 33.3% 60.0%
/W.R. Grace & Co. for the remaining 17% of
the company not already
owned. Offer later raised
to $77.3MM.
Unocal Exploration 2/24/92 Unocal acquired the $11.66 4.0% $117.5 (12.8%) 9.7% 22.7%
Corp/Unocal Corp remaining 10.08 mil common
shares, or 4%, of Unocal
Exploration that it
did not already own in a stock
swap valued at $117.5 mil.
<CAPTION>
Stock Price Premium
Target Name/ -------------------------------------- Cash/
Acquiror Name 1 Week 1 Day LTM Avg. LTM Stock
High
- -------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Southeastern (9.0%) (4.7%) 22.7% (17.4%) Stock
Public Service Co.
/Triarc
Companies, Inc.
West (8.0%) (7.8%) 0.0% (8.0%) Cash
Point-Pepperell
Inc/Valley
Fashions Corp
Southeastern (20.0%) (19.1%) (17.2%) (20.0%) Stock
Public Service Co
/DWG Corp (Triarc
Companies Inc)
Brand Cos Inc./ 7.1% 4.9% 13.2% 4.9% Cash
Chemical Waste
Management Inc.
PHLCORP Inc/ 15.2% 15.2% 31.6% 13.9% Stock
Leucadia National
Corp
Loral Aerospace 1.9% (0.0%) (5.5%) (6.4%) Cash
Corp/Loral Corp
Grace Energy Corp. 58.3% 31.0% 26.5% 3.4% Cash
/W.R. Grace & Co.
Unocal Exploration 16.6% 18.1% 10.1% (2.8%) Stock
Corp/Unocal Corp
</TABLE>
33
<PAGE>
PREMIUMS PAID IN SELECTED SQUEEZE-OUTS (CONT'D)
<TABLE>
<CAPTION>
Stock Price Premium
Target Name/ Date Price/ % Deal --------------------------
Acquiror Name Annc. Transaction Terms Share Purch Value 6 Mos. 3 Mos. 1 Mo.
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
American 10/16/91 Time Warner (TW) acquired $82.50 18.0% $1,699.5 82.3% 96.4% 88.6%
Television & the remaining 18% of
Commun/Time American Television &
Warner Communications (ATC) that
it did not already own for
$82.50 per share or 1,699.5
mil.
Arkla Exploration 9/18/91 Arkla acquired the remaining $15.44 18.0% $92.6 14.4% (3.5%) 30.0%
Co/Arkla Inc 18%, or 5,999,400 common
shares, of Arkla Exploration
that it did not already own
in a sweetened stock swap
tender offer valued at
$92.6 mil.
Metcalf & Eddy Cos 3/1/91 Air & Water Technologies $19.26 18.0% $51.0 45.4% 51.1% 24.3%
Inc/Air & Water acquired the remaining 18%
Technologies Corp of Metcalf & Eddy that it
did not already own in a
stock swap valued at
$50.99 mil. Air & Water
offered .875 shares of its
common stock for each of
the 2,648,880 shares of
Metcalf traded publicly.
Hamilton Oil Corp. 2/6/91 $40 cash per share for the $40.00 49.9% $530.0 (8.6%) 16.8% 21.2%
/Broken Hill 49.9% not already owned.
Proprietary Co. (Shareholders can elect to
receive cash or the
equivalent value in
American Depository Shares
representing ordinary
shares of Broken Hill.)
US West Newvector 11/12/90 Original Offer: 0.95 US $44.00 19.0% $350.0 36.4% 67.6% 79.6%
Group Inc./US West shares per Newvector
West share. Revised Offer:
1.14 US West shares for
each of the 19% US West
Newvector not already
owned. (Exchange ratio
based on $44 value of
consideration.)
ERC Environmental 10/23/90 Original Offer: $14.75 $15.13 32.0% $45.4 44.1% 40.7% 26.1%
& Energy Services cash per share. Revised
Co. Inc./Ogden Offer: $15.13 cash for the
Corp. 32% of shares not already
owned.
<CAPTION>
Stock Price Premium
Target Name/ ----------------------------------- Cash/
Acquiror Name 1 Week 1 Day LTM LTM Stock
Avg. High
- --------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
American 70.1% 66.7% 100.3% 66.7% Cash
Television &
Commun/Time
Warner
Arkla Exploration 0.4% 1.2% (9.5%) (28.6%) Stock
Co/Arkla Inc
Metcalf & Eddy Cos 22.3% 22.3% 0.4% (38.4%) Stock
Inc/Air & Water
Technologies Corp
Hamilton Oil Corp. 19.4% 18.5% 15.5% (8.6%) Cash
/Broken Hill
Proprietary Co.
US West Newvector 68.4% 44.3% 36.1% 3.5% Stock
Group Inc./US
West
ERC Environmental 49.4% 37.5% 42.4% 37.5% Cash
& Energy Services
Co. Inc./Ogden
Corp.
</TABLE>
34
<PAGE>
PREMIUMS PAID IN SELECTED SQUEEZE-OUTS (CONT'D)
<TABLE>
<CAPTION>
Stock Price Premium
Target Name / Date Price / % Deal ------------------------
Acquiror Name Annc. Transaction Terms Share Purch Value 6 Mos. 3 Mos. 1 Mo.
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Western Gas 10/8/90 Western Gas Resources $12.75 48.0% $130.3 (8.9%) (8.9%) (12.4%)
Processors Ltd / acquired the remaining
Western Gas 10,222,957 common limited
Resources Inc partnership units, or the
48% of Western Gas Processors,
that it did not already own,
for the same number of
Western Gas Resources common
shares.
Sizzler 9/11/90 1.25 shares of "New $22.03 34.0% $122.0 25.9% 3.7% 26.3%
Restaurants Collins" for each of the
International Inc. 34% Sizzler already owned.
/ Collins Foods Closing contingent upon
completion of sale of
domestic Kentucky Fried
Chicken and other
operations to Pepsico.
Freeport-McMoRan 7/31/90 Exchange of stock valuing $10.50 18.5% $241.0 10.5% 27.3% 42.4%
Oil & Gas Co. / Freeport @ $10.50/share.
