Some Money Managers Pan AXAMONY Deal

"Theres a very good and logical fit, and MONY is strong in some high-growth areas where we are not so strong, such as San Francisco, Salt Lake City and Phoenix," Condron says.

If AXA Financial completes the deal, "our distribution systems gain critical mass," says MONY Chairman Michael Roth.

Analysts in the Chicago office of Fitch Ratings say they probably will raise their A+ insurer financial strength ratings on MONYs insurance units one or two notches if the deal goes through.

The deal is subject to shareholder approval, however, and money managers attacked it during a conference call MONY and AXA Financial held to discuss the deal.

"We think the price is ridiculously low, and well certainly vote against it," said G. Stanley Cates, president of Southeastern Asset Management Inc., Memphis, Tenn., a fund manager that owns 4.9% of MONYs stock.

David Keller, another money manager, said the price amounts to only 72% of MONYs tangible book value of $43 per share. Roth told Keller that the book value figure includes $17 in deferred acquisition costs that are not really very tangible, but Keller and other money managers complained that the ratio of the deal price to book value is much worse than the deal price-to-earnings ratio because MONYs earnings have been weak.

Several other money managers said MONY should maximize shareholder value by holding an auction.

Reproduced from National Underwriter Life & Health/Financial Services Edition, September 19, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.