Exhibit 99.1
DANIELSON HOLDING CORPORATION
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767 THIRD AVENUE . NEW YORK, NY 10017-2023
Tel: 212-888-0347 . Fax: 212 888-6704
FOR IMMEDIATE RELEASE
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Contact: C. Kirk Rhein, Jr.
President & Chief Executive Officer
212/888-0347
DANIELSON HOLDING TO ACQUIRE MIDLAND FINANCIAL GROUP
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New York City - February 27, 1996
Danielson Holding Corporation (DHC-AMEX) announced today that it has entered
into a merger agreement pursuant to which Danielson will acquire all of the
outstanding stock of Midland Financial Group, Inc. (MDLD-NASDAQ) in a merger
transaction. The purchase price will be 1.6 times the 1995 year-end book value
of Midland (or a purchase price of $14.50 per Midland share, based upon
Midland's current estimated year-end book value of approximately $9.06 per
share). As part of the transaction, Danielson will make a $30 million capital
contribution to Midland at the closing.
The consideration to be received by the Midland shareholders will be paid 50% in
cash,40% in DHC non-convertible preferred stock having a market dividend rate,
and 10% in DHC common stock to be valued based upon a trading average prior to
the closing date. Danielson will finance the cash portion of the purchase price
and the $30 million capital contribution with the net proceeds of an
underwritten public offering of DHC common stock to raise approximately $80
million, which will close concurrently with the acquisition. The DHC public
offering will be made as soon as possible and currently is anticipated to occur
during the second quarter of 1996.
Midland is engaged primarily in non-standard automobile insurance and related
activities in 16 states located primarily in the southern and western United
States. Danielson anticipates that operating management of Midland will remain
with the business following the merger.
Mr. C. Kirk Rhein, Jr., President and Chief Executive Officer of Danielson,
stated: "We believe that both Midland and Danielson will benefit from operating
synergies and efficiencies between our businesses and operations. Danielson
anticipates that the transaction will have many positive effects for the
acquired company, including particularly providing support for Midland's Best's
rating at the time of closing. In addition, we believe that the availability of
Danielson's $1.4 billion net operating tax loss carryforward will enable Midland
to enhance its results through a shift in its investment portfolio to higher
yielding instruments, as well as by offsetting Midland's
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pre-tax operating income. We currently contemplate that Danielson will make a
positive accounting adjustment to our stockholders' equity at the closing of the
transaction to recognize a portion of our net operating loss carryforward."
The closing of the transaction is subject to various conditions, including
approvals by the shareholders of both companies, the receipt of regulatory
approvals, and financing. No assurance can be given that the conditions to the
transaction can be satisfied or that the transaction will be completed. The
public offering to be made by Danielson in connection with the merger
transaction will be made after receipt of shareholder approval of the
transaction and will be made only by means of a prospectus.
Danielson Holding Corporation is an American Stock Exchange listed company,
engaging in financial services businesses through its subsidiaries, including
insurance and trust and investment services.
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