AXA executives held a conference call with securities analysts earlier this week to talk about the company’s plans to buy XL Group, a reinsurer, for $15.3 billion.
Some of the analysts asked Thomas Buberl, AXA’s chief executive officer, and other AXA executives about AXA’s plans to sell stock in AXA Equitable to the public, through an initial public offering (IPO).
That deal raises the possibility that Equitable, which is based in New York, was once one of the dominant players in the U.S. life insurance market, could get more independence from its corporate parent.
(Related: AXA Talks More About U.S. Life Spinoff)
Here are three of the executives’ answers, based on a transcript of the conference call filed with the U.S. Securities and Exchange Commission.
- When will the IPO really take place?
The company has talked about completing the IPO “in the second quarter” — by June 30.
Gérald Harlin, AXA’s chief financial officer, said the actual timing of the IPO will depend on market conditions.
“We are not in a rush here,” Harlin said. “It could be in two or three years. The most important point is that we have no constraints.”
2. How much of AXA Equitable’s stock does AXA intend to sell?
About a year ago, AXA executives said they were thinking of selling a minority stake in AXA Equitable.
During this week’s conference call, Buberl said AXA could sell more than a minority stake in AXA Equitable.
AXA expects to sell “a first tranche” in the second quarter of this year, Buberl said.
“Market conditions are good, but the aim is to fully exit the U.S. life business over time,” Buberl said. “Obviously, the markets need to be attractive, otherwise we would not do it.”
3. Does AXA need to complete an AXA Equitable deal to pay for XL?
AXA presented a slidedeck slide showing that it intends to use $6 billion from an AXA Equitable IPO to pay for the XL Group.
During the conference call, however, Buberl said the XL deal and the AXA Equitable IPO are “fully separate” transactions.
The IPO “is not a condition for this transaction and combination with the XL Group,” Buberl said.
AXA does, however, need to complete the AXA IPO to shift to a property-casualty insurance focus, from a life insurance focus, Buberl said.
— Read AXA Aims at U.S. Benefits Market With Administration Firm Dealon ThinkAdvisor.