Old Republic International Corp. said it has withdrawn the spinoff of its mortgage insurance and consumer credit indemnity businesses into a separately traded company called Republic Financial Indemnity Group.
The company also said in its press release that the financial effect of the leveraged buyout for RFIG has been reversed. ORI said it was responding to objections raised by “certain stakeholders that RFIG’s separation from ORI would be disadvantageous to their interests and expectations.” The insurer is holding a conference call on Tuesday to further discuss the decision to halt the spinoff.
At noon on Monday, ORI’s common stock was trading nearly 8% lower than its previous close.
It was previously announced that an investor group led by ORI president Christopher Nard had conducted an LBO for 20.6% of RFIG. The three outside investors were to be George Cochran, the chairman, Financial Institutions Group at Macquarie Capital Advisors; David Kimmel, managing partner of Summit Capital LLC; and James W. Schacht, president of the Schacht Group.
Nard was to be RFIG’s president and chief executive, while A.C. Zucaro, ORI’s chairman and CEO was to be its chairman.