Bosco, You'll like this:
Conseco Shares Tumble; Chairman's Ouster Demanded
Carmel, Indiana, April 5 (Bloomberg) -- Conseco Inc. stock declined for a fourth day, bringing its loss since Thursday to 44 percent, as shareholders called for the ouster of Stephen C. Hilbert, the insurer's chairman and chief executive.
``A majority of the largest investors feel that he must step down,' said Michael P. Donnelly, who manages $6.7 billion at Pittsburgh's Federated Investors, including Conseco shares. The stock fell 1 5/16 today, or 15 percent, to 7 5/8, a seven-year low.
The clamor for Hilbert's departure followed the announcement of plans to sell a consumer loan subsidiary acquired less than two years ago. Conseco also said it will cut 1999 earnings by $350 million to reassess loan-linked assets held by unit.
Seeking to allay concern, Conseco today said it already has received inquiries from potential buyers. Further, Conseco said it has enough cash to maintain the unit's business of packaging loans for sale as securities.
``We are disappointed that the market has misunderstood our announcement,' Conseco said in a statement. ``We announced this process because we believe, when completed, we will have eliminated the primary issue of concern for investors over this past year -- namely, our involvement in the finance industry.'
Donnelly expects Conseco will be buoyed by its sale of the subsidiary, formerly known as Green Tree Financial Corp. ``This thing can be resolved in a fashion where some shareholder value is realized or maintained, but the clock is ticking,' he said.
Still, the investor added, Hilbert must take the blame for using aggressive models to value the unit's assets.
Hilbert was unavailable for comment.
The Carmel, Indiana, company also said today it is ``nearing completion' of its audited 10-K filing with the Securities and Exchange Commission, for which it sought an extension. Conseco had reported 1999 net income of $962.2 million.
Apr/05/2000 18:39 |
