Reuters: Global Markets: Old Republic shares slip as co cancels unit spin-off

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Old Republic shares slip as co cancels unit spin-off Jun 25th 2012, 14:54 Mon Jun 25, 2012 10:54am EDT (Reuters) - Shares of Old Republic International (ORI.N) fell 9 percent on Monday after the mortgage insurer withdrew the spin-off of its unit Republic Financial Indemnity Group (RFIG) following objections from certain stakeholders. On Friday, Old Republic canceled the spin-off and reversed the partial leveraged buyout of the unit to a group led by its President Christopher Nard and other individual investors. The spin-off and sale of the business, which includes the money-losing consumer credit indemnity and mortgage guaranty insurance units, would have established RFIG as a separate publicly traded company. The stakeholders argued the spin-off would hurt their interests and expectations, Old Republic said. The company did not name the stakeholders that raised the objections. State Street Global Advisors, Loomis Sayles & Co, Capital Research Investors, Franklin Advisory Services are among the largest shareholders in the company, according to Thomson Reuters data. Old Republic's plans to spin-off its business were being watched as a possible solution for mortgage insurers who need to raise capital after the housing collapse left them with billions of dollars in losses. Private equity has been flowing to new entrants in the mortgage insurance market, but established insurers like MGIC Investment (MTG.N), Radian Group Inc (RDN.N) and Genworth Financial (GNW.N) are still losing money on home loans issued at the height of the mortgage boom. Fitch Rating and Moody's Investor Services had both placed the insurer on watch for a possible credit upgrade following the spin-off announcement. Old Republic shares were down 9 percent at $8.45 in morning trade on the New York Stock Exchange. (Reporting by Jochelle Mendonca in Bangalore; Editing by Roshni Menon) Link this Share this Digg this Email Reprints

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