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RELIANCE ESTIMATES $50 MILLION GAIN ON SALE OF FRANK B. HALL

 RELIANCE ESTIMATES $50 MILLION GAIN ON SALE OF FRANK B. HALL
 NEW YORK, July 24 /PRNewswire/ -- Reliance Group Holdings, Inc. (NYSE: REL), announced today that it estimates it will record a gain of approximately $50 million after tax, or $.67 per share, upon completion of the sale of assets of its majority-owned subsidiary, Frank B. Hall & Co. Inc. (NYSE: FBH), to Aon Corporation (NYSE: AOC).
 Hall announced a definitive agreement today for the sale of substantially all of its operating assets to Aon for total consideration of $475 million, comprised of $125 million in cash, $225 of Aon 8 percent preferred stock, and $125 million of Aon 6-1/4 percent convertible preferred stock, plus the assumption by Aon of certain of Hall's operating liabilities.
 After providing for Hall's preferred stock and the repayment of its indebtedness, as well as taxes and other costs of the transaction, approximately $1.25 per share would be available for common shareholders of Hall. Instead, following the sale, Hall will be merged with a subsidiary of Reliance, under which Hall's common shareholders other than Reliance will receive .625 shares of Reliance common stock for each share of Hall they own.
 As part of the transaction, Reliance Insurance Group has agreed to provide $18 million per year for 15 years of reinsurance brokerage commissions to Aon following the sale of Hall's operations. Reliance Insurance Group currently provides Hall with a significant amount of reinsurance brokerage commissions.
 Commenting on the sale of Hall, Reliance Group Chairman and Chief Executive Officer Saul P. Steinberg said he was "pleased with the terms of the transaction and the fact that Hall was being acquired by a strategic buyer with a keen interest in building on Hall's long-standing reputation in the industry.
 "The combined Aon and Hall insurance brokerage operations will be very well positioned for the future," he said.
 Steinberg noted that in addition to producing a substantial gain, the transaction is also an important part of Reliance's overall plan to strengthen its capital base by improving liquidity and increasing the company's financial flexibility.
 Reliance currently owns approximately 70 percent of Hall's primary shares and 84 percent on a fully diluted basis. For the past several years, Reliance has provided significant amounts of capital as well as strategic oversight to Hall as the company completed a major restructuring and turnaround of its operations.
 Reliance Group Holdings, Inc., headquartered in New York, has major property and casualty, life, title and mortgage insurance operations and provides consulting and technical services. Reliance had 1991 revenues of $3.40 billion and assets at year-end of $11.25 billion.
 -0- 7/24/92
 /CONTACT: Brian T. Martin of Reliance, 212-909-1247/
 (REL FBH AOC) CO: Reliance Group Holdings, Inc.; Frank B. Hall & Co., Inc.;
 Aon Corporation ST: New York IN: FIN INS SU: TNM


TS-GK -- NY007 -- 2911 07/24/92 08:44 EDT
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Publication:PR Newswire
Date:Jul 24, 1992
Words:477
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