Prudential Unit Isn't Likely to Be Spun Off Wall Street Journal (10/09/00) Vol. 104, No. 40 p.C1; Gasparino, Charles; Smith, Randall
Specualtion over whether Prudential Life Insurance Co.
of America would spin off its Prudential Securities brokerage
division ended on Friday with the sudden departure of the unit's
chief executive. Last week, Hardwick Simmons, who had supported
the sell of Prudential Securities, shocked industry observers
when he stepped down from his post without warning. Simmons'
departure all but guarantees that Prudential will not proceed
with the sale of Prudential Securities. The decision effectively
ends nearly a year of conjecture and internal upheaval within the
firm, all taking place as Prudential prepares to go public.
Simmons is rumored to have been increasingly agitated with the
company's marginal position on Wall Street, and lobbied the
parent company to spin off Prudential Securities. Simmons also
wanted to take Prudential Securities beyond retail brokerage into
capital markets and investment banking. But Prudential CEO
Arthur Ryan soundly rejected the proposal. Simmons is expected
to be replaced by John Strangfeld.