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SELECTIVE INSURANCE GROUP SIGNS LETTER OF INTENT FOR PURCHASE OF NIAGARA EXCHANGE CORPORATION

 SELECTIVE INSURANCE GROUP SIGNS LETTER OF INTENT
 FOR PURCHASE OF NIAGARA EXCHANGE CORPORATION
 BRANCHVILLE, N.J., Feb. 18 /PRNewswire/ -- Selective Insurance Group, Inc. (NASDAQ: SIGI) and Niagara Exchange Corporation (NASDAQ-NMS: NIEX) announced today that they signed a letter of intent for the acquisition of Niagara by Selective. Through a cash merger, stockholder of Niagara would receive $11.50 in cash for each share of Niagara common stock and each share of Niagara Series C cumulative convertible preferred stock.
 Under the letter of intent, the merger will be subject to completion of a due diligence investigation by Selective, negotiation of a definitive merger agreement, board of director's approval of both companies, Niagara stockholder approval, termination of the waiting periods under Federal antitrust laws, regulatory consents and certain other conditions. Riedman Corporation, Philo Smith & Co., Inc., and Charles J. Clauss, who are currently beneficial owners of approximately 5 percent or more of Niagara's stock, have indicated, in writing, to Selective that they will vote their respective shares in favor of the proposed merger.
 Charles J. Clauss, chairman, president and chief executive officer of Niagara, said, "The special stockholders committee of the board of directors has reviewed a number of alternatives for maximizing stockholder value. We believe that the proposed transaction offers the best opportunity for our stockholders to realize the value of their shares."
 Frederick H. Jarvis, chairman, president and chief executive officer of Selective Insurance Group, Inc., stated, "This transaction would accelerate our efforts to enter the market in upstate New York. Niagara is an excellent company with an underwriting philosophy and operating principles similar to our own. We look forward to the value that the agents and employees of Niagara and its subsidiaries will bring to our operation."
 Niagara has approximately 1,800,000 shares of common stock outstanding, and approximately 978,000 shares of Series C cumulative convertible preferred stock outstanding.
 Niagara Exchange Corporation is a Buffalo, N.Y., based insurance holding company whose principal subsidiary, Exchange Insurance Company, writes property and casualty insurance.
 Selective Insurance Group, Inc. is a holding company with four insurance subsidiaries: Selective Insurance Company of America and Selective Way Insurance Company, based in Branchville; and Selective Insurance Company of the Southeast and Selective Insurance Company of South Carolina, based in Charlotte, N.C. Selective's insurance subsidiaries are regional property and casualty insurers that underwrite traditional lines of insurance including automobile, property, workers' compensation, general liability and fidelity and surety.
 -0- 2/18/92
 /CONTACT: Dominic J. Addesso, executive vice president and chief financial officer, 201-948-1289, or Thornton R. Land, senior vice president, general counsel and secretary, 201-948-1322, both of Selective Insurance Group/
 (SIGI) CO: Selective Insurance Group Inc.; Niagara Exchange Corporation ST: New Jersey, New York IN: INS SU: TNM


SM-TS -- NY029 -- 9840 02/18/92 10:33 EST
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Publication:PR Newswire
Date:Feb 18, 1992
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