Freeport-McMoRan Freeport will be valued at
Inc. an average of the composite
tape closing prices for the
last 10 trading days prior to
the formal Freeport
Shareholder approval.
Caesars New Jersey 7/19/90 $22 cash per share tender $22.00 13.4% $63.9 36.4% 40.8% 34.6%
Inc. / Caesars offer for the 2,175,945
World Inc. outstanding shares.
TVX Broadcast 7/12/90 Paramount Communications, $9.50 21.0% $61.4 130.3% 130.3% 85.4%
Group Inc. / formerly Gulf & Western,
Paramount acquired the remaining 21%
Communications Inc. of TVX Broadcast Group, a
unit of Salomon, for a
sweetened $9.50 per share.
Mack Trucks Inc / 7/6/90 Renault Vehicules $8.78 40.0% $103.7 59.6% 32.5% 21.9%
Renault Vehicles Industriels, a unit of
Industrials France's Regie Nationale
des Usines Renault,
acquired the 40% of Mack
Trucks it did not own.
DST Systems Inc. / 5/25/90 Initial offer of $14 cash $15.85 12.9% $39.0 37.8% 60.5% 54.6%
Kansas City per share. Most recent is
Southern $15.85 cash per share.
Industries, Inc.
<CAPTION>
Stock Price Premium
Target Name / ------------------------------------ Cash/
Acquiror Name 1 Week 1 Day LTM LTM Stock
Avg. High
- ------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Western Gas (15.0%) (16.4%) (14.3%) (16.4%) Stock
Processors Ltd /
Western Gas
Resources Inc
Sizzler 37.7% 31.5% 11.1% (5.8%) Stock
Restaurants
International Inc.
/ Collins Foods
Freeport-McMoRan 40.0% 31.3% 7.7% (16.0%) Stock
Oil & Gas Co. /
Freeport-McMoRan
Inc.
Caesars New Jersey 39.7% 36.4% 11.3% (21.4%) Cash
Inc. / Caesars
World Inc.
TVX Broadcast 94.9% 26.7% 127.7% 26.7% Cash
Group Inc. /
Paramount
Communications Inc.
Mack Trucks Inc / 71.3% 67.2% 15.5% (26.8%) Cash
Renault Vehicles
Industrials
DST Systems Inc. / 24.3% 5.7% 35.5% 5.7% Cash
Kansas City
Southern
Industries, Inc.
</TABLE>
35
<PAGE>
PREMIUMS PAID IN SELECTED SQUEEZE-OUTS (CONT'D)
<TABLE>
<CAPTION>
Stock Price Premium
Target Name / Date Price / % Deal --------------------------
Acquiror Name Annc. Transaction Terms Share Purch Value 6 Mos. 3 Mos. 1 Mo.
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
American Capital 5/9/90 Original Terms: 0.3 $11.50 17.4% $50.7 35.3% 27.8% 35.9%
Management & Primerica shares for each
Research Inc. / American Capital share.
Primerica Corp. Revised Offer: Either 0.32
(formerly American Primerica share of $11.50
Can Co.) in cash per share for the
17.4% share not already
owned.
LPL Technologies, 3/19/90 Revised Terms: $25 cash $25.00 49.0% $25.1 42.9% 58.7% 44.9%
Inc. / Cheshire for the 20% of LPL's shares
Acquisition Group that are publicly traded;
for the 29% balance of LPL
shares not owned by
Cheshire, $17 in cash plus
one share of 12% cumulative
redeemable preferred stock
with a stated value of $8
per share.
Shearson Lehman 3/2/90 Original terms: 0.426 $12.90 39.0% $361.2 (44.2%) (15.4%) 9.8%
Hutton / American American Express shares per
Express Co. Shearson share. Revised
Terms: 0.48 American
Express shares valued at
$26.875 for the 39% of
Shearson shares not already
owned.
POP Radio Corp. / 2/26/90 $20.50 cash for the 44% of $20.50 44.0% $40.0 34.4% 51.9% 69.9%
Heritage Media shares not already owned.
Corp.
Copperweld Corp. / 1/24/90 Inmetal acquired the $17.00 44.4% $78.0 23.6% 19.3% 33.3%
Imetal S.A. remaining 44.3% of
Copperweld that it did not
already own for $17 per
share in cash, or $78.026
mil., an increase from its
earlier offer of $15.50 per
share in cash, or $71.141
mil. The revised offer was
announced in January 1990.
<CAPTION>
Stock Price Premium
Target Name / ------------------------------------- Cash/
Acquiror Name 1 Week 1 Day LTM LTM Stock
Avg. High
- ------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
American Capital 35.3% 37.3% 31.0% 24.3% Cash
Management &
Research Inc. /
Primerica Corp.
(formerly American
Can Co.)
LPL Technologies, 53.8% 28.2% 66.2% 12.4% Cash
Inc. / Cheshire
Acquisition Group
Shearson Lehman 18.6% (0.8%) (27.7%) (45.4%) Stock
Hutton / American
Express Co.
POP Radio Corp. / 41.4% 20.6% 17.6% (18.0%) Cash
Heritage Media
Corp.
Copperweld Corp. / 44.7% 47.8% 35.3% 17.2% Cash
Imetal S.A.
</TABLE>
36
<PAGE>
HISTORICAL PRICE TO EARNINGS MULTIPLES/(1)/
There has been significant growth in EPS multiples over the past three years.
Weekly from February 18, 1994 - September 5, 1997
[LINE GRAPH APPEARS HERE]
Astro Price to Earnings
<TABLE>
<CAPTION>
1994 1995 1996 YTD 1997
---- ---- ---- --------
<S> <C> <C> <C> <C>
High 9.7x 10.9x 12.5x 16.0x
Low 6.5 6.9 9.5 12.3
Average 8.2 8.4 11.0 14.5
</TABLE>
(1) Multiples based on IBES mean estimate FY + 1.
37
<PAGE>
HISTORICAL PRICE TO BOOK MULTIPLES
Astro is trading at the higher end of its historical price/book multiple
valuation range.
