Truist Financial
is acting as if a traditional activist investor is nipping at its heels—even though one hasn’t appeared.
The bank (ticker: TFC) is reportedly planning to sell its remaining 80% stake in an insurance-brokerage business to private-equity firm Stone Point Capital for $10 billion. Stone Point bought a 20% stake in the insurance business in February for $1.95 billion.
The reported sale comes roughly a week after Truist revealed in a filing a classic activist move: rethink the board. Eight of Truist’s directors will be stepping down at year end—four as they reach mandatory retirement age and the others moving on. That will bring the board to 13 directors—12 of them independent—from 21.
Trust declined to comment.
Truist is the product of the 2019 merger of SunTrust Bank and BB&T. Despite promises of synergies, the postmerger bank has missed estimates in 11 of 20 quarters.
Because of the turnaround potential, Truist was a Barron’s stock pick last month, and the choice of a few bulls on Wall Street, too. Wells Fargo Securities analyst Mike Mayo rates Truist stock at Overweight, and has said the company is “primed for an activist.” While one has yet to materialize, Mayo has been encouraged by recent changes.
“It is up to Truist to take strong restructuring moves or risk changes to management near term or independence longer term—i.e., it seems that Truist is less tone deaf to investor concerns,” Mayo wrote this week.
Truist reports third-quarter results on Oct. 19.
Write to Carleton English at [email protected]
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