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AIG to Use Warrants to Control 20th Century

July 28, 1998| Bloomberg News

20th Century Industries, a Woodland Hills-based auto insurer, said American International Group Inc. plans to take a controlling stake in it by exercising warrants and converting preferred shares. AIG told 20th Century it wants to exercise all its 16 million warrants to buy shares at $9.10 each and convert its 224,750 shares of preferred stock into 19.8 million shares of common. 20th Century would receive $145.6 million from the conversion of warrants. AIG slowly bought shares of 20th Century in recent years, allowing it to take a majority stake in the eighth-largest publicly traded U.S. auto insurer without paying a takeover premium. New York-based AIG, the largest publicly traded U.S. insurer, said two weeks ago it had enough common shares, warrants and preferred stock to control more than 50% of 20th Century if it exercised all its holdings. AIG and 20th Century officials are discussing AIG's future role in 20th Century. 20th Century shares closed unchanged at $27 on the NYSE. About two-thirds of 20th Century's capital was wiped out by claims stemming from the Northridge quake in 1994, causing $12.5 billion in insured damage. AIG first invested in the company that year. AIG shares rose $7.06 to close at $152.94, also on the NYSE.

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