WEEKLY FROM FEBRUARY 18, 1994 - SEPTEMBER 5, 1997
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Astro Price to Book Ratio 1994 1995 1996 YTD 1997
- ------------------------- ---- ---- ---- --------
<S> <C> <C> <C> <C>
High 2.36x 2.40x 1.74x 2.05x
Low 1.46 1.05 1.23 1.30
Average 1.74 1.47 1.47 1.76
</TABLE>
* Comparable Companies include: American Annuity Group, Inc., Liberty Financial
Companies, Inc., Presidential Life Corporation and SunAmerica, Inc.
38
<PAGE>
ASTRO VALUATION MATRIX
<TABLE>
<CAPTION>
($ in millions, except per share data)
Equity Purchase Price/ Total Enterprise Value/
---------------------------------------------- -----------------------------
Total Premium Over LTM 6/30/97 6/30/97 1996 SAP Net 12/31/96 SAP
Equity Purchase Price Enterprise EPS 1997E EPS 1998E EPS BVPS Income C&S
- ---------------------------- ----------- --------- ----------- --------- ------------ --------------
Per Share Aggregate(1) Value(2) Market(3) $1.62 $1.75 $2.00 $13.92 $41.3 $572.4
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$28.13 $1,991.5 $2,139.6 0.0% 17.4x 16.1x 14.1x 2.02x 51.9x 3.74x
$25.00 $1,773.5 $1,921.6 (11.1)% 15.4x 14.3x 12.5x 1.80x 46.6x 3.36x
25.50 1,808.4 1,956.5 (9.3) 15.7 14.6 12.8 1.83 47.4 3.42
26.00 1,843.3 1,991.4 (7.6) 16.0 14.9 13.0 1.87 48.3 3.48
26.50 1,878.1 2,026.2 (5.8) 16.4 15.1 13.3 1.90 49.1 3.54
27.00 1,913.0 2,061.1 (4.0) 16.7 15.4 13.5 1.94 50.0 3.60
27.50 1,947.9 2,096.0 (2.2) 17.0 15.7 13.8 1.98 50.8 3.66
28.00 1,982.8 2,130.9 (0.4) 17.3 16.0 14.0 2.01 51.7 3.72
28.50 2,017.7 2,165.8 1.3 17.6 16.3 14.3 2.05 52.5 3.78
29.00 2,052.6 2,200.7 3.1 17.9 16.6 14.5 2.08 53.3 3.84
29.50 2,087.5 2,235.6 4.9 18.2 16.9 14.8 2.12 54.2 3.91
30.00 2,122.3 2,270.4 6.7 18.5 17.1 15.0 2.16 55.0 3.97
30.50 2,157.2 2,305.3 8.4 18.8 17.4 15.3 2.19 55.9 4.03
31.00 2,192.1 2,340.2 10.2 19.1 17.7 15.5 2.23 56.7 4.09
31.50 2,227.0 2,375.1 12.0 19.4 18.0 15.8 2.26 57.6 4.15
32.00 2,261.9 2,410.0 13.8 19.8 18.3 16.0 2.30 58.4 4.21
32.50 2,296.8 2,444.9 15.6 20.1 18.6 16.3 2.33 59.3 4.27
33.00 2,331.6 2,479.7 17.3 20.4 18.9 16.5 2.37 60.1 4.33
33.50 2,366.5 2,514.6 19.1 20.7 19.1 16.8 2.41 61.0 4.39
34.00 2,401.4 2,549.5 20.9 21.0 19.4 17.0 2.44 61.8 4.45
34.50 2,436.3 2,584.4 22.7 21.3 19.7 17.3 2.48 62.7 4.52
35.00 2,471.2 2,619.3 24.4 21.6 20.0 17.5 2.51 63.5 4.58
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Based on 69,769,338 shares outstanding and 2,340,850 options at an average
strike price of $12.50.
(2) Includes $148.1 million of debt.
(3) Closing price as of September 10, 1997
39
<PAGE>
COMPANY PROFILE - JETSON
40
<PAGE>
PROFILE OF JETSON
Jetson is a diversified financial services company engaged primarily in the
underwriting of life insurance, the sale of annuities and consumer finance
lending.
. One of the largest insurance-based financial services holding companies in
the U.S. with a market capitalization of $12.7 billion as of September 10,
1997.
. Jetson's strategy is focused on three segments of the financial services
business:
- Life insurance, $397 million in earnings, represents 53% of 1996
earnings.
- Retirement services, $225 million in earnings, represents 30% of 1996
earnings.
- Consumer finance, $128 million in earnings, represents 17% of 1996
earnings.
. In recent years, Jetson has been one of the leaders in the consolidation
trend occurring in the insurance industry:
- In January 1995, acquired Franklin Life for $1.2 billion in cash and
stock.
- In February 1996, acquired Independent Insurance Group for $362 million
in cash and stock.
- In April 1997, acquired Home Beneficial Corp. for $665 million in cash
and stock.
- In June 1997, acquired USLIFE for $1.8 billion in stock.
. GAAP equity of $6.7 billion as of June 30, 1997.
. Statutory capital and surplus of $2.3 billion as of December 31, 1996.
. During the first half of 1997, the Company repurchased 9.5 million shares.
Further repurchases in 1997 will be limited due to the USLIFE transaction.
. Jetson ratings: "A++" A.M. Best rating; "AA+" S&P claims paying ability
rating.
41
<PAGE>
JETSON - FINANCIAL HIGHLIGHTS
($ in millions, except per share data)
<TABLE>
<CAPTION>
FOR THE YEARS ENDED FOR THE SIX MONTHS ENDED
DECEMBER 31, JUNE 30,
-------------------------------------------------------- ---------------------------------------
Income Statement 1992 1993 1994 1995 1996 1996 1997(1) CAGR
1992-96
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues $4,602 $4,829 $4,841 $6,495 $6,887 $4,327 $4,368 10.6%
Operating Earnings 524 574 627 537 645 371 429 5.3
Net Income 533 204 513 545 577 359 86 2.0
Operating Earnings Per Share 2.41 2.65 3.00 2.60 3.07 1.49 1.73 6.2
Operating Return on
Equity(2) 12.1% 12.4% 14.4% 12.1% 13.2% 13.4% 12.6% 12.8
Segment Earnings
- ------------------------------------------------------------------------------------------------------------------------------------
Retirement Services $130 $162 $187 $204 $225 $118 $127 14.7%
Consumer Finance 161 206 245 85 128 59 79 (5.6)
Life Insurance 323 291 257 348 397 267 285 5.3
Balance Sheet
- ------------------------------------------------------------------------------------------------------------------------------------
Total Assets $39,742 $43,982 $46,295 $61,153 $66,254 $63,017 $77,387 13.6%
Investments 27,814 31,876 30,697 42,904 44,270 42,680 52,707 12.3
Corporate Debt 1,371 1,257 1,475 1,723 1,533 1,847 2,238 2.8
Redeemable Equity - - 47 729 1,227 731 1,725 NA
Shareholders' Equity(3) 4,616 4,461 4,407 4,732 5,079 5,312 6,746 2.4
Book Value Per Share 21.33 20.82 21.70 23.24 24.78 24.40 25.41 3.8
Debt/Total Capital(4) 22.9% 22.0% 24.9% 24.0% 19.6% 23.4% 20.9% 22.7
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Includes the acquisition of Home Beneficial Life on April 16, 1997 for $665
million.
