Transamerica Corp., unsatisfied with the profitability of its property/casualty subsidiary, said it plans to sell a majority interest in the Woodland Hills-based unit through an initial public offering of stock early next spring.
The San Francisco-based financial services giant said it plans to use proceeds from the sale to pay down debt and bolster its core finance and life insurance businesses. If the transaction results in a loss because of market conditions, Transamerica estimated that such a loss would not exceed $75 million.
The parent plans to sell 51% of the stock in the initial public offering and sell the rest in subsequent offerings.
The property/casualty unit, Transamerica Insurance Group, will remain in Woodland Hills but will change its name after the stock offering. No name has yet been chosen.
After the offering, the new chairman and chief executive will be Jon W. Rotenstreich, former chairman of Torchmark Corp., a Birmingham, Ala.-based insurance concern. Rotenstreich said he will invest $5 million in the stock offering.
The new president and chief operating officer will be Don Hutson, former chairman and chief executive of Maryland Casualty Co.
Times staff writer Martha Groves in San Francisco contributed to this story.