NEW YORK - American Express announced on Friday that it had completed the process of spinning-off its brokerage, asset management and insurance unit, Ameriprise Financial Inc.
The leading credit card provider is distributing a special tax-free dividend to its shareholders in the form of one Ameriprise share for every five American Express shares. The company is issuing 246 million shares of common stock of Ameriprise Financial, Inc. American Express will not have any stake in Ameriprise, which was formerly known as American Express Financial Corporation. The Minneapolis-based company happens to be the world's largest brokerage firm with about 12,000 brokers managing an impressive 2.5 million clients. Ameriprise has about $410 billion of assets and $145 billion of life insurance in its balance.
Analysts say that when the company debuts on Monday, they expect the shares to trade at a lower rate since the American Express shareholders are more likely to sell them as soon as they receive it. However, if Ameriprise is fortunate enough to receive adequate capital for its growth, these shares may rise over a period of time, the analysts felt. UBS AG analyst Andrew Kligerman commented in a research note that American Express investors may not be very receptive to Ameriprise, "American Express fits into the mold of a growth stock, while Ameriprise appears to be more of a value play," he said adding that the trend was that spin-offs from other Standard & Poor's 500 companies dropped on thier first day of trading.
Ameriprise will trade on Standard & Poor's 500 index starting Monday under the symbol "AMP."
Posted
on : Sun, 02 Oct 2005 18:05 GMT | Investments News
By : Rob Davis
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