(2) Six month periods are annualized returns.
(3) Excludes effect of SFAS 115.
(4) Preferred included in total capital only.
42
<PAGE>
SUMMARY OF RECENT ANALYST COMMENTS -
JETSON
43
<PAGE>
SUMMARY OF ANALYST ESTIMATES
<TABLE>
<CAPTION>
Date Stock Price(1) Firm 1997E EPS 1998E EPS Recommendation
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
April 28, 1997 40 1/4 LehmanBrothers $3.50 $3.90 Neutral
June 2, 1997 44 1/4 Dillon Read 3.50 4.00 Buy
July 11, 1997 49 Smith Barney 3.50 3.95 Neutral
July 16, 1997 49 5/8 Oppenheimer & Co 3.53 3.97 Market Perform
July 31, 1997 53 11/16 Donaldson, Lufkin & Jenrette 3.50 3.90 Market Performance
July 31, 1997 54 Morgan Stanley 3.47 3.90 Neutral
August 5, 1997 51 3/4 Merrill Lynch 3.50 3.95 Accumulate
Mean: 3.50 3.93
Median 3.50 3.90
- ------------------------------------------------------------------------------------------------------------------------------------
Current (8/28/97) First Call Mean: $3.50 $3.90
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Represents the closing stock price at the indicated date.
44
<PAGE>
RESEARCH ANALYSTS' VIEWS
<TABLE>
<CAPTION>
LEHMAN BROTHERS DILLON, READ & CO., INC. SMITH BARNEY
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Analyst(s) Edward A. Spehar Harry Radovich Colin W. Devine
Latest Report April 28, 1997 June 2, 1997 July 11, 1997
Price $40 1/4 $44 1/4 $49
- ------------------------------------------------------------------------------------------------------------------------------------
1997 EPS, P/E $3.50 11.5x $3.50 12.6x $3.50 14.3x
1998 EPS, P/E $3.90 10.3x $4.00 11.1x $3.95 12.7x
12-month Price Target NA $50.00 $50.00
- ------------------------------------------------------------------------------------------------------------------------------------
Comments Better than expected second Buy rating reflects on Jetson's Expect Jetson to resolve within
quarter results. position as a leading consolidator in 12 months whether to increase
the rapidly changing financial its stake in Astro, or divest
A more optimistic outlook for services arena. its position.
the finance company is offset
by a lower earnings expectation Primary beneficiary of industry Jetson will remain an active
for the retirement annuity consolidation: Jetson has completed or acquirer and will continue to
segment and the belief that announced five acquisitions with an demonstrate its ability to
dilution from the USLIFE merger aggregate value of $4.4 billion since enhance shareholder value
in 1997 will be slightly greater 1994. through extraction of expense
than previously forecast. savings.
Financial flexibility through its
Although stock appears balance sheet strength and free cash Year to date share appreciation
undervalued, the catalyst to flow generating capacity. reflects combination of the
achieve outperformance is not general market, apparent
clear. stabilization of consumer
finance delinquencies and
expectations surrounding the
USLIFE merger. Shares are
considered to be fully valued.
- ------------------------------------------------------------------------------------------------------------------------------------
Rating Neutral Buy Neutral
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
45
<PAGE>
RESEARCH ANALYSTS' VIEWS (CONT'D)
<TABLE>
<CAPTION>
OPPENHEIMER & CO DONALDSON, LUFKIN & JENRETTE
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Analyst(s) Eric. N. Berg Vanessa Wilson
J. Paul Newsome Eriko Watanabe
Latest Report
July 16, 1997 July 31, 1997
Price $49 5/8 $53 11/16
- -----------------------------------------------------------------------------------------------------------
1997 EPS, P/E $3.53 14.1x $3.50 15.3x
1998 EPS, P/E $3.97 12.5x $3.90 13.8x
12-month Price Target NA NA
- -----------------------------------------------------------------------------------------------------------
<CAPTION>
<C> <S> <C>
Comments The acquisitions of Home Beneficial Second quarter results were in line
Life and USLIFE will provide a 5 to with expectations.
10 cent positive surprise next year.
Consumer Finance results were ahead of
Shares are considered to be fairly expectations on improving credit
valued and upside in Jetson's stock quality, which led to favorable
over the next year is expected to be charge-offs.
in the 12% area.
Retirement services achieved better
than expected annuity spreads.
Life insurance earnings were generally
in line despite the companies launch of a
full-scale realignment of the life
insurance segments and the closing of two
major acquisitions, Home beneficial and
USLIFE, during the quarter.
- -----------------------------------------------------------------------------------------------------------
Rating Market Perform Market Performance
- -----------------------------------------------------------------------------------------------------------
<CAPTION>
MORGAN STANLEY DEAN WITTER
- ---------------------------------------------------------------------
<S> <C> <C>
Analyst(s) Michael Blumstein
Latest Report July 31, 1997
Price $54
- ---------------------------------------------------------------------
1997 EPS, P/E $3.47 15.5x
1998 EPS, P/E $3.90 13.8x
12-month Price Target $58.00
- ---------------------------------------------------------------------
<CAPTION>
<C> <S>
Comments Cost-cutting continues to fuel life
insurance earnings growth, while
consumer finance earnings continue to
benefit from easy comparisons.
