My father owns some regular Met Life stock. He was recently sent a letter asking him if he wants to...?

Question

transfer his Met Life regular stock into Reinsurance Group of America, Inc Class B common stock. This Reinsurance Group of America is also owned by Met Life. What do you think are the pros and cons if he does or doesn't decide to transfer the stock?

Answer 1

I'm not familiar with this specifically, but recommend for ANY activity, that you gather info, and then ask the 'experts', to help you understand the info and come to a decision.

Companies most often do things to benefit them and not you the stock holder, so you have to pay attention and ask questions.

First and foremost, ASK MET LIFE why they are offering this. They will give you pro's and con's, but probably just info to make your own decision. I'd also ask the Reinsurance Group of America what they think of this action, and their view of pro's and con's, but again they'll just give pro/con info and not direct you on a decision.

Gather the info, then go to your dad's financial advisor if he has one, or to his brokerage firm if he doesn't, and ask them about all of this--its their job to help you understand the details so you can make an informed decision.

You/he have to understand why this option is being offered, what the cost/fees could be and why, what the implications are for his situation (is it in his retirement account? a company-held account? what?), what the tax implications are, etc.  Don't ask only what you gain by doing it, but what happens if he doesn't (more pro's and con's there).

Good luck!

Answer 2

The pro is that he will receive a 10% discount to the 3 day average price of the two share prices prior to the Sept 11 conversion date.  Sort of an ominous date for the conversion.  This is a spin off from Met Life after which they will no longer have an iterest.  I do not know of all the cons.  One is that the offer might be over subscribed and he might wind up with both stocks.  That might be a disadvantage commission wise when it comes time to sell.  two commissions.  It is my opinion that both companies are about equal in fundamentals. MET does have a better dividend.  2x as good.  

Answer 3

if you wanted to own RGA, you could have just bought that stock instead (or sold your MET to buy RGA).

unless they're offering a conversion rate that would give you an instant profit, and let you sell the RGA and get back into MET, i wouldn't bother doing it.