In news with implications for hundreds of Galveston County employees and thousands across the nation, American National Insurance Co. has hired an investment bank to gauge interest among prospective buyers as the island-based company explores a possible sale, according to reports.
A Reuters news agency report based on “people familiar with the matter” said the U.S. insurer with a market value of more than $3.3 billion was exploring options including a sale. Those sources had cautioned no transaction was certain and asked not to be identified because the matter is confidential, however, Reuters reported.
American National after Reuters' report issued this statement:
“American National has recently been made aware that there have been media reports that speculated about the company exploring strategic options, including a company sale. As a matter of company policy, American National does not comment on rumors or speculation.”
American National CEO Jim Pozzi didn’t respond to request for comment from The Daily News on Wednesday. Other area businesspeople linked to or associated with American National did not return phone calls.
American National is a family of companies founded in 1905 by W.L. Moody Jr. and is still majority-owned by the founder’s family, which controls the company through a range of trusts and holdings.
Brothers Robert Moody Jr. and Ross Moody are great-grandsons of W.L Moody Jr. and in recent years have been feuding over the Moody fortune and legacy, according to lawsuits.
The company and American National subsidiaries, which operate in 50 states, offer a broad portfolio of products and services including life insurance, annuities, property and casualty insurance, health insurance, credit insurance and pension products.
But such diversification of lines has fallen out of favor with Wall Street and the insurance industry has become all about specialization because it’s more profitable to focus on a specific area, Reuters reported. American International Group, for example, has said it would spin its life and retirement business into a new public company.
Exactly what a sale of American National would mean for Galveston County, where 900 employees work in the company’s downtown Galveston tower and 650 in South Shore Harbour offices, wasn’t fathomable to even those with information about the possible sale.
But there was no doubt a sale would have significant repercussions for the county, while reviving questions about American National’s commitment to Galveston, an unusual place for the largest insurance company domiciled in Texas to call home.
That one of the nation’s top insurance companies makes its headquarters in a small resort town such as Galveston is out of loyalty, not business necessity. Typically, such corporations operate from major cities where the pool of skilled workers is large.
In a 2005 interview with The Daily News, Robert L Moody Jr. said the choice of headquarters was personal.
W.L. Moody Jr. was the son of Col. William Lewis Moody, known as ”The Colonel,” who arrived in Galveston in 1866 and made his money from cotton, banking and railroads. The Colonel’s descendants went on to build lucrative hotel and banking businesses and operate massive philanthropic organizations including the Moody Foundation, which operates the island entertainment complex Moody Gardens.
After the 1900 Storm, which killed more than 6,000 people and devastated the island, many businesses left the city never to return.
The Colonel and W.L. Moody Jr. refused to leave and assisted with the city’s rebuilding.
“This was his home, and I think he wanted to see Galveston prosper,” Robert L. Moody said of his grandfather.
American National’s plans are of serious interest. The company is one of the largest private employers in the county.
The company in 2004 stoked speculation when it built a 53,000-square-foot data center in League City. In 2008, it fueled more rumors when it bought a San Antonio building it intended to use as a call and mail center, where about 150 people would be employed.
And in 2009, the company, under the leadership of then-CEO G. Richard Ferdinandtsen, said it would move about 400 employees from its downtown island tower to offices in League City over an 18-month stretch to avoid business disruptions from hurricanes.
American National in recent years has restated and reiterated its commitment to Galveston by building a $15 million parking garage for island employees, and last year announcing plans for a massive, multi-million dollar modernization of its skyscraper at One Moody Plaza.
Pozzi in March said plans were still on course and the modernization was in the design phase.
American National had hired an investment bank to run an auction of the company and prospective buyers recently had been contacted to gauge their interest in a deal, sources told Reuters.
American National Group (NASDAQ:ANAT) stock jumped more than 20 percent, to about $143 from $119, on the Reuters report that the insurer is exploring options that might include a sale.
Its stock closed Wednesday at $141.49.