Executives at Prudential Financial Inc. say the company wants to sell its stake in Wachovia Securities to the other co-owner.
The other co-owner, which has a contractual obligation to buy the stake, now is Wachovia Corp. By the end of the year, the counterparty will be Wells Fargo & Company, San Francisco, according to Prudential, Newark, N.J.
Prudential executives talked about the securities venture today at their annual investor day conference.
Prudential and Wachovia created the joint venture in 2003, when Prudential sold its highly regarded securities brokerage to Wachovia.
When Wachovia acquired A.G. Edwards & Sons Inc., St. Louis, Wachovia compensated Prudential for dilution of its stake in the venture by giving Prudential a “put option” to sell its stake to the other co-owner of the venture.
Wells Fargo is now in the process of acquiring Wachovia.
“We intend to exercise our lookback put,” Prudential says in a copy of an investor day slide presentation filed with the U.S. Securities and Exchange Commission.
The valuation was established Jan. 1, 2008, and should be about $3.7 billion after tax, Prudential says.