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: July 11, 1997 Commission File No. 1-11453
(Date of earliest event reported)
AMERICAN FINANCIAL GROUP, INC.
Incorporated under IRS Employer
the laws of Ohio Identification No. 31-1422526
One East Fourth Street
Cincinnati, Ohio 45202
Phone: (513) 579-2121
Former name or former address, if changed since last report - not appl
icable.
AMERICAN FINANCIAL GROUP, INC.
FORM 8-K
Item 5. Other Events.
On July 11, 1997, American Financial Group, Inc. entered
into agreements with two of its subsidiaries, American Financial
Corporation and American Financial Enterprises, Inc. pursuant to
previously announced plans to reduce its corporate expenses and
improve its corporate capital structure. Please see the News
Release attached hereto as Exhibit 1.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(a) Not Applicable
(b) Not Applicable
(c) Exhibit (99) Additional Exhibits.
(1) American Financial Group, Inc. News Release
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
AMERICAN FINANCIAL GROUP, INC.
July 14, 1997 By: James C. Kennedy
James C. Kennedy
Deputy General Counsel & Secretary
Exhibit 1
AMERICAN FINANCIAL GROUP, INC. NEWS RELEASE
__________________________________________________________________
Date: July 11, 1997 Contact: Anne N. Watson
For Release: Immediately Phone: (513) 579-6652
Web Site: http://www.amfnl.com
AMERICAN FINANCIAL GROUP
ANNOUNCES SIGNING OF MERGER AGREEMENTS
(Cincinnati, Ohio) American Financial Group, Inc. (NYSE:
AFG) announced today that it has entered into agreements with two
of its subsidiaries, American Financial Corporation ("AFC") and
American Financial Enterprises, Inc. ("AFEI") pursuant to
previously announced plans to reduce its corporate expenses and
improve its corporate capital structure.
The AFC Merger
AFG owns 100% of the common stock and 76% of the voting
equity securities of AFC. AFC has two series of publicly-held
voting preferred stock, Series F and Series G, both listed on the
Pacific Exchange, which together represent approximately 24% of
AFC's voting securities.
Under the AFC merger agreement, AFC will merge with a wholly-
owned subsidiary pursuant to which each share of Series F
Preferred Stock will be converted into the right to receive
$22.35 per share and each share of Series G Preferred Stock will
be converted into the right to receive $10.50 per share. The
aggregate merger consideration to be received by a holder would
be payable, at the holder's election, either in cash, in shares
of a new AFC Series J Preferred Stock, or a combination of the
two. The transaction has been structured to be tax-free to AFC
Preferred Shareholders receiving solely Series J Preferred Stock
in the merger.
While the basic terms of the transaction remained the same
as those announced on April 23, 1997, subsequent negotiations
between AFG and a Special Committee of AFC's Board of Directors
did result in an increase in the amount of consideration to be
received by holders of Series F Preferred Stock.
Holders of Series J Preferred Stock will hold approximately
23% of the voting power of AFC after the AFC Merger, which has
been structured to be tax free to current AFC preferred
stockholders receiving solely shares of Series J Preferred Stock.
The Series J Preferred Stock will be redeemable, at AFC's option,
at 103% of principal amount after the eighth anniversary of its
issuance, declining to 101.5% of principal amount after the ninth
anniversary and 100% of principal amount after the tenth
anniversary of its issuance. It will have a liquidation value of
$22.35 per share and an annual dividend of $1.90 per share, paid
on a semi-annual basis. The Merger Agreement requires that
approximately $70.4 million in liquidation value of the new
Preferred Stock be issued in the transaction. If the Series J
Preferred Stock alternative is over-subscribed, holders will be
allocated shares on a pro-rata basis.
The AFEI Merger
AFG currently owns approximately 83% of the outstanding
common stock of AFEI. Under the AFEI merger agreement, all
publicly-held shares of AFEI will be exchanged for (i) shares of
new AFG common stock, on a one-for-one basis, or (ii) $37.00 per
share in cash, at the option of AFEI shareholders. There are
approximately 2.7 million shares of AFEI common stock outstanding
(including yet-unexercised employee stock options) which are not
beneficially owned by AFG. The AFEI merger has been structured
to be tax-free to AFEI shareholders who receive solely shares of
common stock of the new holding company in the AFEI merger.
The AFG Reorganization
In conjunction with the AFEI merger, AFG shareholders will
be asked to approve an AFG plan of reorganization that provides
that a new holding company be formed which would be the ultimate
parent entity of AFG and all of its subsidiaries, and which would
be the issuer of the new AFG stock in exchange for AFEI common
stock. No material change in AFG's financial statements or in
the rights of its security holders would occur as a result of
such a reorganization.
The cash to be utilized if the proposed transactions are
completed is expected to come from internally generated funds and
existing credit lines. The transactions are subject to
shareholder approval.
This announcement does not constitute a solicitation of
proxies or consents of AFC, AFEI or AFG shareholders, which will
only be made by means of prospectus/proxy statements relating to
the proposals which are expected to be filed with the Securities
and Exchange Commission within the next week.
American Financial Group Inc. is engaged primarily in
specialty and multi-line property and casualty insurance
businesses and in the sale of tax-deferred annuities and certain
life and health insurance products.
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