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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 20, 1998
Advanta Corp.
(Exact name of Registrant as specified in its charter)
Delaware 0-14120 23-1462070
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(State or other juris- (Commission (IRS Employer
diction of incorporation File No.) Identification No.)
Welsh and McKean Roads, P.O. Box 844
Spring House, Pennsylvania 19477
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (215) 657-4000
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
On October 28, 1997, Advanta Corp., a Delaware corporation ("Advanta"),
entered into a Contribution Agreement with Fleet Financial Group, Inc., a Rhode
Island corporation ("Fleet") (the "Contribution Agreement").
A Special Meeting of stockholders of Advanta (the "Special Meeting") was
held on February 20, 1998 at Advanta's headquarters. At the Special Meeting,
holders of shares of Advanta Class A Common Stock and Class A Preferred Stock
were asked to vote upon a proposal to approve the contribution of the consumer
credit card business of Advanta to Fleet Credit Card, LLC, a Rhode Island
limited liability company (the "LLC") in exchange for a 4.99% interest in the
LLC, pursuant to the terms of the Contribution Agreement (the "Transaction").
Under the terms of the Contribution Agreement, Fleet would contribute its
consumer credit card business to the LLC in exchange for a 95.01% interest in
the LLC.
At the Special Meeting, 12,754,956 votes were cast in favor of approving
the Transaction, 53,954 votes were cast against the Transaction and 7,838 votes
cast to abstain.
The transactions contemplated by the Contribution Agreement were
consummated on February 20, 1998.
Pursuant to the terms of an Offer to Purchase dated January 20, 1998
(the "Offer to Purchase"), Advanta made a tender offer (the "Tender Offer") to
purchase 7,882,750 shares of its Class A Common Stock, including associated
Class A Purchase Rights (collectively, the "Class A Shares"), 12,482,850 shares
of its Class B Common Stock, including associated Class B Purchase Rights
(collectively, the "Class B Shares") and 1,078,930 shares of its Depositary
Shares each representing a one one-hundredth interest in a share of 6-3/4%
Convertible Class B Preferred Stock, Series 1995 (Stock Appreciation Income
Linked Securities (SAILS)) (the "SAILS Depositary Shares"). Advanta offered to
purchase the Class A Shares and Class B Shares each at a purchase price, net to
the seller, in cash of $40 per share and offered to purchase the SAILS
Depositary Shares at a purchase price, net to the seller, in cash of $32.80 per
share. The Tender Offer expired at 12:00 Midnight, New York City time on
February 20, 1998 (the "Expiration Date").
As of the Expiration Date, subject to final verification, approximately
all of the outstanding Class A Shares, Class B Shares and SAILS Depositary
Shares were tendered in accordance with the terms of the Offer to Purchase. A
large number of the shares tendered were through Notices of Guaranteed Delivery.
Depending on the number of shares ultimately delivered and the number of odd
lots included in those deliveries, the proration factor for shares purchased may
change.
As more shares were tendered than the amount sought to be purchased by
Advanta, the shares were purchased on a pro rata basis. The preliminary
proration factor for shares purchased is expected to be 43% for the Class A
Shares, 43% for the Class B Shares and 43% for the SAILS Depositary
Shares. The final proration factor will be announced as soon as it is available.
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On February 21, 1998, Advanta issued a press release relating to the
consummation of the transactions contemplated by the Contribution Agreement, a
copy of which is filed herewith as Exhibit 99.1.
On February 23, 1998, Advanta issued a press release relating to the
shares purchased by Advanta pursuant to the Offer to Purchase, a copy of which
is filed herewith as Exhibit 99.2.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Business Acquired.
Not applicable.
(b) Pro Forma Financial Information.
Not applicable.
(c) Exhibits.
Exhibit 99.1 Press Release dated February 21, 1998.
Exhibit 99.2 Press Release dated February 23, 1998.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Advanta Corp.
(Registrant)
Date: February 24, 1998
By: /s/ Elizabeth H. Mai
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Elizabeth H. Mai
Senior Vice President,
Secretary and General Counsel
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Description Method of Filing
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<S> <C> <C>
99.1 Press Release dated February 21, 1998. Filed electronically herewith.
99.2 Press Release dated February 23, 1998. Filed electronically herewith.
</TABLE>
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[Advanta Logo] EXHIBIT 99.1
For further information News Release
please contact:
Investor Relations
(215) 444-5335
Corporate Communications Advanta Corporation
(215) 444-5073 Welsh & McKean Roads
P.O. Box 844
Spring House, PA 19477-0844
FOR IMMEDIATE RELEASE
ADVANTA COMPLETES TRANSACTION WITH FLEET TO ACQUIRE ADVANTA'S
CONSUMER CREDIT CARD UNIT
Advanta to Buy Back $850 Million of Its Shares
SPRING HOUSE, PA, February 21, 1998 -- Advanta Corporation (NASDAQ, ADVNB,
ADVNA, ADVNZ) announced that at its Special Meeting of Stockholders held
yesterday in Spring House, Pennsylvania, stockholders approved the transaction
with Fleet Financial Group to acquire Advanta's consumer credit card business.
The transaction was completed at the end of business yesterday. The transaction
had a total value to Advanta of approximately $1.3 billion, including an
after-tax gain of approximately $500 million.
