CHICAGO — Prudential Financial Inc. said Thursday that it intends to exercise its right under an option to sell to Wells Fargo Co. its Wachovia Corp. joint-venture interests, valued at more than $3.7 billion after tax on Jan. 1.
In a filing with the Securities and Exchange Commission, Prudential, a Newark, N.J., financial-services company, said it expects the closing of the put transaction would occur on or about Jan. 1, 2010.
During a conference call that was Webcast Thursday, John Strangfeld, Prudential's chairman and chief executive, said Prudential has applied for participation in the Treasury Department Capital Purchase Program, but he did not say how much the company would apply for.
He said the company has the resources to maintain a double-A level of risk-based capital in even worse conditions than have occurred in the fourth quarter, and that the current economic upheaval gave the company an opportunity to grow and outperform its competitors.
"Our expectation is we will weather the storm better than most, and we intend to gain ground" Strangfield said. He said the company is poised to gain ground in its retirement products business in the U.S. and internationally.
Prudential has been reported to be in the running to acquire some of the international life insurance businesses being sold by insurance giant American International Group (AIG), but Strangfield did not directly address the possibility of making acquisitions.
Prudential in 2003 combined its retail securities brokerage and clearing operations with Charlotte-based Wachovia.
On Oct. 3, Wachovia agreed to sell itself to Wells Fargo in a $15.4 billion deal. When the merger occurs, Wells Fargo would be obliged to pick up Wachovia's rights and obligations under the joint venture arrangements, Prudential said.
Prudential shares closed Wednesday at $20.54, up 7.5%.