Paulson Pushes Hartford Breakup

Feb 9 2012 | 3:55am ET

John Paulson yesterday launched a blistering attack on one of the country's largest insurers, calling on it to "do something drastic."

During a conference call for analysts and investors, Hartford Financial Services Group CEO Liam McGee said the firm was looking into splitting its life insurance and property-casualty businesses, but warned that such a move would present "significant challenges."

Those planned did not at all appease Paulson, whose Paulson & Co. is the Hartford's largest shareholder with an 8.7% stake and who just suffered the worst year, performance-wise, of his career.

"Hartford needs to do something drastic because the stock is the lowest valuation relative to book value of any major insurance company," Paulson said. "What I'd like to see you do is not merely come back and say, 'Yes, we're looking at strategic options but there's challenges.' How long do we have to wait to hear if there's going to be a positive recommendation to separate these two businesses?"

"What we need you to do is overcome the obstacles… not merely to point out that there's obstacles," Paulson continued. "You need a better explanation of what you're going to do to enhance shareholder value."

McGee told Paulson that he and his team share the hedge fund honcho's "sense of urgency about realizing greater value for shareholders." He added that he did not say that the obstacles to a split "were not surmountable," only that "we do not believe that splitting them in the current environment… will create shareholder value."


In Depth

Q&A: Reg A+ Will Transform the Alternative Asset Landscape

Jul 7 2015 | 4:03pm ET

In addition to easing capital formation for small companies, Regulation A+ has enormous...

Lifestyle

Fiat Chrysler Files Paperwork For Ferrari IPO

Jul 23 2015 | 5:05pm ET

Italian sportscar maker Ferrari has taken a step closer to a stock market listing...

Guest Contributor

Lifting of Foreign Ownership Limits Signals Sea Change in Vietnam's Capital Markets

Jul 28 2015 | 3:01pm ET

The lifting of restrictions on foreign ownership limits in Vietnam later this year...

 

Editor's Note