Steven Wevodau - Insurance Mergers & Acquisitions

ING to sell big piece of Canadian unit

Posted by Steven Wevodau

By BOYD ERMAN

CAPITAL MARKETS REPORTER

Dutch financial services firm ING Groep NV is raising $1.75-billion by selling most of its stake in insurer ING Canada Inc. at a big discount, in a bid to shore up capital after record losses.

ING Groep is selling a 63-per-cent stake in Canada’s largest home and auto insurer. Roughly half will be sold to the public at a price of $26.35 a share. The other half is going to unnamed institutional investors, both pension and mutual fund, in a private placement at $25 a share. Both prices are more than 20 per cent below the $33.79 level at which the stock finished trading yesterday.

The big price cut reflects ING Groep’s need to sell, as well as the challenge of finding buyers for such a huge stake in a company in a tough market. 

“It’s a tough market out there because it’s a buyer’s market,” said Ian Nakamoto, director of research at Toronto-based money manager MacDougall MacDougall & Mactier Inc. “It sounds like the price was set in negotiations with the private buyers, and the private buyers in Canada were in the driver’s seat.”

The parent company is in rough shape, racking up losses that forced it to seek help from the Dutch government. ING Groep recently said that it lost about €3.3-billion ($5.3-billion) in the fourth quarter. It’s cutting 7,000 jobs and its chief executive officer, Michel Tilmant, recently departed.

The Dutch government injected €10-billion into ING late last year, and since has had to take over some of the company’s troubled €30-billion portfolio of mortgages. The company is even cutting back spending on a Formula One team it sponsors.

“In the current uncertain economic and market environment, we have structured a transaction with certainty of proceeds,” Jan Hommen, the new boss of ING Groep, said in a statement. “The proceeds from the transaction will be used to fortify ING’s capital position.”

ING Groep said it may sell an additional $127-million of ING Canada if there’s enough demand, which would reduce the parent company’s stake to 8.9 per cent.

Mr. Hommen said he wants to focus on savings and investments rather than the insurance business. ING Groep will continue to own the Canadian bank business known as ING Direct, which is famous for its “Save your money!” advertising campaign.

ING Canada hasn’t been immune to the economic slump and the plunge in markets, reporting a loss in the fourth quarter because of writedowns on the company’s stock portfolio.

“Our financial position is strong with significant excess capital and no debt and we look forward to building on our strengths on the marketplace,” Charles Brindamour, head of ING Canada, said in a statement.

ING Canada’s shares had held up relatively well through the past year’s market carnage, trading close to their level from a year ago. That may have made it an attractive candidate to sell.

But the price of the sale may anger other shareholders in ING Canada, Mr. Nakamoto said. “I’d be upset they brought down the price so aggressively,” he said.

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Marsh & McLennan buys 49%, takes full control of DeLima - Colombia - posted by Steven Wevodau

Marsh & McLennan Companies (NYSE: MMC) has purchased the 49% it did not own in Colombia’s DeLima Marsh from the company’s minority partners, the US insurance broker said in a press release.

Terms of the deal were not disclosed. DeLima Marsh is the largest insurance broker in Colombia.

“In a moment when everybody is keeping positions in cash and in a very tough economic environment, they’re making an important investment in a country like Colombia. It shows great confidence in the future of the Colombian insurance market,” a source close to the deal told BNamericas.

The transaction gives Marsh full ownership of the firm, allowing it to expand the business already conducted in the country through its Marsh, Mercer and Guy Carpenter operating units, the press release reads.

Gonzalo Sanín will continue as CEO, managing DeLima Marsh’s day-to-day operations.

Ernesto de Lima will continue as chairman of the company’s insurance unit and Jorge Alberto Uribe will also maintain his current involvement with the company, Marsh said.

DeLima has approximately 1,000 employees in Colombia, in locations including Bogotá, Cali and Medellín.

In June 1999, Marsh - then operating as J&H Marsh & McLennan - purchased a 51% stake in Compañías DeLima and merged the two companies’ insurance businesses in Colombia to form DeLima Marsh.

The remaining reinsurance and human resources practices of Compañías DeLima were absorbed into the businesses of Marsh & McLennan companies, Mercer and Guy Carpenter.

