John Paulson, who controls the biggest stake of Hartford Financial Services Group Inc. (HIG), held a call with analysts covering the insurer as he increases pressure on Chief Executive Officer Liam McGee to break up the company.
Paulson urged equity analysts including Andrew Kligerman of UBS AG and Randy Binner of FBR Capital Markets to back his plan, which would split Hartford’s life-insurance unit from property- casualty operations. The billionaire hedge fund manager, whose Paulson & Co. owns more than 8 percent of Hartford, said on today’s call that McGee has “no excuse” for waiting.
Paulson challenged McGee in February to consider a split to boost the stock. The insurer based in Hartford, Connecticut, is the third-worst performer in the 24-stock KBW Insurance Index (KIX) over the last two years. McGee, who repaid a U.S. bailout in March 2010, has struggled to regain the level of profitability achieved before the 2008 and 2009 financial slump.
Shannon Lapierre, a spokeswoman for Hartford, declined to comment. She referred to a Feb. 14 statement in which Hartford said it recognized potential benefits to a split and planned to continue talking to Paulson. Armel Leslie, a spokesman for Paulson, didn’t immediately return a call seeking comment.
Hartford should announce its intention to split the two main businesses in a transaction that may take a year and a half to complete, Paulson said.
McGee and Paulson clashed last month on a conference call hosted by the insurer to discuss fourth-quarter earnings with analysts and investors. McGee told Paulson that while he had “an incredible sense of urgency” to make changes that would boost the stock price, a split probably wouldn’t create value for shareholders. Hartford cited its credit ratings and regulatory approvals among the challenges to a split.
To contact the reporter on this story: Andrew Frye in New York at firstname.lastname@example.org
To contact the editor responsible for this story: Dan Kraut at email@example.com.