Standard Management Indicates Intent to Sell Life Insurance Subsidiary

November 22, 2004 ( - The Standard Management Corporation has announced that it has signed a non-binding letter of intent to sell its Financial Services Division to an unaffiliated third party.

The Standard Life Insurance Company of Indiana may be purchased by an equity investor group that is experienced in the insurance industry and specializes in asset accumulation, according to a press release from Standard Management. The name of the purchasing company was not released.

The letter of intent states that the proposed transaction would consist of a majority of cash and would most likely include some form of debt. The deal would also include preferred stock of the proposed buyer as well.   The deal is subject to negotiation and entry into a firm agreement – which is anticipated to occur before the end of the year – as well as approval by Indiana regulators, company shareholders, and holders of outstanding Trust Preferred security holders, according to the company. Standard Management’s financial advisor must also confirm that the price of sale is fair from a financial point of view.

The letter provides the equity investor group with a 30-day exclusivity period. It also considers payment by Standard Management of a break-up fee in the event that another buyer purchases the company during the exclusivity period.

If the transaction goes through, Standard Life will continue to operate from its current headquarters in Indianapolis, according to the company. The current Chairman and CEO of Standard Management, Ronald Hunter, would retain his seat on Standard Life’s Board. A large proportion of Standard Life’s employees are also expected to be kept on following any transaction, according to the company.

Standard Life was founded in 1934, and was purchased in 1989 by Standard Management ( ).