“Completing this purchase now is a logical step that will allow us to focus on new development opportunities as well as achieve synergies and streamline our processes to more efficiently serve our clients,” said Alexander S Moczarski, president of Marsh International.

“Over the past several years, Colombia has become one of the fastest growing markets in Latin America and has emerged as a key strategic location for MMC’s presence in the region,” said Thomaz Menezes, Marsh regional head of Latin America and Caribbean operations.

In March last year, Menezes told BNamericas the company had budgeted US$100mn for acquisitions in the region over the next three years.

Jorge Porter
Business News Americas

Tags: Marsh & McLennan, MMC, Steve Wevodau Marsh & McLennan, Steven Wevodau Marsh & McLennan

Cincinnati Financial sells entire Fifth Third stake - posted by Steven Wevodau

(Recasts, adds details) Feb 2 (Reuters) - Cincinnati Financial Corp (CINF.O), a U.S. Midwestern property and casualty insurer, said it sold its entire holding in Fifth Third Bancorp (FITB.O) in January for a capital gain.

The company was offloading its holding in Fifth Third throughout 2008. In July, the company sold more than half of its Fifth Third holding for a gain of $225 million.

By year-end 2008, the company had reduced its Fifth Third holding to about 12 million shares.

The company said as of Jan. 31, it had slightly more than $1 billion in cash and cash equivalents and a short-term debt of $49 million.

The company also set a quarterly cash dividend of 39 cents a share, payable on April 15, to shareholders of record on March 20.

“In view of current economic and market conditions, the board chose to continue for later discussion the potential for an increase in the 2009 dividend payout level,” the company said.

Fifth Third shares were down 6 percent at $2.25, and Cincinnati shares were down 2 percent at $21.50 in morning trade on Nasdaq. (Reporting by Supantha Mukherjee in Bangalore; Editing by Jarshad Kakkrakandy)

© Thomson Reuters 2009 All rights reserved

Tags: Cincinnati Financial, Fifth Third, Steve Wevodau Cincinnati Financial, Steve Wevodau Fifth Third, Steven Wevodau Cincinnati Financial, Steven Wevodau Fifth Third

ING issues $6 bln, 3-yr state-guaranteed bonds

posted by Steven Wevodau

AMSTERDAM, Jan 30 (Reuters) - Dutch financial services group ING Group (ING.AS)(ING.N) said on Friday it had issued $6 billion worth of bonds with a maturity of three years which are guaranteed by the Dutch government.

ING said in a statement $5 billion of the issue was priced at a fixed rate of 80 basis points over mid-swaps, while $1 billion was priced at a variable rate of 80 basis points over 3-month LIBOR.

ING will issue in total 10 billion euros in government guaranteed bonds as part of a deal with the Dutch state, ING said. (Reporting by Gilbert Kreijger)

© Thomson Reuters 2009 All rights reserved

Tags: ING, Steve Wevodau ING, Steven Wevodau ING

Tower Stockholders Approve Acquisition of CastlePoint - Steven Wevodau

NEW YORK–(BUSINESS WIRE)–Tower Group, Inc. (NASDAQ: TWGP) today announced that its stockholders authorized during a special meeting the issuance of shares of Tower common stock to shareholders of CastlePoint Holdings, Ltd. (NASDAQ: CPHL) in connection with the merger of CastlePoint into a wholly-owned subsidiary of Tower.

Tower stockholders cast 19,640,144 votes in favor of the issuance of shares of Tower common stock to CastlePoint shareholders which represents 99.6% of the votes cast and 84.1% of the shares outstanding. The proposed merger was announced August 5, 2008.

About Tower Group, Inc.

Tower Group, Inc. offers property and casualty insurance products and services through its operating subsidiaries. Its insurance company subsidiaries offer insurance products to individuals and small to medium-sized businesses. Tower’s insurance services subsidiaries provide underwriting, claims and reinsurance brokerage services to other insurance companies.

For more information visit Tower’s website at http://www.twrgrp.com/. 

