EXHIBIT 99.1
FOR IMMEDIATE RELEASE CONTACT: Ed Dunn/Nuveen
ATTN: Business/Financial Editors (312) 917-7763
Kimberly Jackson/Flagship
(513) 461-0332
NUVEEN TO ACQUIRE FLAGSHIP RESOURCES, INC.
Flagship to Merge Its Mutual Fund Business with Nuveen
CHICAGO, July 16, 1996 -- The John Nuveen Company and
Flagship Resources Inc. announced today that they have entered
into an agreement for Nuveen to acquire Flagship and for the
two firms to merge their tax-exempt mutual fund businesses.
Nuveen manages more than $47 billion in assets, including
$31 billion in funds and $16 billion in unit trusts. Flagship,
located in Dayton, Ohio, manages about $4.4 billion in assets,
mainly in its 27 tax-exempt mutual funds.
Commenting on the merger, Nuveen Chairman Timothy R.
Schwertfeger said: "For nearly a century, Nuveen has been
dedicated to serving the investment needs of conservative
investors and their financial advisers. The addition of
Flagship widens the range of municipal investments we can offer
to these investors to meet their needs for asset preservation
and tax-free income. After the merger, the combined firms will
have state-specific mutual funds, exchange-traded funds, or
unit trusts in 28 states. In addition, intermediate term and
limited term funds will be available nationally and in selected
states. This means more options for designing portfolios to
match individual preferences."
Flagship Chairman Bruce Bedford noted that "Flagship
has decided to merge with Nuveen after careful analysis of
potential strategic partners in the mutual fund industry. We
have been very successful and by joining Nuveen we can reach a
new level of growth at a time of ever increasing competition."
Mr. Bedford went on to note that "Nuveen has a name
that is trusted and respected. It brings financial strength, a
first rate research department, and a history of excellent
management. Nuveen has recognized our focus on service and the
effectiveness of our employees, so by joining Nuveen we can
provide for the ongoing growth of the funds and continuing high
quality services for the financial advisers and investors we
serve."
All of the stock of Flagship will be exchanged for
cash and preferred stock that can be converted into
1.65 million shares of Nuveen common stock. The total price of
the transaction is $63 million. In addition, contingent
payments which are entirely dependent on significant growth
from the combined mutual funds could amount to $20 million over
four years. The transaction, which will close by year end, has
been approved by the Board of Directors of the Flagship funds
and is contingent upon the approval of the Flagship mutual fund
shareholders.
In addition to the merger of the two businesses,
Nuveen and Flagship are also proposing to merge their funds in
eight states where both currently offer tax-exempt mutual
funds. "Our aim is to add to the level of tax-free income for
fund investors by increasing the efficiency of our funds,
wherever possible," added Mr. Schwertfeger.
In May of this year, Nuveen announced its intention
to introduce conservatively managed equity funds in affiliation
with Chicago-based Institutional Capital Corporation (ICAP).
The introduction of an all-stock fund, a taxable balanced fund,
and a balanced municipal and stock fund is slated for later in
the year.
Commenting further on these actions, Mr. Schwertfeger
said that: "The addition of Flagship complements our
previously announced affiliation with ICAP. Our aim is to
serve a broader range of the investment needs of conservative
investors. These investors, and their advisers, need equity
and fixed-income choices from which they can construct a
portfolio that balances asset preservation, income and growth.
Our new funds extend our offerings into equity products while
Flagship broadens our menu of municipal offerings. In
addition, Flagship's exclusive focus on the distribution of
mutual funds, and the expertise this brings, will help us build
our entire mutual fund line of business."
"Nuveen and Flagship share a similar view of research
and portfolio management, emphasizing a conservative, value-
oriented approach," added Mr. Bedford. "This shared investment
philosophy was very important in our decision. Investors can
be assured of the same basic investment style. In addition,
they will have the opportunity to select from a wider mix of
funds and will benefit from the combined strengths of the two
firms."
Separately, Nuveen also announced today a program to
purchase up to 3.5 million of its outstanding common shares, as
well as a 17 percent increase in the quarterly dividend from
$0.18 to $0.21 per common share.
Nuveen, founded in 1898, is headquartered in Chicago
with offices in 12 other locations. Nuveen specializes in
investment products and services for conservative investors and
their financial advisers, as well as providing municipal and
corporate investment banking services. Since 1961, Nuveen has
sponsored more than $61 billion in tax-free funds and trusts
for more than 1,200,000 investors. The John Nuveen Company is
listed on The New York Stock Exchange and trades under the
symbol "JNC."
Flagship is a specialist in the management of fixed-
income portfolios, with an expertise in municipal bonds,
distributed through broker/dealers. Started in 1970 as the
money management division of the Mead Corporation, Flagship was
acquired in a management buyout in 1984 by Bruce Bedford and
Richard Davis, now Chairman and President, respectively.
Flagship currently manages approximately $4.4 billion in assets
in 31 mutual funds for over 100,000 investors. Flagship, which
was advised by Smith Barney on the transaction, is
headquartered in Dayton, Ohio.
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