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Exhibit 99(k)
PRESS
RELEASE
Contact: Dennis Beaulieu
(603) 640-2206
UPDATE ON CGU ACQUISITION
HAMILTON, Bermuda, February 20, 2001 -- White Mountains announced today that it
has reached agreement with CGNU plc regarding certain modifications to their
stock purchase agreement dated September 25, 2000, relating to White Mountains'
purchase of CGNU's U.S. property and casualty operations, CGU.
As a result of an analysis of the reserve position of CGU as part of its
year-end financial close, CGU strengthened its December 31, 2000 reserves and
purchased reinsurance to provide some protection against further adverse
developments. These actions led to the modifications to the stock purchase
agreement in order to facilitate timely satisfaction of the conditions to the
transaction. The principal changes to the agreement include $200 million of pre-
closing adjustments to be borne by CGNU, an increase of $50 million in the
amount of the portion of the purchase price represented by the seller note,
certain favorable changes in the terms of the seller note, an increase of at
least $125 million in White Mountains' equity investment in the CGU acquisition
company and the purchase of reinsurance coverage at closing to further protect
CGU's reserves.
As before, the transaction is subject to regulatory and other customary
approvals, including receipt of funding under White Mountains' financing
commitments. Lehman Brothers, who is arranging the senior bank financing, has
reaffirmed its commitment to provide the senior bank financing, although the
terms of such financing have been modified in light of the amendment to the
stock purchase agreement, including a reduction of the aggregate principal
amount of the facilities to $875 million. White Mountains will use existing
resources and commitments to complete the acquisition. The terms of the equity
financing commitments that White Mountains had received have not changed. White
Mountains remains enthusiastic and committed to the transaction and expects that
it will close in April 2001.
White Mountains is a Bermuda-domiciled financial services holding company traded
on the New York Stock Exchange under the symbol WTM. Additional financial
information and other items of interest are available at the company's web site
located at www.whitemountains.com. Copies of the amendment to the stock purchase
agreement and the summary of the terms and conditions of the modified Lehman
financing commitment will be filed with the Securities and Exchange Commission
on a Form 8-K.
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CORPORATE HEADQUARTERS:
WHITE MOUNTAINS INSURANCE GROUP, LTD.
12 CHURCH STREET, SUITE 322
HAMILTON, HM 11 BERMUDA 441-296-6011
EXECUTIVE OFFICES:
WHITE MOUNTAINS INSURANCE GROUP, LTD.
80 SOUTH MAIN STREET, HANOVER, NH 03755
PH: 603-643-1567 * FAX: 603-643-4562
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This press release contains forward looking statements within the meaning of the
"safe harbor" provisions of the United States Private Securities Litigation
Reform Act of 1995. White Mountains cautions that a number of important factors
could cause actual results to differ materially from the plans, objectives,
expectations, estimates and intentions expressed in forward-looking statements
made by White Mountains. These factors include: (i) competitive forces,
including the conduct of other property and casualty insurers and reinsurers,
(ii) changes in domestic or foreign laws or regulations applicable to White
Mountains, its competitors or its clients, (iii) an economic downturn or other
economic conditions (such as a rising interest rate environment) adversely
affecting White Mountains' financial position, (iv) loss reserves established by
White Mountains subsequently proving to have been inadequate and (v) the failure
of the acquisition of CGU to be consummated. White Mountains cautions that the
foregoing list of important factors is not exhaustive. In any event, such
forward-looking statements made by White Mountains speak only as of the date on
which they are made, and White Mountains does not undertake any obligation to
update or revise such statements as a result of new information, future events
or otherwise.
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CORPORATE HEADQUARTERS:
WHITE MOUNTAINS INSURANCE GROUP, LTD.
12 CHURCH STREET, SUITE 322
HAMILTON, HM 11 BERMUDA 441-296-6011
EXECUTIVE OFFICES:
WHITE MOUNTAINS INSURANCE GROUP, LTD.
80 SOUTH MAIN STREET, HANOVER, NH 03755
PH: 603-643-1567 * FAX: 603-643-4562