Cautionary Note Regarding Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. This press release or any other written or oral statements made by or on behalf of Tower and CastlePoint may include forward-looking statements that reflect Tower’s and CastlePoint’s current views with respect to future events and financial performance. All statements other than statements of historical fact included in this press release are forward-looking statements. Forward-looking statements can generally be identified by the use of forward-looking terminology such as “may,” “will,” “plan,” “expect,” “project,” “intend,” “estimate,” “anticipate,” “believe” or “continue” or their negative or variations or similar terminology. All forward-looking statements address matters that involve risks and uncertainties. Forward-looking statements speak only as of the date on which they are made, and the assumptions underlying our pro forma projections and/or earnings guidance could prove incorrect. Neither CastlePoint nor Tower undertakes any obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

Contacts

Tower Group, Inc.

Thomas Song, 212-655-4789

Managing Vice President

tsong@twrgrp.com 

Tags: CastlePoint, Steve Wevodau CastlePoint, Steve Wevodau Tower Group, Steven Wevodau CastlePoint, Steven Wevodau Tower Group, Tower Group

Brown & Brown, Inc. (BRO): Zacks Rank Buy - posted by Steven Wevodau

By Alex Kolb

Tags: Brown & Brown, Steve Wevodau Brown & Brown, Steven Wevodau Brown & Brown

XL Capital Ltd Announces Remarketing of 5.25% Senior Notes Due 2011

Posted by Steven Wevodau

HAMILTON, Bermuda, Jan. 23 /PRNewswire-FirstCall/ — XL Capital Ltd (”XL” or the “Company”) (NYSE: XL) announced today that the Company has entered into a Remarketing Agreement relating to the remarketing of the 5.25% Senior Notes due 2011 (the “Senior Notes”) comprising part of its 7.00% Equity Security Units. The Company has retained Goldman, Sachs & Co. to act as the agent (the “Remarketing Agent”) for the remarketing.

The remarketing will commence on February 3, 2009 and will settle on February 17, 2009, when the forward purchase contracts comprising part of the Equity Security Units are to be settled. Subject to certain conditions, the proceeds from the remarketing will be used to satisfy the purchase price for the Company’s Ordinary Shares to be sold to holders of the Equity Security Units pursuant to the forward purchase contracts. The number of Ordinary Shares to be issued on February 17, 2009 will be determined based on their average trading price for a period preceding that date and is subject to a maximum of approximately 11.5 million shares under the purchase contracts.

The Company may, at its discretion, submit an order to purchase some or all of the Senior Notes available to be remarketed. In the event that the Company determines to participate in the remarketing, the Company will retire all the Senior Notes it purchases in the remarketing.

This press release does not constitute an offer to sell or the solicitation of an offer to buy any of the Senior Notes or any other securities, nor will there be any sale of the Senior Notes in the remarketing in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

XL Capital Ltd, through its operating subsidiaries, is a leading provider of global insurance and reinsurance coverages to industrial, commercial and professional service firms, insurance companies and other enterprises on a worldwide basis. More information about XL Capital Ltd is available at www.xlcapital.com.

This press release contains forward-looking statements. Such statements involve inherent risks and uncertainties. Statements that are not historical facts, including statements about XL’s beliefs or expectations, are forward-looking statements. These statements are based on current plans, estimates and expectations. Actual results may differ materially from those projected in such forward-looking statements and therefore you should not place undue reliance on them. A non-exclusive list of the important factors that could cause actual events or results to differ materially from those in such forward-looking statements include the important factors set forth in XL’s most recent annual report on Form 10-K, quarterly report on Form 10-Q and XL’s other documents on file with the Securities and Exchange Commission. XL undertakes no obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future developments or otherwise.

Contact: 

David Radulski            Carol A. Parker Trott

Investor Relations        Media Relations

(441) 294-7460            (441) 294-7290

Tags: Steve Wevodau XL Capital, Steven Wevodau XL Capital, XL Capital

HCC gathers steam with string of acquisitions - posted by Steven Wevodau

Houston Business Journal - by Greg Barr

gbarr@bizjournals.com • 713-395-9628

Tags: HCC Insurance Holdings Inc., Steve Wevodau HCC Insurance Holdings Inc., Steven Wevodau HCC Insurance Holdings Inc.

