View this article online: https://www.insurancejournal.com/news/international/2002/09/02/22732.htm
The St. Paul’s plan to spin-off its reinsurance operations to Platinum Underwriters Holdings Ltd, a newly formed Bermuda company, has become the latest victim of the free fall in the world’s equity markets.
At the beginning of July the St. Paul announced that it was postponing the initial public offering of Platinum shares due to the increasingly unfavorable market conditions. Friday’s announcement apparently recognized that things have only gotten worse since then. The IPO market is virtually at a standstill, with few companies willing to offer shares in the face of virtually nonexistent demand.
The St. Paul originally planned to offer 75.1 percent of Platinum’s shares for sale, approximately 40 million, from which it hoped to raise more than $900 million. It’s now reduced the number of shares it intends to offer to the public to 34 million at $22.50 to $23.50 a share. That would raise around $780 million.
Although no date has been set for the IPO, St. Paul is expected to go ahead with it soon. Under the circumstances – it’s already transferred a good portion of its reinsurance operations to Platinum – it really doesn’t have much choice, as the only other alternatives appear to be to either cancel the deal entirely, or negotiate with a third party to come in as a partner.