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Liberty Financial mulls sale
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November 1, 2000: 5:18 p.m. ET
Asset manager sets restructuring, considers selling firm
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NEW YORK (CNNfn) - Asset management firm Liberty Financial Companies Inc. is considering strategic options including the sale of the company to boost its lagging share price.
Liberty said Wednesday it hired Credit Suisse First Boston to review strategic alternatives and also plans to embark on cost-cutting and streamlining measures.
 "Liberty Financial has always been committed to creating long-term value for our shareholders, and we believe that, over the years, we have indeed created substantial value," Chairman, President and CEO Gary L. Countryman said. "But the plain fact is that the market has not fully recognized the value that has been created."
Wall Street applauded the news and Liberty's shares, which have traded between $17 and $28 for the past 52 weeks, soared $9 to $36.
An analyst who follows the company said shareholders have been after the company to put itself on the market for a while, as the company would never get fair valuation as a publicly traded minority interest.
Liberty Mutual Insurance owns about 70 percent of the company.
The analyst was puzzled at why the company chose to sell now, but said there would be no shortage of buyers.
Liberty also announced third-quarter earnings excluding restructuring charges of $32.3 million, or 66 cents per share, compared with $32.9 million, or 68 cents per share, a year earlier. Analysts surveyed by First Call were expecting 63 cents.
As part of its restructuring plan, Liberty is selling the Private Capital Management division of Stein Roe & Farnham Inc. for $40 million cash and debt. It also plans to merge a number of its smaller mutual funds.
"We are well under way in an aggressive program to reduce costs, streamline our management structure and better focus our efforts on those areas which we believe have the greatest opportunities for earnings growth," Countryman said.
Liberty (L: Research, Estimates) manages more than $65 billion and has
about 1.8 million customers. The company had revenue of more than $1.2 billion in 1999. 
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Liberty Financial
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