Filed by CII Financial, Inc. Pursuant to Rule 425 under the Securities Act of 1933 For: CII Financial, Inc. Commission file No.: 333-52726 CII FINANCIAL, INC. California Indemnity Insurance Company Commercial Casualty Insurance Company subsidiaries of Sierra Health Services, Inc. P. O. Box 15645, Las Vegas, Nevada 89114-5645 PRESS RELEASE FOR IMMEDIATE RELEASE CONTACTS: John Okita Andrew C. Karp Chief Financial Officer Managing Director (702) 242-7531 Banc of America Securities LLC High Yield Special Products (704) 388-4813 or (888) 292-0070 CII FINANCIAL MAKES ANNOUNCEMENT REGARDING OFFER FOR CONVERTIBLE SUBORDINATED DEBENTURES Las Vegas, May 3, 2001 - CII Financial, Inc. today announced that the limited cash portion of its tender and exchange offer for its $47 million of outstanding 7 1/2% convertible subordinated debentures due September 15, 2001 (CUSIP No. 12551LAB7) was oversubscribed and that, as a result, under the terms of the offer, all debentures tendered for cash would be purchased for a prorated portion of $20,000,000 of cash and for new 9 1/2% senior debentures due September 15, 2004. Pursuant to the offer, the Company said that $32,651,000 in aggregate principal amount of old debentures had been tendered for cash and $9,205,000 in aggregate principal amount of old debentures had been tendered for new 9 1/2% senior debentures. Accordingly, the Company will purchase $27,059,000 principal amount of old debentures for cash and issue $14,797,000 principal amount of new 9 1/2% senior debentures. The Company further announced that each holder who tendered for cash would receive cash for 82.873% of the holder's debentures tendered for cash at a price of $739.12 per $1,000 principal amount and would receive new 9 1/2% senior debentures for 17.127% of the holder's debentures tendered for cash. The Company said that settlement of the offer will be made as soon as practicable after expiration and that it will pay accrued but unpaid interest on the old debentures to the settlement date. Banc of America Securities LLC was the exclusive dealer manager for the offer. ---more---CII - Cash Pro-rate p. 2/2/2/2/2 CII Financial is a holding company primarily engaged in writing workers' compensation insurance in nine western and mid-western states through its wholly owned subsidiaries, California Indemnity Insurance Company, Commercial Casualty Insurance Company, Sierra Insurance Company of Texas and CII Insurance Company. CII Financial is a wholly owned subsidiary of Sierra Health Services, Inc. (NYSE:SIE), a diversified health care services company based in Las Vegas. Statements in this news release that are not historical facts are forward-looking and based on management's projections, assumptions and estimates; actual results may vary materially. Forward-looking statements are subject to certain risks and uncertainties, some of which may be found in the Prospectus and Exchange Offer and other documents filed with the Securities and Exchange Commission and which are incorporated herein by reference. Additional Information and Where to Find It: CII Financial, Inc. has filed a Registration Statement with the Securities and Exchange Commission on Form S-4 registering the new debentures to be issued in the exchange offer. The Registration Statement, which became effective on May 2, 2001, and the prospectus contained therein contain important information about CII Financial, the exchange offer and related matters. Security holders are urged to read the Registration Statement and the prospectus contained therein, CII Financial's Schedule TO and any other relevant documents filed by CII Financial with the SEC. Security holders are able to obtain copies of the Registration Statement on Form S-4 and the prospectus, CII Financial's Schedule TO and any other relevant documents for free through the Web site maintained by the SEC at http://www.sec.gov. In addition, these documents are available free of charge by contacting the Information Agent for the offer, D.F. King & Co., at (800) 735-3591. If you have any questions about the offer, please call the Dealer Manager for the offer, Banc of America Securities LLC, at (888) 292-0070. # # #
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Cii Financial Inactive 425Business combination disclosure
Filed: 4 May 01, 12:00am