Great American Financial Resources, Inc. has completed the sale of Chatham Bars Inn, its resort property located on Cape Cod, Massachusetts, for a price of approximately $166 million.
In connection with the sale, $10 million of the sale proceeds have been placed in escrow for possible use in satisfying certain contingencies. GAFRI expects to report a gross gain (after sales expenses and contingencies) of approximately $78-$80 million on the sale. After taxes and the write-off of certain deferred acquisition costs on annuities associated with the gain recognition, the Company expects to report a gain of approximately $29-$32 million ($0.60 – $0.67 per share).
These amounts are lower than originally forecasted due primarily to the contingent amount discussed above. The gain will be included in the company’s results for the second quarter of 2006. Additional gains could be recorded to the extent that the contingencies are favorably resolved.
The company had owned and operated the hotel since 1993.
S. Craig Lindner, GAFRI’s chief executive officer, said the company will apply the proceeds to its core business. “We are pleased to have completed the sale of Chatham Bars Inn. We intend to continue our efforts to grow our core businesses organically and through acquisitions and will look for opportunities to utilize the proceeds of this sale as part of those growth efforts,” he commented.
GAFRI is a Cincinnati-based insurance holding company with nearly $12 billion in assets. The company’s subsidiaries include Great American Life Insurance Company, Annuity Investors Life Insurance Company, United Teacher Associates Insurance Company (headquartered in Austin, Texas) and Loyal American Life Insurance Company. Through these companies, GAFRI markets traditional fixed, indexed and variable annuities and a variety of supplemental insurance products.
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