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Meridian's Board Unanimously Rejects Hostile Tender Offer

11 September 2000

Meridian Insurance Group, Inc.'s Board Unanimously Rejects Hostile Tender Offer

    INDIANAPOLIS--Sept. 11, 2000--Meridian Insurance Group, Inc., announced that on September 8, 2000, its Board of Directors met and unanimously recommended that MIGI's shareholders reject the recent $20.00 per share tender offer and not tender any of their shares.
    In response to the hostile tender offer commenced on August 31, 2000, by Gregory M. Shepard, through Meridian Insurance Group Acquisition Corporation (Bidder) and its parent American Union Insurance Company (AUIC), Norma J. Oman, President and Chief Executive Officer of MIGI sent a letter to the shareholders on behalf of the Board of Directors summarizing the reasons for the Board's recommendation not to tender any of their shares.
    According to the letter, the Board concluded that the offer does not reflect MIGI's inherent value. The Board further elaborated, that MIGI's largest shareholder, Meridian Mutual, and MIGI's officers and directors have indicated that they will not tender their shares in response to the offer. The Board concluded that, since these shareholders collectively hold a majority of MIGI shares, the likelihood of success of the tender offer is questionable.
    Also, the Board indicated that the Bidder has failed to present any plan or proposal regarding the financing of the tender offer. This is further supported by statements by the Bidder that no guarantees will be made regarding the ability to finance the tender offer.