Despite recent published rumors that
According to investment banking sources, price and the preservation of management structure both presented sticking points to previous negotiations. CEO Wade Dokken was said to be trying to sell the business to a company that would allow American Skandia to continue to operate independently. Some have felt that Dokkens desire to stay with the company had further slowed negotiations.
Publicly, Prudential has not announced its intentions for the management at American Skandia. "Its part of the transition issues," said Mary Flowers, spokeswoman for Prudential, adding that the company has put a transition team in place and does not expect the deal to close until the second quarter of 2003.
The price tag of $1.265 billion may come as a surprise to some industry observers; a deal being negotiated with Jefferson Pilot Financial of Greensboro, N.C. [see Annuity Market News, .Oct. 2002] was said to be in the ballpark of $600 million in total considerations. However, Robert Hafner, associate director at
Analyst response to the transaction has been mixed;
Overall, analysts agree that, while potentially hazardous, the combination of the two businesses makes business sense and can be extremely positive for both parties.
-Tamiko Toland