Hartford Gets $2.5 Billion From Allianz

Hartford Financial (HIG Quote) said it has agreed to a $2.5 billion capital investment from Allianz SE(AZ Quote), plans to cut its dividend and will report a loss in the third quarter.

For $31 a share, Allianz will purchase $750 million of preferred shares convertible to common stock after receipt of applicable approvals, and $1.75 billion of 10% junior subordinated debentures. Allianz also will receive warrants which entitle it to purchase $1.75 billion of common stock at an exercise price of $25.32 a share, subject to shareholder approvals. The warrants expire in seven years.

Insurer Hartford said it plans to cut its quarterly dividend to 32 cents a share from 53 cents. ...