SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 28, 1997
Advanta Corp.______________________________
(Exact name of registrant as specified in its charter)
Delaware 0-14120 23-1462070
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
Welsh & McKean Roads, Spring House, Pennsylvania 19477
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (215) 657-4000
Former name or former address if changed since last report
<PAGE>
Item 5. Other Events
Company Announcements.
On October 28, 1997, Advanta Corp. (the "Company")
announced that it has reached a definitive
agreement under which Fleet Financial Group
("Fleet") will acquire the Company's consumer
credit card business and will combine it with
Fleet's consumer credit card business. The
Company will continue to operate its mortgage and
business services companies.
The Company intends to seek shareholder approval
and the transaction is subject to regulatory
approval. The transaction, which is expected to
close by late 1997 or early 1998, is anticipated
to have a total value to the Company of
approximately $1.3 billion, including an after tax
gain of approximately $500 million.
The Company also announced that it intends to make
a tender offer to repurchase between $750 to $850
million of the Company's common stock in 1998,
following the closing of the transaction. The
Company presently expects the tender offer to be
at a price between $40 and $45 per share.
The Company also announced that Dennis Alter will
resume his long-held position as Chief Executive
Officer of Advanta. Alex "Pete" Hart, former
Chief Executive Officer, and Jim Allhusen, Group
Executive of Advanta Personal Payment Services,
are leaving to pursue other interests.
This Report on Form 8-K contains forward-looking
statements, including but not limited to
projections of future earnings, that are subject
to certain risks and uncertainties that could cause actual results
to differ materially from those projected. The most significant
among those risks and uncertainties are: (1) the
Company's managed net interest margin, which in
turn is affected by the Company's success in
originating new credit card accounts, the
receivables volume and initial pricing of new
accounts, the impact of repricing existing
accounts and account attrition, the mix of account
types and interest rate fluctuations; (2) the
level of delinquencies and charge-offs; and (3)
the level of expenses. Earnings also may be
affected by factors that affect consumer debt,
competitive pressures and the ratings on debt of
the Company and its subsidiaries. The
<PAGE>
transaction described herein also may be affected
by factors which include the timing of closing as
well as contingencies. The proposed tender offer
also may be affected by factors which include the
closing of the transactions and the price at which
the Company's stock is trading at the time of the
proposed tender offer. Additional risks that may
affect the Company's future performance are
detailed in the Company's filings with the
Securities and Exchange Commission, including its
most recent Annual Report on Form 10-K and its
Quarterly Reports on Form 10-Q.
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(c) Exhibits.
20.1 Press Release of the Company, dated as of October 28, 1997.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of l934, the registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly
authorized.
Advanta Corp.
By: /s/ Elizabeth H. Mai
Elizabeth H. Mai,
Senior Vice President,
Secretary and General Counsel
October 28, 1997
<PAGE>
Index to Exhibits
Exhibit Description Page
20.1 Press Release of the Company, dated as of
October 28, 1997
<PAGE>
Exhibit 20.1
News Release
[ADVANTA LETTERHEAD]
Advanta
Corporation
Welsh & McKean Roads
Spring House, PA
19477-0844
97/10
Janet Point
Vice President, Investor Relations
(215) 444-5335
D'Arcy Rudnay
Vice President, Corporate Communications
(215) 444-5073
FOR IMMEDIATE RELEASE
FLEET TO ACQUIRE ADVANTA'S CONSUMER CREDIT CARD BUSINESS IN
A TRANSACTION VALUED AT APPROXIMATELY $1.3 BILLION,
INCLUDING $500 MILLION AFTER TAX GAIN
Advanta to Retain Rapidly Growing Mortgage and Business Services Units
Advanta to Buy Back Between $750 to $850 Million of Its Common Stock
Through a Tender Offer That is Presently Expected to Be Between
$40 to $45 Per Share
SPRING HOUSE, PA, October 28, 1997-- Advanta Corporation
(NASDAQ: ADVNB;
ADVNA) today announced that it has reached a definitive
agreement under which Fleet Financial Group (NYSE: FLT) will
acquire Advanta's consumer credit card business, and will
combine it with Fleet's consumer credit card business.
Advanta will continue to operate its fast-growing mortgage
and business services companies, which in 1996 had combined
net revenues of $172 million. For the first nine months of
1997, these businesses generated net revenues of $180
million compared to $120 million for the same period in
1996. This is a 49% increase over the comparable period in
1996.
Advanta intends to seek shareholder approval and the
transaction is subject to regulatory approval. The
transaction, which is expected to close by late 1997 or
early 1998, is anticipated to have a total value to Advanta
of approximately $1.3 billion, including an after tax gain
of approximately $500 million.