The risk going forward is that the
integration of USLIFE turns out to be
tougher than management anticipates.
- ---------------------------------------------------------------------
Rating Neutral
- ---------------------------------------------------------------------
</TABLE>
46
<PAGE>
RESEARCH ANALYSTS' VIEWS (CONT'D)
<TABLE>
<CAPTION>
MERRILL LYNCH
- ----------------------------------------------------------------------
<S> <C> <C>
Analyst(s) Edward A. Spehar
Louise Costikyan
Latest Report August 5, 1997
Price $51 3/4
- ----------------------------------------------------------------------
1997 EPS, P/E $3.50 14.8x
1998 EPS, P/E $3.95 13.1x
12-month Price Target $57
- ----------------------------------------------------------------------
<CAPTION>
<C> <S>
Comments Second quarter results were in line with
expectations.
Earnings growth has been led by 31%
rebound in consumer finance results.
Earnings in the retirement annuity
segment (VALIC) were slightly ahead of
expectations.
- ----------------------------------------------------------------------
Rating Long-Term Accumulate
- ----------------------------------------------------------------------
</TABLE>
47
<PAGE>
VALUATION ANALYSIS - JETSON
48
<PAGE>
JETSON STOCK PRICE PERFORMANCE
Jetson has experienced a 18.5% increase in its stock price per annum over the
past 3 years.
WEEKLY FROM FEBRUARY 18, 1994 - SEPTEMBER 5, 1997
[LINE GRAPH APPEARS HERE]
Low Price on 4/26/94 - $25.25
High Price on 7/30/97 - $53.69
(1) 1/6/95 - In January 1995, acquired Franklin Life for $1.2 billion in cash
and stock.
(2) 2/9/96 - In February 1996, acquired Independent Insurance Group for $362
million in cash and stock.
(3) 4/11/97 - In April 1997, acquired Home Beneficial Corp. for $665 million
in cash and stock.
(4) 6/13/97 - In June 1997, acquired USLIFE for $1.8 billion in stock.
49
<PAGE>
JETSON INDEXED PRICE PERFORMANCE
Jetson's price performance has lagged the comparable company index over the
past twenty months.
WEEKLY FROM FEBRUARY 18, 1994 - SEPTEMBER 5, 1997
[LINE GRAPH APPEARS HERE]
* Comparable Companies include: Conseco, Inc., The Equitable Companies
Incorporated, Lincoln National Corporation, Reliastar Financial Corporation
and Transamerica Corporation.
Indexed prices are equal weighted.
50
<PAGE>
PUBLIC COMPANY COMPARABLE ANALYSIS
<TABLE>
<CAPTION>
Price/
EPS(1) Earnings(35) Price to Proj.
Price -------------------------------------------- Book EPS Proj.
9/10/97 1997E 1998E 1997E 1998E Value Div Yield Growth ROE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Jetson $50.00 $3.50 $3.97 14.3x 12.6x 1.83x 2.8% 13.4% 12.8%
Conseco Inc. $45.38 $2.69 $3.27 16.9x 13.9x 2.50x 1.1% 21.6% 14.8%
Equitable Cos. 41.00 2.63 2.95 15.6 13.9 2.07 0.5 12.2 13.3
Jefferson Pilot Corp. 71.25 4.17 4.86 17.1 14.7 2.04 2.2 16.5 11.9
Lincoln National Corp. 68.56 4.52 5.03 15.2 13.6 1.56 2.9 11.3 10.3
Reliastar Financial Corp. 77.31 5.15 5.89 15.0 13.1 2.36 1.6 14.4 15.7
Transamerica Corp. 97.56 6.50 8.01 15.0 12.2 1.52 2.0 23.2 10.1
Adjusted Mean(36) 15.7x 13.6x 2.01x 1.8% 16.2% 12.6%
Mean 15.8 13.6 2.01 1.7 16.5 12.7
Low 15.0 12.2 1.52 0.5 11.3 10.1
High 17.1 14.7 2.50 2.9 23.2 15.7
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) IBES earnings estimates for 1997 and 1998.
(2) Excludes Jetson, high and low.
51
<PAGE>
HISTORICAL PRICE TO EARNINGS MULTIPLES/(1)/
Although Jetson and its Comparable Companies have enjoyed significant EPS
multiple growth over the past three years, it has been less than in the
annuity sector.
WEEKLY FROM FEBRUARY 18, 1994 - SEPTEMBER 5, 1997
[LINE GRAPH APPEARS HERE]
* Comparable Companies include: Conseco., Inc. The Equitable Companies
Incorporated, Lincoln National Corporation, Reliastar Financial Corporation
and Transamerica Corporation.
<TABLE>
<CAPTION>
Jetson Price to Earnings 1994 1995 1996 YTD 1997
- ------------------------ ---- ---- ---- --------
<S> <C> <C> <C> <C>
High 10.2x 11.4x 13.1x 14.8x
Low 8.9 9.1 9.8 10.6
Average 9.5 10.1 11.0 12.9
</TABLE>
(1) Multiples based on IBES mean estimate FY+1.
52
<PAGE>
HISTORICAL PRICE TO BOOK MULTIPLES
Although Jetson and its Comparable Companies have enjoyed significant book
multiple growth over the past three years, it has been less than in the
annuity sector.
[LINE GRAPH APPEARS HERE]
Jetson Price to Book 1994 1995 1996 YTD 1997
-------------------- ---- ---- ---- --------
High 1.66x 1.89x 1.60x 1.91x
Low 1.33 1.20 1.19 1.46
Average 1.42 1.48 1.39 1.67
*Comparable Companies include: Conseco., Inc., The Equitable Companies
Incorporated, Lincoln Corporation, Reliaster Financial Corporation and
Transamerica Corporation.
53
<PAGE>
TRANSACTION ANALYSIS - JETSON
54
<PAGE>
TRANSACTION ANALYSIS
. The acquisition was modeled with 50% cash and 50% stock.
. Sensitivities include $10 million and $20 million of potential expense
savings/synergies.