Advanta also announced that it successfully completed its cash Tender Offer to
purchase approximately $850 million of its Class A and Class B common stock at
$40 per share net, and its Stock Appreciation Income Linked Securities (SAILS)
Depositary Shares at $32.80 per share net. The Offer commenced on January 20,
1998 and expired at 12:00 midnight, New York City time on February 20, 1998.
Advanta's Chairman, Dennis Alter, said, "We are very pleased that our
shareholders have overwhelmingly voted to support the Fleet transaction. This
transaction and the Tender Offer to repurchase shares enables Advanta to
generate significant value for our shareholders. Following the Tender Offer,
Advanta will be well capitalized with a book value of approximately $650
million with robust growth expected in 1998 from the mortgage and business
services operations."
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The Tender Offer was oversubscribed as to each class of shares and the SAILS
Depositary Shares. Preliminary proration results of this Tender Offer will be
announced as soon as practicable. Payment will be completed promptly for all
shares properly tendered and accepted, subject to proper delivery of shares in
accordance with the terms of the Tender Offer.
Following the transaction, with 2,200 employees, approximately $6.6 billion in
managed assets and an additional $9.2 billion in assets serviced for third
parties, Advanta will be a highly focused financial services company that
provides consumers and small businesses with innovative products and services.
The company will also retain its two banks, Advanta National Bank and Advanta
Financial Corp.
Advanta Personal Finance Services, with approximately 1,300 employees, is a
leading provider of nonconforming home equity loans to consumers, and a broad
range of loan purchasing, securitization and contract servicing services to the
home equity industry. In 1997, the mortgage unit more than doubled its size
with managed receivables increasing to $5.3 billion, a 93% year-over-year
increase, and loans serviced for third parties increasing dramatically to $9.2
billion, a 149% year-over-year increase. The mortgage unit is one of the
largest servicers of third party loans on a contract-for-fee basis in the
nonconforming mortgage industry.
Advanta Business Services, with approximately 600 employees, provides niche
financial services to small businesses through flexible lease financing
programs and corporate credit cards. In 1997, combined lease and corporate card
receivables expanded to $1.3 billion, a 53% year-over-year increase.
This Press Release contains forward-looking statements 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) factors that affect consumer debt; (2) competitive
pressures; (3) the level of delinquencies and charge-offs; (4) the rate of
prepayments; (5) the level of expenses; (6) the timing of the securitizations
of the Company's receivables; and (7) the ratings on the debt of the Company
and its subsidiaries. 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.
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[Advanta Logo] EXHIBIT 99.2
For further information News Release
please contact:
Investor Relations
(215) 444-5335
Corporate Communications Advanta Corporation
(215) 444-5073 Welsh & McKean Roads
P.O. Box 844
Spring House, PA 19477-0844
FOR IMMEDIATE RELEASE
ADVANTA ANNOUNCES PRELIMINARY RESULTS OF $850 MILLION TENDER OFFER
SPRING HOUSE, PA, FEBRUARY 23, 1998 -- Advanta Corporation (NASDAQ: ADVNB;
ADVNA, ADVNZ) today announced the successful completion of the Company's Tender
Offer to repurchase $850 million of common stock and depositary shares, and the
preliminary count by First City Transfer Company, the Depositary for the
Company's Tender Offer. Based on the preliminary count, subject to final
verification, approximately all of the outstanding shares of each class of
shares sought in the Tender Offer were tendered.
Advanta's Chairman, Dennis Alter, said "I am pleased that through the
repurchase of such a substantial amount of Advanta shares we will be able to
distribute approximately $850 million to Advanta shareholders. With the
closing of the Fleet transaction to acquire Advanta's consumer credit card
company and the successful completion of this share repurchase Advanta is well
positioned to produce solid, consistent earnings growth and to maximize on the
leadership positions of our mortgage and leasing operations."
The Tender Offer to purchase approximately 7,882,750 shares of its Class A
Common Stock and 12,482,850 shares of its Class B Common Stock, both at $40 per
share net,
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and approximately 1,078,930 shares of its Stock Appreciation Income Linked
Securities (SAILS) Depositary Shares at $32.80 per share net, expired at 12:00
midnight, New York City time on February 20, 1998. As more shares were tendered
than the amount sought in the Tender Offer, those shares were purchased pro
rata. Based on the preliminary count, the pro ration of shares purchased is
expected to be approximately 43% for the Class A Common Stock, approximately 43%
for the Class B Common Stock and approximately 43% for the Stock Appreciation
Income Linked Securities (SAILS) Depositary Shares. A large number of the shares
tendered were through Notices of Guaranteed Delivery. Depending on the number of
shares ultimately delivered and the number of odd lots included in those
deliveries, the proration of shares purchased may change. First City Transfer
Company is expected to promptly calculate the final proration percentages upon
completion of the final count. Payment will be completed promptly for all shares
properly tendered and accepted, subject to proper delivery of shares in
accordance with the terms of the Tender Offer.
With 2,200 employees, approximately $6.6 billion in managed assets and an
additional $9.2 billion in assets serviced for third parties, Advanta is a
financial services enterprise that services consumers and small businesses
through innovative offerings of mortgages, leases, corporate credit cards,
insurance and deposit products.
