XL Capital responds to market rumours it is putting itself on auction block

XL Capital Ltd. (NYSE: XL) has responded to — but did not confirm or deny — rumours that the insurer is exploring the option of putting itself up for sale amid reports of large Q4 investment losses.
“The company remains focused on operating its business and meeting the needs of its customers and is committed to taking actions as necessary to maximize value for its shareholders,” the company reported in a statement.
“In that regard, as can be expected in the current environment, the company is continuing to explore value-enhancing opportunities available to it and is being assisted in that effort by one of its longstanding financial advisors, Goldman, Sachs & Co.”
Bloomberg reported on Dec. 10 that XL hired Goldman Sachs Group Inc. to gauge interest from potential bidders. The insurer’s stock plummeted more than 30% in New York, “trading to the lowest level since the company went public 17 years ago,” Bloomberg reported.
Selling at US$84.83 per share in July 2007, the company’s stock closed out the day of Dec. 10 at a share price just under US$4.00.
In a statement released on Dec. 10, the company said it anticipates the estimated mark-to-market decline in investment portfolio due to changes in credit spreads and interest rates since the end of the third quarter of 2008 would be largely in line with that reported for the third quarter of 2008.
“In addition, the company estimates that it will report approximately US$200 to US$220 million in net investment fund affiliate losses from its alternative investment portfolio for the fourth quarter of 2008,” XL’s statement said.