US Treasury cashes out of Lincoln Financial


US taxpayers are no longer investors in Lincoln Financial Media, the radio group subsidiary of Lincoln Financial Group. The US Treasury announced Friday (9/17) that it had sold its warrants to purchase the company’s common stock.

Lincoln Financial Media was the only broadcast group to receive an investment by the government through the TARP program to shore up financial institutions. That’s because the parent company, Lincoln Financial Group, is a major insurance company. It bought back the $950 million of preferred stock from the government in June and now the US Treasury has sold its warrants as well.

The Treasury announced Friday that it priced a secondary public offering of 13,049,451 warrants to purchase common stock of Lincoln National Corporation (still the legal name of Lincoln Financial Group) at $16.60 per warrant.  The aggregate net proceeds to Treasury are expected to be $213,671,319. The pricing was well above the minimum bid set at $13.50.  “These proceeds provide an additional return to the American taxpayer from Treasury’s investment in the Company beyond the dividend payments it received on the related preferred stock,” the Treasury’s announcement noted.

“The closing is expected to occur on or about September 22, 2010, subject to customary closing conditions.  The offering was priced through a modified Dutch auction. Deutsche Bank Securities Inc. is the sole book-running manager and C.L. King & Associates, Inc. and The Williams Capital Group, L.P. are the co-managers for this offering.  This offering represents Treasury’s sale of its remaining investment in the Company,” the announcement said.

The warrants have an exercise price of $10.92. So, an investor who bought a warrant from the Treasury at $16.60 is essentially paying $27.52 for a share of Lincoln Financial Group when the warrant is exercised prior to July 10, 2019. The stock had closed Thursday (9/16) at $24.72.

RBR-TVBR observation: Whether or not you approved of the TARP bailout of banks and insurance companies, at least we taxpayers made a profit on this use of our money at Lincoln.