CHICAGO (AP) -- Insurance underwriter Old Republic International Corp. said Friday that it has withdrawn plans to spin off its subsidiary Republic Financial Indemnity Group.
The Chicago-based company announced in May that it sold a 20.6 percent stake in the subsidiary to a group of investors as part of a partial leveraged buyout plan to ultimately make the unit a stand-alone company. Old Republic planned to spin off its remaining shares as a taxable dividend in-kind to its shareholders.
Old Republic said Friday that it changed its plans after stakeholders raised concerns that the spinoff of the indemnity group would be "disadvantageous to their interests and expectations".
The company previously said that it was making the move as part of a plan to combine its two lines of mortgage guaranty and consumer credit indemnity products while separating them from the rest of the business. Those product lines had been hurt by cumulative losses that eroded the capital base supporting them.
Old Republic shares fell $1.27, more than 12 percent, to close at $9.27.