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Stock Slump Clouds Nationwide-Provident Deal

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NU Online News Service, Sept. 25, 8:14 p.m. – Provident Mutual Life Insurance Company, Berwyn, Pa., says its policyholder-owners have approved plans to convert the company to a stock charter and submit to an acquisition by Nationwide Financial Services Inc., Columbus, Ohio, despite the recent slump in Nationwide’s share price.

About 93% of the votes cast by Provident’s eligible members were in favor of the proposal, the company says.

The total value of the Nationwide stock and other consideration swapped for Provident’s new stock would be about $1.2 billion, Provident says.

Because the price of Nationwide stock, along with prices of many other stocks, has fallen sharply since the merger agreement was signed in August, Provident has a right under the agreement to walk away from the deal.

“A decision as to whether or not to proceed with the merger will be made by Provident’s board of directors and a decision to proceed will require the approval of the Pennsylvania Insurance Department,” Provident says. “If the decision to proceed is made, the closing is expected to occur on or about October 1, 2002.”