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MetLife, Inc. Message Board

  • bjshark88 bjshark88 Jun 7, 2005 10:07 PM Flag

    Merger concerns

    Today's article on objections to the Travellers merger seems to be putting pressure on Met to hold off trimming jobs. I have some concerns that that could reduce assumed cost savings/synergies from the deal and result in lower earnings going forward. The price was pretty steep as it was. Anybody else worried about this?

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    • from_red_umbrella_to_red_baron from_red_umbrella_to_red_baron Jun 17, 2005 9:39 AM Flag

      Absolutely on 11/1/05 victory will be declared. 'They' are already changing the scope of items to make sure that the date is met. Whether anything is accomplished between LD1 (Legal day 1-when MetLife purchase is complete) and November, I have no doubt victory will be declared!! Here current plans are not to have systems moved into MetLife datacenters till 10/06. From then, 'True' integration will start, lasting till '08 (when coincidentally the lease on current office space ends).
      The actual question is just because victory is declared, is it a true victory for the stockholders? (Maybe that�s why the 'big boys are buying and volume is up).

    • "So Bob (Benmo) said the right things but an aggressive acquistion strategy was probably not seriously considered."
      I guess the answer is - He fibbed - a LOT!

    • BJ for your first hand report of the reasons Bob Benmo gave for demutalizing METLIFE. I rest my case.

    • OK, here's the summary of the testimony (which may in fact have been a transcript of the tape you wrote about in your note) and the commentary: Benmo gave three reasons (in this order) for the demutualization: Demutualization will 1) enhance Metlife's potential to grow and offer the highest quality products and services, 2) With access to the capital markets we will be able to better enhance our customer service capabilities, develop new products and services and 3) pursue strategic opportunities.

      Now the commentary: "Every company that goes public, particuarly mutuals, talk about the ability to tap into the equity markets. But no one took it too seriously because newly minted public companies (particuarly BIG ones, which the mutuals instantly become) are too busy doing everything they can to build a steady, loyal investor base that will become long-term investors -- not fly by night day trader types. The result is that these companies are more likely to buy back shares and make acquisitions with capital (i.e. cash) and leverage than they are making acquisitions by issuing shares. Anything dilutive is not worth doing. So Bob (Benmo) said the right things but an aggressive acquistion strategy was probably not seriously consiered when the company went public. Obviously, that's not the case now."

      Well, that's it. I'm off to the west coast for a few days but I look forward to any reaction to this. I was hoping for a little more color but this is what I got.

    • My sources indicate the target for some form of "commonality" is 11/05. But my guess is that it's worded in such a way that Benmo can claim success regardless of what is or is not accomplished. He's promised bonuses for success. My guess is that he has also been promised something by the Board for "success."

      I don't foresee Met closing the Hartford office any time soon. They didn't close the Boston or St. Louis offices of acquired companies. (They did move the NEF folks out of the Boston headquarters - but then, they moved the Met personnel out of Met's headquarters, too.)

    • It'll be interesting, shark. Benmo had a VHS tape made of his TV appearances pre IPO discussing the plan. He sent it to all officers. I haven't checked recently, but maybe it self-destructed!

    • Actually, I reached one of them yesterday. He checked out the board, laughed, and said he would fax me today a public document that is some testimony that Benmo gave before the reglators at the time of the demutualization. He gave me some more color and we'll spoeak again today after I read it. I'll try to post tonight after I've read it and, hopefully, spoken with him. This won't be any inside info -- I don't want that and he won't give it! Stay tuned...

    • Your post reminds me - didn't those snake oil salesmen who sold their wares off the back of a covered wagon of sorts also have a belly dancer with them? Could it be that that was what LW was hired to do? Could it be? Nah.... but then again ....

    • Shark - Igotmet makes an interesting point. Any chance of getting your guys to comment?

    • Interrestin obsirvatin. Sounds like won o them there snake oill peepl thit usta be in thees hear parts untl we done run em outta town. Ahd luv ta here whut them eggsecutivs gots ta say bout this. Ah kinda be smellin sum cow pies ah think.

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