. Analysis assumes Astro earnings per share of $1.75 for 1997 and $2.00 for
1998.(1)
. Analysis assumes Jetson earnings per share of $3.50 for 1997 and $3.97 for
1998.(2)
. Balance sheet is as of June 30, 1997.
. 40 year goodwill period assumed on new shares purchased as well as
restatement of old goodwill to 40 years.
. $8.0 million ($5.2 million after-tax) reduction in investment income.
. $4.3 million reduction in amortization on goodwill from previous 40%
purchase of Astro (i.e., increasing original 20 year amortization period to
40 years).
(1) Astro management projections.
(2) IBES mean estimates.
55
<PAGE>
PRO FORMA ACCRETION/DILUTION ANALYSIS
<TABLE>
<CAPTION>
Per Share Equity Purchase Price
-------------------------------------------------------------------------------------------------------
50% CASH, 50% STOCK $29.00 $29.50 $30.00 $30.50 $31.00 $31.50
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1997E EPS
No Synergies (2.5)% (2.7)% (2.8)% (3.0)% (3.2)% (3.4)%
$10 Million Synergies (1.8) (2.0) (2.1) (2.3) (2.5) (2.7)
$20 Million Synergies (1.1) (1.2) (1.4) (1.6) (1.8) (2.0)
1998E EPS
No Synergies (1.1)% (1.3)% (1.4)% (1.6)% (1.8)% (1.9)%
$10 Million Synergies (0.5) (0.6) (0.8) (1.0) (1.1) (1.3)
$20 Million Synergies 0.2 0.0 (0.2) (0.4) (0.5) (0.7)
6/30/97 Book Value 3.8 3.8 3.9 4.0 4.0 4.1
Debt/Total Capital 24.6 24.7 24.7 24.8 24.8 24.8
Debt and Pref./Total
Capital 39.7 39.7 39.8 39.8 39.8 39.8
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
56
<PAGE>
ILLUSTRATIVE COLLAR STRUCTURES
57
<PAGE>
POTENTIAL EXCHANGE RATIO STRUCTURES
Overview.
. Fixed-Shares - A fixed-share exchange ratio sets a specific number of shares
------------
of the buyer's common stock to be exchanged for each share of the seller's
common stock. The value ultimately received by the seller rises or falls in
step with changes in the market price of the buyer's common stock.
. Fixed-Value - A fixed-value exchange ratio sets a specific price to be paid
-----------
for each share of the seller's common stock, with payment made in the form
of buyer common stock. The number of buyer shares required to deliver the
fixed value decreases if the buyer's stock price rises and increases if the
buyer's stock price falls.
. Seller's Perspective - A seller who sees upside potential in the buyer's
--------------------
common stock may prefer a fixed-share exchange ratio, which allows the
seller to benefit from a rise in the buyer's stock price, but exposes the
seller to a decline in value if his expectation proves wrong. Conversely, a
seller who sees risk of a sell-off in the buyer's stock between announcement
and closing may prefer a fixed-value exchange ratio, which protects against
a decline in the buyer's stock price, but also limits the seller's
participation in any appreciation in the buyer's stock price that may occur
prior to closing.
. Buyer's Perspective - A buyer's interests in setting an exchange ratio are
-------------------
generally the opposite of a seller's. A buyer who expects his price to rise
might prefer a fixed-value exchange ratio, which allows him to issue fewer
shares if his expectation proves correct. If he expects his price to
decline, he might prefer a fixed-share exchange ratio, which would not
require him to issue more shares despite a fall in his market price. Some
buyers prefer fixed-share exchange ratios regardless of their stock price
expectations, due to the certainty a fixed-share exchange ratio provides as
to the number of shares to be issued.
58
<PAGE>
POTENTIAL EXCHANGE RATIO STRUCTURES (CONT'D)
Exchange Ratio Collars.
. Purpose - Because buyers and sellers often have opposite preferences for
-------
fixed-value versus fixed-share exchange ratios, "collars" are often used to
reach a compromise. A collar is a range of buyer stock prices within which
the exchange ratio behaves in one manner and outside of which it behaves in
the opposite manner. Collars effectively allow the buyer and seller to share
the risk or reward of movements in the buyer's stock price.
. Collar on a Fixed-Value Exchange Ratio - Provides for a fixed-value exchange
--------------------------------------
ratio if the buyer's final stock price is within the collar and a
fixed-share exchange ratio outside of the collar. Gives the seller value
protection within the collar, but limits the number of shares the buyer must
issue if his price falls below the bottom of the collar. Also provides the
seller with the opportunity to benefit from a rise in the buyer's stock
price to the extent the buyer's stock price rises above the top of the
collar. Virtually all mergers with fixed-value exchange ratios include a
collar.
. Collar on a Fixed-Share Exchange Ratio - Provides for a fixed-share exchange
--------------------------------------
ratio if the buyer's final stock price is within the collar and a
fixed-value exchange ratio outside of the collar. The seller participates in
upward and downward movements in the buyer's stock price, but the collar
limits the range of potential final values. If the buyer's stock price falls
below the bottom of the collar, the buyer must issue more shares to maintain
a minimum value to the seller. Conversely, if the buyer's stock price rises
above the top of the collar, the buyer can reduce the number of shares
issued while still providing the maximum value determined by the collar.
Collars are less consistently used with fixed-share exchange ratios than
with fixed-value exchange ratios.
59
<PAGE>
POTENTIAL EXCHANGE RATIO STRUCTURES (CONT'D)
Exchange Ratio Collars.
. Balanced vs. Unbalanced Collars - Collars are often evenly distributed
-------------------------------
around the buyer's stock price when the collar is set, but "unbalanced"
collars are not unusual. The buyer's initial stock price may be above or
below the mid-point of the collar, providing disproportionate sharing in the
risk and reward of movements in the buyer's stock price. In a fixed-value
exchange ratio, the seller benefits if the mid-point of the collar is set
below the buyer's current market price - the seller receives more downside
price protection than he forgoes in upside participation. In a fixed-share
exchange ratio, the reverse holds - the seller receives more downside
protection than he forgoes in upside potential if the mid-point of the
collar is set above the buyer's current market price.
. Width of Collar - Whether a wide collar or a narrow collar is more desirable
---------------
from a seller's perspective depends on the seller's expectations for the
buyer's stock price performance. In a fixed-value exchange ratio, a wide
collar provides more price protection, but less upside participation, than a
narrow collar. In a fixed-share exchange ratio, the opposite is true.