Conseco Adopts Stockholder Rights Plan

Posted by Steven Wevodau

CARMEL, Ind., Jan. 20 /PRNewswire-FirstCall/ — Conseco, Inc. (NYSE: CNO) today announced its Board of Directors has adopted a stockholder rights plan designed to protect stockholder value by preserving the value of certain tax assets primarily associated with tax net operating loss carryforwards under Section 382 of the Internal Revenue Code. Section 382 would limit the value of those tax assets upon an “ownership change.” The rights plan was adopted to reduce the likelihood of this occurring by deterring the acquisition of stock that would create “5-percent shareholders” as defined in Section 382.

Under the rights plan, one right will be distributed for each share of common stock of Conseco outstanding as of the close of business on January 30, 2009. Effective January 20, 2009 if any person or group (subject to certain exemptions) becomes a “5-percent shareholder” of Conseco without the approval of the Board of Directors, there would be a triggering event causing significant dilution in the voting power and economic ownership of that person or group. Existing stockholders who currently are “5-percent shareholders” will trigger a dilutive event only if they acquire additional shares that would increase their percentage ownership of Conseco by more than 1 percent without prior approval from the Board.

“The stockholder rights plan protects the interests of all stockholders from the possibility of losing substantial value through further limitations on the company’s ability to utilize its net operating loss carryforwards under Section 382,” said Conseco CEO Jim Prieur. “The rights plan, similar to those adopted by other publicly-held companies, is not intended for defensive or anti-takeover purposes, but to preserve stockholder value, and is in the best interests of Conseco’s stockholders.”

The rights plan will continue in effect until January 20, 2012, unless earlier terminated or redeemed by the Board of Directors. Conseco’s Audit Committee will review the company’s NOL assets annually and will recommend amending or terminating the rights plan based on its review. Additionally, the Board has resolved to submit the continuation of the rights plan to a vote at the next annual meeting of the stockholders in May 2009. If stockholders do not approve the plan, it will be terminated. In this regard, the rights plan was drafted to conform to previous plans approved by RiskMetrics Group (formerly Institutional Shareholder Services).

A complete copy of the rights plan, including additional information regarding terms and conditions, will be included in a Current Report on Form 8-K to be filed by Conseco with the Securities and Exchange Commission. In addition, Conseco stockholders of record will be mailed a detailed summary of the rights plan.

Conseco, Inc.’s insurance companies help protect working American families and seniors from financial adversity: Medicare supplement, long-term care, cancer, heart/stroke and accident policies protect people against major unplanned expenses; annuities and life insurance products help people plan for their financial futures. For more information, visit Conseco’s web site at http://www.conseco.com/ .

