Will St. Paul Travelers Cos. be able to get its asking price for its controlling stake in Nuveen Investments? That question was raised by the Wall Street Journal
Tuesday. St. Paul is selling its 79 percent stake in Nuveen as part of an effort to build its cash hoard. Morgan Stanley and Merrill Lynch are St. Paul's advisor on the deal.
Nuveen, which is publicly traded, carries a market cap of about $3.8 billion. That could be more than any buyer wants to pay, reports the paper. Still, while the price may mean that only larger firms could consider pulling the trigger on a deal, Nuveen may not be overvalued.
The firm manages $115 billion and added $8.1 billion in new assets in the fourth quarter of 2004. At its current price, it is valued at 3.3 percent of assets under management, an amount in line with other deals, albeit on the high side.
Still, that price may be hard to obtain in a rush, and St. Paul is reportedly in a rush. The paper says it wants to find a buyer by the end of June. If it can't it may resort to selling its shares in the secondary market.
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