60
<PAGE>
FIXED SHARE AND FIXED VALUE EXCHANGE RATIO
Collars can be structured to give varying payoff profiles to Astro
shareholders(1).
[LINE GRAPH APPEARS HERE] [LINE GRAPH APPEARS HERE]
. Assumes a fixed level of ownership in the combined company for both
Astro and Jetson inside the range of the collar.
. Limits the number of shares Astro will receive if Jetson's stock
price exceeds the top end of the collar.
. Assures Astro a fixed value per share within the band of the collar.
. Limits number of shares Jetson can be forced to issue if its stock
price were to decline, limiting the potential dilution to Jetson
shareholders.
(1) This example assumes a $30.00 per share purchase price.
61
<PAGE>
POTENTIAL EXCHANGE RATIO STRUCTURES (CONT'D)
Walk-Away Rights.
. Purpose - A "walk-away" right determines a party's ability to terminate the
-------
merger if the buyer's stock price experiences a severe decline after the
merger agreement is executed. A walk-away right can be used with fixed-share
or fixed-value exchange ratios, and in conjunction with or as a substitute
for a collar.
. Seller Absolute Walk-Away - The seller has the unilateral right (but not the
-------------------------
obligation) to terminate the merger if the buyer's stock price falls below a
pre-determined level.
. Seller Two-Pronged Walk-Away - The seller has the unilateral right (but not
----------------------------
the obligation) to terminate the merger if: (i) the buyer's stock price
falls below a pre-determined level; and, (ii) the buyer's stock price has
underperformed an index of other insurance stocks by more than a specified
amount. The seller therefore has the right to terminate the merger only if
the fall in the buyer's stock price may not be attributed to a general
decline in insurance stock prices.
. Make-Whole - If the buyer's stock price falls enough to trigger the seller's
----------
walk-away right and the seller notifies the buyer of its intention to
exercise this right, the buyer may (but is not obligated to) override the
seller's right to walk away by increasing the number of shares offered to
bring the value of the consideration back to the walk-away threshold.
. Buyer Walk-Away - (Applicable only to mergers with a fixed-share exchange
---------------
ratio and collar). If the buyer's stock price declines, the collar requires
the buyer to increase the number of shares offered to preserve a
predetermined value per share of seller common stock. Below some price level
of the buyer's common stock, the buyer may prefer to terminate the
transaction rather than suffer the dilution from issuing a very large number
of shares.
62
<PAGE>
POTENTIAL EXCHANGE RATIO STRUCTURES (CONT'D)
Other Exchange Ratio Features.
. Average Price - An average price of the buyer's common stock is generally
-------------
used in connection with fixed-value exchange ratios and to determine
walk-away rights. An average price may be viewed as more representative of
true value of the buyer's stock than the price at any one particular moment.
Using an average price also decreases the volatility in the number of shares
to be received, and mitigates the risk of an aberrational price triggering a
walk-away right. A variety of techniques are used to average the buyer's
stock price over a number of days, including the average of daily closing
prices, the average of the daily high and low trading prices, and the
weighted average price for all trades occurring during the valuation period.
. Valuation Period - The "valuation period" for determining the buyer's
----------------
average stock price is generally ten to twenty trading days in length. The
shorter the valuation period, the more quickly the average price responds to
movements in the buyer's stock price. The valuation period is often set to
end shortly before closing, but is sometimes pegged to the date of the
seller's shareholder meeting or to the date regulatory approval is received.
. Hybrid Exchange Ratios - A number of additional structures can be created by
----------------------
using different combinations of fixed-share and fixed-price exchange ratios,
collars and walk-aways. Examples include a "one-sided collar" providing for
a fixed-share exchange ratio above a certain price and a fixed-value
exchange ratio below that price (or vice-versa), and "double collars" which
create a multi-step function alternating between fixed-share and fixed-value
exchange ratios.
63
<PAGE>
EXHIBIT (B)(4)
<PAGE>
EXHIBIT (B)(4)
Summary of Proposed Transaction
<TABLE>
<S> <C>
Price per outstanding Western National Share: $29.75
Aggregate consideration for public interest: $1,159 million (a)
Theoretical aggregate consideration for 100% interest: $2,118 million (b)
Actual aggregate consideration paid by American General: $1,563 million ($21.95 per share) (c)
Form of consideration: 50% AGC Common Stock, 50% cash
Collar provision: Fixed price collar
Key conditions to closing: . Regulatory approvals
. Western National shareholders' approval
Termination fee: Limited to reimbursement of expenses only
Termination provision: Fiduciary out
</TABLE>
(a) Based on 45.3% current ownership by American General.
(b) Based on 71.2 million shares outstanding.
(c) Includes $274 million for 40% interest acquired December 23, 1994 and
130.1 million from September 17, 1996 acquisition of convertible preferred
(converted on May 20, 1997).
<PAGE>
Example of Fixed Price Collar
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
<S> <C>
WESTERN NATIONAL
Price per Share: $29.75
AMERICAN GENERAL
Price per Share (midpoint): $50.00
Exchange Ratio: .595x
Fixed Price Collar (AGC Price): + $3.00(6%)
-
- -----------------------------------------------------------------------------------
</TABLE>
Title of Graph: American General Shares Issued per Western National Share
(Stock Election)
[LINE GRAPH APPEARS HERE]
[The graph shows the number of shares of American General Common Stock to be
issued in exchange for each share of Western National Common Stock at different
prices of American General Common Stock, ranging from .6330 shares of American
General Common Stock at the price of such stock of $40.00 per share to .5181
shares of American General Common Stock at the price of such stock of $65.00 per
share.]
Title of Graph: Value Received per Average Western National Share
[LINE GRAPH APPEARS HERE]
[The graph shows value of the consideration to be received per one share of
Western National Common Stock at different prices of American General Common
Stock, ranging from $27.54 at the price of such stock of $40.00 per share to
$31.71 at the price of such stock of $65.00 per share.]
Note: Western National has walkaway rights below $40.00.