Cautionary Statement Regarding Forward-Looking Statements. Our statements, trend analyses and other information contained in these materials relative to markets for Conseco’s products and trends in Conseco’s operations or financial results, as well as other statements, contain forward-looking statements within the meaning of the federal securities laws and the Private Securities Litigation Reform Act of 1995. Forward-looking statements typically are identified by the use of terms such as “anticipate,” “believe,” “plan,” “estimate,” “expect,” “project,” “intend,” “may,” “will,” “would,” “contemplate,” “possible,” “attempt,” “seek,” “should,” “could,” “goal,” “target,” “on track,” “comfortable with,” “optimistic” and similar words, although some forward-looking statements are expressed differently. You should consider statements that contain these words carefully because they describe our expectations, plans, strategies and goals and our beliefs concerning future business conditions, our results of operations, financial position, and our business outlook or they state other ”forward-looking” information based on currently available information. Assumptions and other important factors that could cause our actual results to differ materially from those anticipated in our forward-looking statements include, among other things: (i) general economic, market and political conditions, including the performance and fluctuations of the financial markets which may affect our ability to raise capital or refinance our existing indebtedness; (ii) our ability to obtain adequate and timely rate increases on our supplemental health products including our long-term care business; (iii) mortality, morbidity, the increased cost and usage of health care services, persistency, the adequacy of our previous reserve estimates and other factors which may affect the profitability of our insurance products; (iv) changes in our assumptions related to the cost of policies produced or the value of policies in force at the effective date of our emergence from bankruptcy; (v) the recoverability of our deferred tax asset and the effect of potential tax rate changes on its value; (vi) changes in accounting principles and the interpretation thereof; (vii) our ability to achieve anticipated expense reductions and levels of operational efficiencies including improvements in claims adjudication and continued automation and rationalization of operating systems; (viii) performance and valuation of our investments, including the impact of realized losses (including other-than-temporary impairment charges); (ix) our ability to identify products and markets in which we can compete effectively against competitors with greater market share, higher ratings, greater financial resources and stronger brand recognition; (x) the ultimate outcome of lawsuits filed against us and other legal and regulatory proceedings to which we are subject; (xi) our ability to remediate the material weakness in internal controls over the actuarial reporting process that we identified at year-end 2006 and to maintain effective controls over financial reporting; (xii) our ability to continue to recruit and retain productive agents and distribution partners and customer response to new products, distribution channels and marketing initiatives; (xiii) our ability to achieve eventual upgrades of the financial strength ratings of Conseco and our insurance company subsidiaries as well as the potential impact of rating downgrades on our business; (xiv) the risk factors or uncertainties listed from time to time in our filings with the Securities and Exchange Commission; (xv) our ability to continue to satisfy the financial ratio and balance requirements and other covenants of our debt agreements; (xvi) regulatory changes or actions, including those relating to regulation of the financial affairs of our insurance companies, such as the payment of dividends to us, regulation of financial services affecting (among other things) bank sales and underwriting of insurance products, regulation of the sale, underwriting and pricing of products, and health care regulation affecting health insurance products; and (xvii) changes in the Federal income tax laws and regulations which may affect or eliminate the relative tax advantages of some of our products. Other factors and assumptions not identified above are also relevant to the forward-looking statements, and if they prove incorrect, could also cause actual results to differ materially from those projected. All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by the foregoing cautionary statement. Our forward-looking statements speak only as of the date made. We assume no obligation to update or to publicly announce the results of any revisions to any of the forward-looking statements to reflect actual results, future events or developments, changes in assumptions or changes in other factors affecting the forward-looking statements.

SOURCE  Conseco, Inc.

01/20/2009

CONTACT: News Media: Tony Zehnder, Corporate Communications,

+1-312-396-7086, Investors: Scott Galovic, Investor Relations,

+1-317-817-3228, both of Conseco, Inc./

Web site:  http://www.conseco.com

Tags: Conseco, Steve Wevodau Conseco, Steven Wevodau Conseco

AIG kicks off sale of Asian life assurance unit: report - posted by Steven Wevodau

LONDON (Reuters) - American International Group Inc (AIG.N) has kicked off the sale of its Asian life assurance unit in the hope of raising up to $20 billion to help repay a U.S. government loan, the Financial Times reported on Thursday.

The U.S. insurer sent a sales memorandum for American International Assurance (AIA) to a group of selected potential bidders, the newspaper quoted “people close to the situation” as saying.

AIG declined comment on the report.

The Financial Times said AIA is regarded as a jewel in AIG’s crown. It has 20 million policyholders in 13 countries and last year made an aggregate operating profit of about $2 billion.

Analysts estimate the sale of a minority stake could fetch up to $20 billion, it said.

The newspaper said AIG had sought bids for 49 percent of AIA, but would be willing to look at offers for the entire unit. AIG could also opt for a full listing of the division if it does not achieve a high enough price, the report said.

Prospective bidders include China Life (601628.SS), HSBC (HSBA.L) (0005.HK), British insurer Prudential Plc (PRU.L) and U.S. life insurer Prudential Financial Inc (PRU.N), the report said.

Canada’s Manulife Financial (MFC.TO) and Germany’s Allianz (ALVG.DE) have also requested information, it added.

First-round bids are due toward the end of February, it said.

AIG, once the world’s biggest insurer by market value, averted bankruptcy in September with an $85 billion federal government bailout. The rescue later swelled to about $152 billion.

AIG has said it plans to sell everything except its U.S. property and casualty business, foreign general insurance, and an ownership interest in some foreign life operations.

(Reporting by Adrian Croft; Editing by Kim Coghill)

© Thomson Reuters 2009 All rights reserved

Tags: AIG, American International Group Inc., Steve Wevodau American International Group Inc., Steven Wevodau American International Group Inc.