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UPDATE 3-Primerica to buy back $150 mln of shares from Warburg
April 18, 2012 / 1:21 PM / 5 years ago

UPDATE 3-Primerica to buy back $150 mln of shares from Warburg

* To buy back 5.7 mln shares held by Warburg Pincus

* After deal, Warburg will own about 17.9 pct stake

April 18 (Reuters) - Life insurer Primerica Inc said it would buy back $150 million of its common stock from private equity firm Warburg Pincus, the third time in less than a year that it has bought back shares from large stakeholders.

The buybacks will give Primerica a greater control over its operations, while keeping its public float intact.

Analysts had expressed concerns that the company would use the funds raised through securitization transactions to buy back shares on the open market, further shrinking its public float.

Primerica has about 65.3 million shares outstanding, but only about 86,000 shares are traded on average each day.

A large part of Primerica’s stock is locked up with investors like Warburg Pincus, which owned a quarter of the company before the deal. After the deal, private equity firm will remain the largest shareholder with a 17.9 percent stake.

The insurer will buy back 5.7 million shares held by Warburg Pincus at $26.15 per share, matching Primerica’s share closing price on the New York Stock Exchange on Tuesday.

Raymond James analyst Steven Schwartz said he does not expect any open market buybacks in the near term.

Citigroup sold back the last of its stake in Primerica last December, a little over a year after it spun-off the company through a public listing.

The insurer, which has a market capitalization of about $1.8 billion, was one of the building blocks of the Citigroup financial empire put together by former CEO Sandy Weill, but losses following the sub-prime mortgage crisis and a $45 billion government bailout led to the spin-off.

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