8-KMaterial AgreementsExhibits & Filings

TRAVELERS COMPANIES, INC. 8-K Report, Material Agreement (Apr 1, 2005)

Filed April 1, 2005For Securities:TRV

Summary

This 8-K filing from The St. Paul Travelers Companies, Inc. (now Travelers Companies, Inc.) on April 1, 2005, details significant agreements related to the partial divestiture of its stake in Nuveen Investments, Inc. The primary focus is on a stock repurchase agreement where Nuveen will buy back shares from St. Paul Travelers in two tranches, totaling $600 million. The first repurchase of $200 million is set to occur simultaneously with Nuveen's underwritten public stock offering, and a second forward repurchase of $400 million, plus interest, is scheduled to occur by December 23, 2005, contingent on certain shareholder approvals for investment advisory agreements. The filing also outlines a Separation Agreement designed to govern the relationship between the two companies post-offering and repurchase. This agreement covers cooperation on tax matters, information sharing, and indemnification. Importantly, St. Paul Travelers has agreed to retain a significant voting stake (over 25%) in Nuveen until the forward repurchase settlement date, impacting its governance rights within Nuveen. Upon settlement, St. Paul Travelers will convert its remaining Class B shares, potentially relinquishing special governance rights like director appointment and veto powers. These transactions signal a strategic move by St. Paul Travelers to reduce its holdings in Nuveen, raising substantial capital and reshaping its corporate structure and governance relationship with Nuveen. Investors should monitor the progress of Nuveen's public offering and the required shareholder approvals, as these directly influence the timing and completion of the forward repurchase.

Key Highlights

  • 1The St. Paul Travelers Companies, Inc. entered into a stock repurchase agreement with Nuveen Investments, Inc., where Nuveen will repurchase $600 million of its own stock from St. Paul Travelers.
  • 2The repurchase is structured in two parts: a $200 million repurchase at the closing of Nuveen's public offering and a $400 million forward repurchase due by December 23, 2005.
  • 3The purchase price per share for both repurchases will be based on the net proceeds of Nuveen's public offering, capped at $40 per share.
  • 4Settlement of the forward repurchase is contingent on Nuveen receiving shareholder approvals for new investment advisory agreements from its Registered Funds, but has a hard deadline of December 23, 2005.
  • 5A Separation Agreement was also executed to manage the post-transaction relationship, including cooperation on tax matters and information sharing.
  • 6St. Paul Travelers will retain over 25% of Nuveen's voting securities until the forward repurchase settlement date, maintaining certain governance rights.
  • 7Upon settlement of the forward repurchase, St. Paul Travelers may convert its Class B shares, potentially forfeiting special governance rights such as director appointment and veto powers within Nuveen.

Frequently Asked Questions

Nuveen will repurchase a total of $600 million of its common stock from St. Paul Travelers. This includes an initial $200 million repurchase at the closing of Nuveen's public offering and a subsequent $400 million forward repurchase.

The $400 million forward repurchase is contingent upon Nuveen receiving shareholder approvals for new investment advisory agreements from its Registered Funds. However, regardless of these approvals, the repurchase is guaranteed to settle by December 23, 2005. The settlement date could be earlier if specific voting thresholds for fund approvals are met before August 25, 2005, or after August 25, 2005.

The purchase price per share for both the initial and forward repurchases will be equal to the net proceeds per share received by St. Paul Travelers in Nuveen's underwritten public stock offering. This price is subject to a negotiated cap of $40 per share.

St. Paul Travelers has agreed to retain ownership of shares representing more than 25% of Nuveen's voting securities until the settlement date of the forward repurchase. This allows them to retain special governance rights associated with their Class B shares, such as appointing directors and vetoing certain corporate actions. After the settlement, St. Paul Travelers may convert these shares, potentially losing these special governance rights.