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Prudential's Plan to Go Public Receives Support

August 07, 2001|Associated Press, Reuters

Prudential Insurance Co. of America policyholders overwhelmingly approved the insurer's plan to become a publicly traded company, the company said Monday.

Nearly 92% of the 4 million policyholders who mailed in votes approved the plan, Prudential said. Prudential received four times the number of votes required by state demutualization statutes, and nearly half of the policyholders who received mailings returned them, company officials said.

"The overwhelming support we received from policyholders indicates to us that they believe as strongly as we do about the benefits of this plan," Executive Vice President Mark Grier said.

Policyholders had until July 31 to cast votes by mail, phone or Internet. Prudential still needs approval from the New Jersey Department of Banking and Insurance, which has until the end of September to enter an order.

Prudential officials held a public hearing in Trenton last month to pitch their plan, saying an initial public stock offering would allow Prudential to compete with an insurance industry increasingly filled with consolidating companies.

Newark, N.J.-based Prudential anticipates it would become one of the most widely held U.S. stocks, with each policyholder getting at least eight shares.

Prudential plans to distribute 455 million shares to policyholders and sell 89 million shares to the public when it converts from a mutual company owned exclusively by policyholders.

Prudential had more than $371 billion in assets under management as of Dec. 31, making it among the largest financial services institutions in the world.

Last year, rivals MetLife and John Hancock Financial Services Inc. went public, and Phoenix Cos. followed suit this June. Boston-based life insurer Liberty Mutual is in the process of demutualizing.

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