Exhibit 99.1
Text of the press release dated November 6, 1996,
issued by Provident Companies, Inc. and
Textron Inc.
(attached)
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FOR IMMEDIATE RELEASE Contacts: TEXTRON
Xxxx X. Xxxxxxx
(000) 000-0000
PROVIDENT
Xxxxxx X. X. White
(000) 000-0000
Textron and Provident Reach Agreement for
Textron to Provide Additional Capital to Xxxx Xxxxxx
Adjustments to Provident/Xxxx Xxxxxx Merger Agreement
Do Not Change Financial Terms for Public Shareholders
Providence, Rhode Island, and Chattanooga, Tennessee, November 6, 1996 --
Textron Inc. (NYSE: TXT) and Provident Companies, Inc. (NYSE: PVT) today
jointly announced an agreement under which Textron would provide additional
capital to its 83%-owned subsidiary, The Xxxx Xxxxxx Corporation (NYSE: PRL),
and the companies will make certain other adjustments relating to Provident's
pending acquisition of Xxxx Xxxxxx. The transaction is presently targeted to
close early in the first quarter of 1997.
On April 29, 1996, Provident announced a definitive agreement to acquire
all outstanding shares of Xxxx Xxxxxx. Pursuant to the revised agreement, the
financial terms of Provident's acquisition of Xxxx Xxxxxx are unchanged to Xxxx
Xxxxxx'x public shareholders.
However, under the revised agreement, Textron agreed to provide additional
capital to Xxxx Xxxxxx, the amount of which will depend upon a final
determination of the required levels of Xxxx Xxxxxx'x statutory reserves,
subject to certain limits. In addition, Textron also agreed to grant certain
other concessions to Provident, including resetting the "collar" relating to the
stock portion of the merger consideration Textron will receive from Provident
for Textron's 37.5 million Xxxx Xxxxxx shares. This reset reflects the higher
recent price of Provident shares. Textron will receive $20.00 per share in cash
and $6.00 per share in Provident common stock for its Xxxx Xxxxxx shares subject
to the reset collar. This change may reduce the number of Provident shares
Textron will receive, but will not affect the payment to be received by Xxxx
Xxxxxx'x public shareholders.
As a result of the revised agreement, Textron will recognize an additional
loss from discontinued operations in the third quarter of $155 million net of
tax which represents the estimated cost of the above
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modifications related to capital and other considerations. These amended results
have been released separately by Textron.
Xxxx Xxxxxx'x public shareholders may still elect to receive $26.00 per
share in cash, a combination of $20.00 in cash and Provident common stock, or
all Provident common stock. The stock consideration will be based on an
exchange ratio determined during a defined period prior to the closing and
subject to certain minimum and maximum share amounts. These terms have not
changed since the original announcement. Based on Provident's closing stock
price of $37.75 on Tuesday, November 5, the all-stock election would currently
be worth $28.95 per Xxxx Xxxxxx share.
The transaction remains subject to the resolution of issues raised in the
regulatory review process of the joint proxy/prospectus being prepared for the
required vote of the shareholders of Provident and Xxxx Xxxxxx and remains
subject to the approval of the Commonwealth of Massachusetts Division of
Insurance (the Division). During the third quarter of 1996, Xxxx Xxxxxx
initiated a comprehensive study of the adequacy of its individual disability
GAAP and statutory reserves to consider experience through September 30, 1996.
Xxxx Xxxxxx announced today the completion of the GAAP portion of the
comprehensive reserve study, and said it would be adding $380 million to its
GAAP reserves. The Division has determined to update its quadrennial
examination of Xxxx Xxxxxx to review the results of the statutory reserve study.
The statutory reserve study, and consequently the Division's review, has not yet
been completed.
Provident Companies, Inc. is a provider of disability, life and related
coverages to the Individual and Employee Benefits marketplace.
The Xxxx Xxxxxx Corporation, an 83%-owned subsidiary of Textron Inc., is
the parent company of the Xxxx Xxxxxx Life Insurance Company which provides
disability insurance and other insurance products in the United States and
Canada.
With revenues exceeding $9 billion, Textron Inc. is a global, multi-
industry company with market-leading operations in five business segments:
Aircraft, Automotive, Industrial, Systems & Components and Finance.
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