<PAGE>
Selected Issues to Consider Regarding Western National
- ------------------
POTENTIAL BENEFITS
- ------------------
. Western National's leadership position in bank distribution of fixed
annuities significantly enhances American General's distribution capabilities
. Positions American General as top 5 player in individual annuities
. Enables American General to distribute variable products through bank
channels
. Strong management team well known to American General
. Enhances "organic" growth rate of Company
. Anticipation of enhanced credit ratings and impact on Western's sales
. Loss of asset management fees and high switching costs if banks terminate
relationships
. Moderately accretive to EPS in first year
- ------------------------
POTENTIAL CONSIDERATIONS
- ------------------------
. Top 3 financial institution relationships account for 50% of premiums
. Continued competitive pressures on spreads
<PAGE>
Shares Traded at Specific Prices
3/6/97 - 9/5/97
<TABLE>
<CAPTION>
Ownership
- ---------
<S> <C>
American General: 45.3%
Institutional: 48.2
Management: 0.6
-----
Total Institutional: 94.1
Other (Retail) 5.9
-----
100.0%
</TABLE>
[BAR GRAPH APPEARS HERE]
[The graph shows various trading prices (ranging from $23.00 to $29.00) and
trading volumes (ranging from approximately 200,000 at lowest and highest
trading prices to approximately 1,600,000 at the trading prices between $26.50
to $27.00) for the shares of Western National Common Stock during the period
from March 6, 1997 to September 5, 1997.]
Weighted Average Price: $26.29
Total Shares Traded as a % of Shares Outstanding: 21.95%
Source: FactSet
<PAGE>
Selected Hypothetical Acquisition Targets(a)
($ in millions)
<TABLE>
<CAPTION>
COMPANY (PARENT) QUALIFIES FOR POOLING?
- ---------------------------------------------------------------------------------------------------------------------
<S> <C>
TOP 20 INDIVIDUAL VARIABLE ANNUITY WRITERS
1. Hartford Life No - 80+% Owned by Hartford Fire
2. Nationwide Life No - 80+% Owned by Mutual Parent
3. Lincoln National Life No - Line of Business, Restructuring
4. IDS Life (American Express) No - Subsidiary
5. Allianz Life No - Subsidiary of European Parent
6. Travelers Insurance No - Line of Business
7. Prudential No - Line of Business, Mutual
8. Fidelity Investments Life No - Subsidiary of FMR Group
9. North American Security Life (Manulife) No - Subsidiary of Mutual
10. Security Benefit Life No - Mutual
11. Allmerica Financial Life & Annuity No - Line of Business / Demutualization
12. Mass Mutual Life/Connecticut Mutual No - Line of Business in Mutual
13. Pacific Mutual No - Line of Business in Mutual
14. Merrill Lynch Life No - Subsidiary
15. Aetna Life & Annuity No - Line of Business
16. VALIC NA
17. Connecticut General (CIGNA) No - Line of Business
18. MONY Life No - Line of Business in Mutual
19. National Home No - Mutual
20. Life of Virginia (GE) No - Subsidiary
TOP 20 TOTAL INDIVIDUAL ANNUITY WRITERS
(COMPANIES NOT ON VARIABLE LIST ABOVE)
Allstate Life No - Subsidiary of Allstate, Line of Business
Jackson National Life (Prudential) No - Subsidiary of European Parent
Metropolitan Life/N.E. Mutual No - Line of Business in Mutual
USG Annuity & Life/F&G Life (Equitable of Iowa) No - Being Sold to ING
Keyport Life (Liberty Financial) No - Liberty Financial 80+% Owned by Mutual Parent
PFL Life (Aegon) No - Subsidiary
Transamerica (Occidental and L&A) No - Line of Business
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Source: Best's Policy Reports: Annuity Sales Results, July 1997
<PAGE>
Comparison of Proposed Transaction to Selected Transactions
<TABLE>
<CAPTION>
Accumulation Companies Life Companies
1993-PRESENT: 1996-PRESENT:
10 TRANSACTIONS 30 TRANSACTIONS
- ------------------------- PROPOSED ----------------------- ------------------------
Multiples Analysis TRANSACTION MEDIAN RANGE MEDIAN RANGE EIC
- -------------------------
- --------------------------------------------------------------------------------------------------------------------- -----
<S> <C> <C> <C> <C> <C> <C>
LTM Operating Earnings 19.5x 12.3x 9.4 - 19.2x 17.2x 10.6 - 30.5x 19.2
1997E Operating Earnings 16.9 17.3
GAAP Book Value 2.3 1.5 1.4 - 2.9 1.8 0.8 - 4.6 2.7
(Ex-115)
Statutory Capital and Surplus 3.7 2.3 1.2 - 5.4 3.0 1.2 - 6.1 3.9
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL INSTITUTIONS: ALL COMPANIES:
40-60% PRIOR OWNERSHIP 40-100% PRIOR OWNERSHIP
1990-1997: 4 TRANSACTIONS 1990-1997: 47 TRANSACTIONS
PROPOSED --------------------------- ---------------------------
Premiums to Market and Selected Buyouts TRANSACTION MEDIAN RANGE MEDIAN RANGE
- ---------------------------------------------------------------- ----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Premium to Closing Price Day Prior To
Announcement 5.8% 17.9% 1.2-25.6% 19.4% (11.1%)-68.9%
- ---------------------------------------------------------------- ----------------------------------------------------------
</TABLE>
<PAGE>
Pro Forma Merger Analysis
$29.75 per Share Deal Price; Purchase Accounting
<TABLE>
<CAPTION>
Pre-acquisition 50% Stock/50% Debt
---------------------------------------------------------------------------
<S> <C> <C>
EPS 1998E $4.00 $4.02
Accretion/(Dilution) 0.5%
EPS 1999E $4.44 $4.49
Accretion/(Dilution) 1.1%
ROAE 1998 14.0% 14.1%
Book Value Per Share $28.04 $27.30
Accretion/(Dilution) (2.6)%
---------------------------------------------------------------------------
</TABLE>
Key Assumptions:
---------------
Pre-tax cost savings of $13.0 million phased in 100% in 1998.
Goodwill of $617.45 million amortized over 40 years.
Marginal tax rate of 35% and an opportunity cost of cash of 7.50%.
