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STI GROUP CONSIDERS PROPOSAL FROM AMERICAN FINANCIAL FOR THE PURCHASE BY STI OF GREAT AMERICAN LIFE INSURANCE

 STI GROUP CONSIDERS PROPOSAL FROM AMERICAN FINANCIAL
 FOR THE PURCHASE BY STI OF GREAT AMERICAN LIFE INSURANCE
 STAMFORD, Conn., June 26 /PRNewswire/ -- STI Group, Inc. (NYSE: SPG) announced that it is considering a proposal from American Financial Corporation (AFC) for the purchase by STI of Great American Life Insurance Company, a wholly owned subsidiary of AFC, for approximately $485 million. As part of the proposed transaction, AFC would acquire additional shares of STI common stock, at a price of $6.50 per share, through a combination of currently outstanding shares and newly-issued shares from STI, to increase its equity ownership of STI to 80 percent. AFC currently owns approximately 32.5 percent of STI's outstanding shares. The Penn Central Corporation (PCC), a 50.05 percent owned subsidiary of AFC, owns approximately 6.6 percent of STI's outstanding shares. AFC's principal shareholder, Carl H. Lindner, is chairman of the board and chief executive officer of STI and PCC.
 STI stated that it has appointed a special committee of STI directors to review the proposal, and that the committee is empowered to negotiate all aspects of the proposed transaction. Completion of the transaction would be subject to certain conditions, including approval by the special committee and the full STI board of directors, receipt by STI of an appropriate fairness opinion from an investment banking firm, obtaining necessary bank financing and any required regulatory approvals.
 Great American Life Insurance Company (GALIC) is engaged principally in the sale of qualified tax-sheltered annuities to school teachers through payroll deduction programs. GALIC is licensed to write insurance in 48 states. At March 31, 1992 GALIC had total assets of $4.3 billion and stockholders' equity of $413 million on a GAAP basis. GALIC is rated A+ by A.M. Best.
 STI Group is a holding company with approximately $100 million in cash and stockholders' equity of $107.2 million at March 31, 1992.
 -0- 6/26/92
 /CONTACT: R. Kevin Matz of STI Group, 203-964-8628/
 (SPG) CO: STI Group Inc.; Great American Life Insurance Company ST: Connecticut IN: FIN SU: TNM


AH-OS -- NY057 -- 4303 06/26/92 15:14 EDT
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Publication:PR Newswire
Date:Jun 26, 1992
Words:354
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