NU Online News Service, Sept. 18, 2003, 12:15 p.m. EDT – Money managers and buy-side analysts are attacking the $1.5 billion price that AXA Financial Inc., New York, has agreed to pay for The MONY Group Inc., New York.
AXA Financial, a unit of AXA S.A., Paris, will be assuming more than $850 million in debt, and Stanley Tulin, chief financial officer at AXA Financial, said today at a teleconference held to discuss the deal that meeting AXA’s goal of a 15% return on equity will be difficult.
“Right now, we can’t do that,” Tulin said. “[ROE] would grow over time as the synergies grew.”
AXA Financial does not believe that MONY has any excess capital, Tulin added.
AXA Financial President Christopher Condron responded to criticism of the price by saying the success of the deal will depend on AXA Financial’s ability to make it work.
“We don’t see this as a slam dunk,” Condron said. “We don’t see a windfall here.”
But MONY faced outrage from shareholders such as G. Stanley Cates, president of Southeastern Asset Management Inc., Memphis, Tenn.