Deal value-diminishing, timing questionable
The NPV of the divestment of Talcott is $2.0-2.5bn (dependent on tax legislation), not the $3bn initially touted, and results in a 19% hit to BVPS. While the ROE improves rapidly, the biggest benefit to our valuation comes from the incorporation of a 20% tax rate, which we have not yet included in peers' valuations. Some investors will simply be pleased that a deal was announced but we would have preferred less value destruction and more definite financial outcomes. The remaining businesses should prosper under the streamlined corporate structure but at 1.5x P/BV we retain our Neutral rating.Hartford Financial Services Group is a holding company. Through its subsidiaries, the company provides property and casualty insurance, group benefits insurance and services, and mutual funds and exchange-traded products. The company has five segments: Commercial Lines, which provides automobile, property, general liability, and marine coverages; Personal Lines, which provides automobile and homeowners coverages; Property and Casualty Other Operations, which provides group life, group disability, and other products; and Hartford Funds, which provides mutual fund, exchange-traded products, and Talcott Resolution life and annuity separate accounts.
Formed in 2003 by an established team from Cazenove, one of the most respected investment banks in the UK, Atlantic Equities conducts and publishes fundamental, bottom up research on mid and large cap US companies.
Atlantic provide order execution through a wide range of DMA products and algorithmic trading suites.
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