(GuruFocus, October 8, 2009) Berkshire Hathaway (BRK-A) (BRK-B) and White Mountains Insurance Group Ltd. (WTM) maybe selling some of their stakes in another insurance company Symetra Financial Corp.. That is what Symetra Financial’s S-1A filing with SEC is saying. For the second time since 2007, the privately held Symetra filed with SEC for and IPO. This time, it plans to raise $575 million. It tried to the same thing in 2007 but pulled out because of unfavorable IPO environment.
According to Jonathan Weil with Bloomberg, who researched the filing paper: Berkshire Hathaway, White Mountains Insurance Group and a few other minority sharesholders took Symetra Financial private in 2004 from the hands of insurance company Safeco Corp. Berkshire and White Mountains each controls about 26.3% of Symetra.
After that, the investors behaved more like private equity investors than good steward. Namely they milked the acquired company to the maximum extent. Symetra paid $300 million dividend in between 2006 and 2007, so much so that the company had to fund the dividend with borrowed money.
In addition, White Mountains collected $57 million from Symetra for managing its portfolio. That is 1% of the total asset under management per year. Symetra has about $21 billion asset in its balance sheet.
Jonathan Weil of Bloomberg is rather negative towards Symetra IPO and how the shareholders behaved after they took over.
It is not certain if Berkshire and WTM are indeed selling, even though they are listed as potential seller in the filing/
“If he is, I am not buying”, so said Jonathan Weil, referring to Berkshire Hathaway's Chairman and CEO Warren Buffett.
Watch the detailed analysis of the IPO in this Bloomberg video:
According to Jonathan Weil with Bloomberg, who researched the filing paper: Berkshire Hathaway, White Mountains Insurance Group and a few other minority sharesholders took Symetra Financial private in 2004 from the hands of insurance company Safeco Corp. Berkshire and White Mountains each controls about 26.3% of Symetra.
After that, the investors behaved more like private equity investors than good steward. Namely they milked the acquired company to the maximum extent. Symetra paid $300 million dividend in between 2006 and 2007, so much so that the company had to fund the dividend with borrowed money.
In addition, White Mountains collected $57 million from Symetra for managing its portfolio. That is 1% of the total asset under management per year. Symetra has about $21 billion asset in its balance sheet.
Jonathan Weil of Bloomberg is rather negative towards Symetra IPO and how the shareholders behaved after they took over.
It is not certain if Berkshire and WTM are indeed selling, even though they are listed as potential seller in the filing/
“If he is, I am not buying”, so said Jonathan Weil, referring to Berkshire Hathaway's Chairman and CEO Warren Buffett.
Watch the detailed analysis of the IPO in this Bloomberg video:
