MetLife policyholders OK demutualization
Nearly 2.6 million policyholders of Metropolitan Life Insurance Co. have given the thumbs-up to the company's plan to convert itself into a publicly traded company.
MetLife's proposed demutualization, which is the process of transferring ownership from policyholders to stockholders, was approved by 93 percent of the eligible policyholders who voted by ballot by the Feb. 7 deadline. The final tally was 2,572,832 in favor and 188,914 against.
To be eligible to receive compensation in the form of stock, cash, or policy credits, you must have a MetLife policy in force as of Sept. 28, 1999, the day the company's board of directors approved the demutualization plan. MetLife plans to issue between 236 million and 238 million common shares of stock at its initial public offering (IPO). The IPO price is expected to range between $14 and $24 a share. The offering is expected to raise between $3.3 and $5.7 billion.
In addition to shares issued to investors, policyholders will receive 576 million shares that will be put into a trust. After the close on the IPO date, policyholders can then sell their shares or have them remain in the trust for one year. After that, policyholders can withdraw the stock from the trust and place it in their own brokerage accounts, according to Holly Sheffer, a MetLife spokesperson. Policyholders will not be able to purchase additional shares until 90 days after the IPO.
The demutualization plan still needs approval from Neil Levin, superintendent of the New York Department of Insurance. Sheffer says MetLife's IPO is slated for late March or early April.
Prudential Insurance Company of America and Sun Life Assurance Co. of Canada both plan to have IPOs by the end of 2000.
John Hancock Financial Services had its IPO on Jan. 28. After opening at $17 a share, the company saw its stock price drop below 20 percent of the initial offering on Feb. 15, to 13 15/16, before recovering slightly in the following days.