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Symetra, a Buffett Holding, Plans IPO… Again (SYA, BRK-A, WTM, BEN, OZM)

247wallst — Tue, 06 Oct 2009 15:56:07 +0000

After the close on Monday came a little-known IPO filing from a life insurance operation called Symetra Financial Corp. It turns out that the Bellevue, Washington-based insurer has no terms for the sale but listed a sale of up to $575 million in the initial public offering filing. This is not the first attempt to come public, but it turns out that Warren Buffett’s Berkshire Hathaway Inc. (NYSE: BRK-A) and White Mountains Insurance Group, Ltd. (NYSE: WTM) effectively control the company.

This one filed for an IPO of up to $750 million back in 2007, but the insurer pulled the plug on the IPO in 2008. You can guess the reason listed… ‘unfavorable market conditions.’

Symetra plans to trade under the stock ticker “SYA” on the New York Stock Exchange. It has an impressive lineup of joint book running managers: BofA Merrill Lynch, JPMorgan, Goldman Sachs and Barclays Capital.

We noted that Berkshire Hathaway is a shareholder, and that stake is listed as 26.3%. But other shareholders include White Mountains Insurance Group, Ltd. (NYSE: WTM) also listed with a 26.3% stake. Franklin Mutual Advisers, LLC, a unit of Franklin Resources, Inc. (NYSE: BEN) is listed as a 11.7% stakeholder. Even Och-Ziff Capital Management Group LLC (NYSE: OZM) is listed as a 6.6% stakeholder via its OZ Master Fund, Ltd. Other stakeholders include Vestar Capital Partners, Highfields Capital Management, and Caxton Associates.

Based on how Symetra’s stakeholders are listed and per the filing, this is effectively controlled by Symetra is controlled by Berkshire’s General Re and White Mountains. This time the company and holders will sell shares, although again terms are not disclosed.

Symetra’s revenues fell by almost 9% in 2008 from 2007 to $1.45 billion, with about 60% coming from group and individual insurance lines. Most of the drop was attributed to investment losses.

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JON C. OGG
OCTOBER 6, 2009

Posted in Buffett, Editor's Picks, Financial Stocks, IPOs, Private Equity Tagged: BEN, BRK-A, OZM, SYA, WTM

OneBeacon, White Mountain Files Shelf Registration (OB, WTM)

247wallst — Wed, 02 Jul 2008 13:54:41 +0000

OneBeacon Insurance Group (NYSE: OB) isn’t a household name. But today it filed for a $1 Billion mixed securities shelf registration. With a $1.67 Billion market cap, this may get attention even for a smaller insurer.

There are being registered as an indeterminate number or amount of common shares, preferred shares (for HOLDINGS TRUST unit), debt securities, warrants, purchase contracts, depositary shares and units of OneBeacon Insurance Group, Ltd.

This also say that in addition to the filing White Mountains Insurance Group, Ltd. (NYSE: WTM) or certain of its subsidiaries may sell up to 71,754,738 shares of OneBeacon Class A common shares.

Net proceeds from the sale of the securities are earmarked for general corporate purposes, which may include, without limitation, repayment of borrowings, working capital, capital expenditures, share repurchase programs and acquisitions… But it will receive no proceeds from the sale of shares by selling shareholders.

Jon C. Ogg
July 2, 2008

White Mountains Buys Off Warren Buffett (WTM, BRK/A)

247wallst — Mon, 10 Mar 2008 06:48:25 +0000

White Mountains Insurance Group, Ltd. (NYSE: WTM) entered an exchange agreement with Berkshire Hathaway Inc. (NYSE: BRK-A) to transfer certain runoff businesses and a substantial amount of cash to Berkshire Hathaway, and this will allow it to take back it 16.3% stake or some 1.7242 million shares owned by Berkshire Hathaway.

Warren Buffett & Co. will get 100% of a White Mountains subsidiary, which will hold Commercial Casualty Insurance Company, International American Group, Inc., and $751 million in cash before adjustments.

This group had combined gross assets of about $435 million and shareholder’s equity of $58 million. This will act to reduce the outstanding common shares of White Mountains would be reduced to approximately 8.8 million shares and also allows White Mountains to exit runoff businesses with potentially volatile reserves. It also allows it to reduce undeployed capital and to redeem about one-sixth of the company’s shares at a small premium to GAAP book value.

The value of the transaction is listed roughly $836 million at $485 per share. White Mountains and Berkshire Hathaway expect no substantial taxable gains in the exchange and this has been approved by both companies. White Mountains closed at $478.00 per share on Friday.

This is one of the more odd transactions out there, but Berkshire Hathaway has been making more difficult financial transactions and new businesses in the new markets that can capitalize off of the liquidity and credit crunch that has affected the markets and the economy.

Jon C. Ogg
March 10, 2008