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[H&R BLOCK LETTERHEAD]
EXHIBIT 99.1
EXHIBIT 99.1 TO FORM 8-K
[H&R BLOCK NEWS RELEASE]
H&R BLOCK TO ACQUIRE OLDE FINANCIAL CORPORATION
ACCELERATES BLOCK'S STRATEGY TO OFFER FINANCIAL PRODUCTS AND SERVICES
FOR RELEASE SEPT. 1, 1999
KANSAS CITY, Mo. -- H&R Block Inc. (NYSE:HRB) today announced it has
reached a definitive agreement to acquire Olde Financial Corporation (Olde),
parent company of Olde Discount Corporation, the fourth largest discount
broker in the United States, for a purchase price of $850 million in cash.
Olde Financial Corporation, based in Detroit, Michigan, offers
brokerage and other financial services through Olde Discount's network of
approximately 1,200 registered representatives located in 181 branch offices
in 35 states. The company currently has more than 600,000 active accounts
with an aggregate equity in excess of $37 billion. For the six months ending
June 30, 1999, Olde reported revenues and pro forma net earnings of $171.5
million and $33.2 million respectively. Assuming the inclusion of six months
of operations in H&R Block's fiscal 2000 results, Olde is expected to provide
earnings per share accretion of 6 cents to 8 cents, and cash earnings per
share accretion of 18 cents to 20 cents in fiscal 2000. In fiscal 2001, the
transaction is expected to provide 20 cents to 30 cents earnings per share
accretion, and 45 cents to 55 cents cash earnings per share accretion.
The acquisition is a significant step in H&R Block's strategy to grow
its business by providing a wider range of financial products and services to
its tax clients as well as to a broader base of customers. Block customers
will have access to a full array of investment services - including
securities trading, mutual funds and investment research - through Olde
Discount's office network and via online services. The addition of these
capabilities will complement Block's existing operations in tax preparation,
financial planning, accounting and consulting, and mortgage origination and
will accelerate its creation of a powerful branded financial services
platform.
"With the acquisition of Olde, we will have in place the major building
blocks to achieve our vision of becoming the preferred tax and financial
partner for our clients while offering an attractive product portfolio for
new Block customers," said Frank L. Salizzoni, H&R Block's president and
chief executive officer.
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"Over the last several years, we have pursued a strategy to expand into
new financial markets by leveraging our strong brand name and our existing
network of nearly 9,000 retail locations serving more than 16 million U.S.
tax customers," Salizzoni continued.
A key element of Block's financial services strategy was the
introduction and testing of H&R Block Financial Centers in four markets
during the 1999 tax season. Block plans to open up to 70 additional Financial
Centers, which offer financial planning and investment services, home
mortgages and tax preparation, by the end of 1999.
"The Olde acquisition will strengthen our Financial Center initiative
by providing the back office infrastructure, management experience and
product breadth for H&R Block to grow aggressively our investment advisory
business to meet our customers' needs," said Mark A. Ernst, Block's executive
vice president and chief operating officer. "The acquisition will enable us
to accelerate significantly the company's future earnings from financial
services."
"Olde shares H&R Block's commitment to making high-quality financial
services affordable," said Randal J. Mudge, chief executive officer of Olde
Financial Corporation. "Combining Olde's experience with Block's network of
offices will make full-service discount brokerage services more accessible
for millions of customers. It also will broaden opportunities for employees
of both companies."
Under its financial services strategy, Block is also building a
national accounting, tax and consulting practice and has acquired the
non-attest assets of McGladrey & Pullen, LLP, and seven other accounting
firms. In addition, Block has developed capabilities in retail mortgage
origination through H&R Block Mortgage Company and Assurance Mortgage
Corporation of America. Together with H&R Block's tax business, these
capabilities will enable the company to offer a full range of financial
products and services to a broader customer base. Block is also developing an
e-commerce strategy that will incorporate Olde's online investing capability.
Ernest J. Olde founded Olde Discount Corporation in 1971 and Olde
Financial Corporation in 1986. Although currently chairman of the board, he
has not been involved in the company's management since 1995 and will have no
ties with the company upon completion of the transaction.
The transaction, which is subject to regulatory approvals and other
normal closing conditions, is expected to be completed by the end of the
calendar year. The information contained in this press release may contain
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. Such statements are based upon current information, expectations,
estimates and projections regarding H&R Block Inc., Olde, and the industries
and markets in which H&R Block and Olde operate, and management's
assumptions and beliefs relating thereto. Words such as "will," "expects,"
"intends" and variations thereof and similar expressions are intended to
identify such forward-looking statements. These statements speak only as of
the date on which they are made, are not guarantees of future performance,
and involve certain risks, uncertainties and assumptions that are difficult
to predict. Therefore, actual outcomes and results could materially differ
from what is expressed, implied or forecast in such forward-looking
statements. Such differences could be caused by a number of factors
including, but
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not limited to, the uncertainty of the satisfaction of all closing conditions
set forth in the definitive agreement and the completion of the Olde
transaction; the uncertainty that the acquisition will be accretive to
earnings and the extent of any accretion to earnings; changes in economic,
political or regulatory environments; changes in competition and the effects
of such changes; changes in strategies; Block's inability to successfully
implement its strategies; and risks described from time to time in reports
and registration statements filed by Block and its subsidiaries with the
Securities and Exchange Commission. Readers should take these factors and
risks into account in evaluating any such forward-looking statements. Block
undertakes no obligation to update publicly or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise.
Founded in 1955, H&R Block is a diversified company providing a wide
range of financial products and services through its subsidiaries. H&R Block
Tax Services Inc. served 18.9 million taxpayers in more than 10,000 offices
located primarily in the United States, Canada, Australia and the United
Kingdom in 1999. Option One Mortgage Corporation, Assurance Mortgage
Corporation of America and H&R Block Mortgage Company offer a full range of
home mortgage products. Through RSM McGladrey Inc. and HRB Business Services
Inc., the company has built a national accounting, tax and consulting firm.
Block Financial Corporation develops and publishes consumer financial and
personal productivity software, such as Kiplinger TaxCut(R). Quarterly
resultS and other information regarding H&R Block are available on the
company's web site at www.hrblock.com.
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