the flaw in that logic is that the reality is keeping the business together reduces value to ORI shareholders, not increases it. it reduces choice, not increases it. If they pushed the spinoff, ORI shareholders could choose to hold onto RFIG or not. That was the great part. Any value of RFIG was not 'lost', it was spunoff. It was there through what was supposed to be the new spinco. the market will never go along with mgmt saying hey forget about all these losses you see, pretend they are not here and ignore gaap. may be more true to ignore but market won't do it. so now the status quo remains and the badco will continue to cover up the goodco and shareholders will suffer for years. too bad.
Listening to Zucaro was painful. Completely delusional about how it's great that RFIG is staying together when last month he was saying how great it was they were spinning it off. Absurd. Too bad for shareholders.
Also, why will they not say who prevented the spinoff? It cost shareholders over $500m so an explanation is deserved.
those are good points. sounds like it would shake out to winning either way. if they get shut down then the worry is lifted they are going to keep throwing good money after bad. usmi can be separated and the recapitalized after a spinoff just like ori/rfig. if they don't get shut down, then they are writing huge margin business and mgmt will still separate usmi or more likely all of global mi. so that works too. either way it's a win.
paid, that is a very good point about the MIC shares supporting USMI. However, USMI book is about $1b. in contrast, RFIG (from ORI) has a NEGATIVE book value of $17m and is expecting more losses for at least a couple of years. and it is still being spunoff. so MIC dropping some does not really change things too much.
matt, another really good article. thanks for sharing. i'm guessing they pulled the aus mi ipo because they were probably going to have to sell at too much of a discount to book. not sure if that's going to get better. so i hope that gets them to spinoff all of global mi together.
GNW just filed an S8 that outlines 16m shares/options as part of the 2012 omnibus incentive program. Looks like at a strike of $4.95. Wow, they are going to clean up! I wonder how they are going to split up the pie. How/when is this disclosed?
how does this benefit them. why wouldn't they just want to keep the NOLs for the future? for what reasons are the incentives lined up to deliberately make the transaction taxable. what is gained. what is avoided. altogether very interesting transaction.
joradn what is wrong with you - shareholders can ask questions. questions were requested/solicited by the board at the end of the meeting today. no one had any questions though. not even you! it is amazing that you are spending/wasting your life away with these efforts. get free my friend. good luck.
joradn it appears you speak from a position of weakness as you do not know the company that well or what may drive gnw's value down or perhaps even up. let me ask you this. what is the stub value of gnw when you back out the canada mi stake of $1.5b with gnw's mc of 2.5b? and then compare that to say the stub bv of 13b?
Riepe, the chairman, said this TODAY at the annual meeting -
“[We] realize the equity markets have heavily discounted the value of the company’s businesses for several years now. So the challenge to the directors and management team is to take actions that will reduce that discount... If we are successful, these actions will serve to substantially rebuild shareholder value.”
Know what else Riepe said? That they
"see opportunities for value creation" and
"we are far along in this process" meaning of the strategic review and will do this through
"realigning the business portfolio"
They are telegraphing what is about to happen. Couldn't be much clearer than that.
jordan, you and hounddog are wrong. LI comps trade at 2x to 4x statutory book. your comments are misleading. this puts gnw at 12 to 24. and stat book levels already back out a lot so it is a very conservative case.