<PAGE>
Advanta also announced today that it intends to make a
tender offer to repurchase between $750 to $850 million of
Advanta common stock in 1998, following the closing of the
transaction. The Company presently expects the tender offer
to be at a price between $40 and $45 per share. Following
the tender offer, Advanta will be well-capitalized with a
book value of approximately $650 million with robust growth
expected in 1998. Advanta will have combined managed assets
of $8.4 billion and an additional $10.3 billion of mortgage
contracts serviced for a total of $18.7 billion.
Advanta's Chairman, Dennis Alter, said, "After considering a
wide variety of strategic alternatives, the board of
directors has approved this transaction which will allow
Advanta to redeploy its assets into its mortgage and
business services operations, while creating the most value
for Advanta's shareholders. I am also pleased that through
the repurchase of a substantial amount of Advanta common
stock we will be able to generate additional value to
shareholders."
"We are pleased that Fleet values the marketing, operations,
skills and expertise of Advanta's employees. Fleet has the
resources available to invest in the consumer credit card
operation, using it as the platform upon which it will
continue to grow a strong consumer credit card business,"
said Alter.
"As Advanta's chairman and largest shareholder, I am
personally excited about the future of the company. The
mortgage and business services operations have been
experiencing outstanding growth and posting impressive
results, and we expect that performance to continue. The
strengths of the management teams in mortgage and business
services provide a strong foundation for continued growth in
earnings in the coming years."
<PAGE>
Following the transaction, Advanta will be a highly-focused
financial services company that provides consumers and small
businesses with innovative products and services. The
company will retain its well-positioned corporate credit
card business, which is continuing to report strong growth,
as well as the two banks it owns, Advanta National Bank and
Advanta Financial Corp.
The company also announced today that Dennis Alter will
resume his long-held position as Chief Executive Officer of
Advanta. Alex "Pete" Hart, former Chief Executive Officer,
and Jim Allhusen,Group Executive of Advanta Personal Payment
Services, will be leaving to pursue other interests. Dennis
Alter remarked, "On behalf of the Board and shareholders we
thank them for their contribution to Advanta and wish them
well in their future endeavors."
Advanta's Personal Finance Services, with 1300 employees, is
a leading provider of non-conforming home equity loans to
consumers and a broad range of loan purchasing,
securitization and contract servicing services to the home
equity industry. It is one of the largest servicers in the
subprime mortgage industry. In 1997, the mortgage unit has
more than tripled its size with managed receivables
increasing dramatically to $4.6 billion, a 95% year-over-
year increase. The mortgage unit services $8.9 billion of
loans for third parties on a contract-for-fee basis,
bringing the total serviced portfolio to $13.5 billion. The
division originates home equity loans and lines of credit
via direct marketing, through a national system of 50
branches, and through a national network of mortgage
brokers.
<PAGE>
One of the nation's largest small ticket leasing companies,
Advanta's Business Services division provides unique
financial services to small and medium sized businesses
through flexible lease financing programs. The Company, with
600 employees, originates and services thousands of
commercial equipment leases through equipment dealers,
manufacturers, brokers and directly through end-users. In
1996, receivables expanded to $1.2 billion, a 66% year-over-
year increase. Loan originations and sales reached $379
million in the third quarter, a 52% increase from their $248
million level in last year's comparable period. Receivables
for the business card product are currently $606 million
versus $218 million last year.
This Press Release contains forward-looking statements,
including but not limited to projections of future earnings,
that are subject to certain risks and uncertainties that
could cause actual results to differ materially from those
projected. The most significant among these risks and
uncertainties are: (1) the Company's managed net interest
margin, which in turn is affected by the Company's success
in originating new credit card accounts, the
receivables volume and initial pricing of new accounts, the
impact of repricing existing accounts and account attrition,
the mix of account types and interest rate fluctuations; (2)
the level of delinquencies and charge-offs; and (3) the
level of expenses. Earnings also may be affected by factors
that affect consumer debt, competitive pressures and the
ratings on debt of the Company and its subsidiaries. The
transaction described herein also may be affected by factors
which include the timing of closing as well as
contingencies. The proposed tender offer also may be
affected by factors which include the closing of the
transaction and the price at which the Company's stock is
trading at the time of the proposed tender offer. Additional
risks that may affect the Company's future performance are
detailed in the Company's filings with the Securities and
Exchange Commission, including its most recent Annual Report
on Form 10-K and its Quarterly Reports on Form 10-Q.
