SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
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[ ] Preliminary Proxy Statement
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[ ] Soliciting Material Under Rule 14a-12
THE MONY GROUP INC.
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(Name of Registrant as Specified in its Charter)
AXA FINANCIAL, INC.
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(Name of Person(s) Filing Proxy Statement if Other than the Registrant)
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[AXA Financial Letterhead]
April 27, 2004
Dear MONY Shareholder,
As you are deciding how to vote your shares on May 18th, I thought it would be
helpful to give you AXA Financial's perspective on its proposed merger with The
MONY Group Inc. We have been working hard with MONY since September 2003 to
secure all of the approvals required to successfully and promptly close the
transaction. We continue to believe that our proposal of $31 in cash per share
(plus MONY's approximately $0.33 to $0.35 per share cash dividend) is full, fair
and in the best interest of MONY shareholders.
Nevertheless, a small but vocal group of dissident shareholders, including
"hedge fund" managers such as Highfields Capital Management, are doing you a
terrible disservice in our view by opposing this transaction and encouraging you
to do the same. In fact, as discussed below, we believe that Highfields is
playing a "double" game, potentially at your expense. We also believe you are
disserved by Institutional Shareholder Service's ("ISS") February 10, 2004
recommendation against this transaction. Indeed, in the 60 plus days that have
passed since ISS's recommendation, a number of new developments have occurred
that further illustrate why we believe you should vote for the AXA Financial
merger, including the following developments:
1. RESEARCH ANALYSTS CONTINUE TO SUPPORT THE TRANSACTION
Well-respected equity research analysts continue to state that there could be an
erosion of shareholder value if the transaction is not completed. For example,
on April 7, 2004 Joan Zief of Goldman Sachs issued an "under perform" or "sell"
rating on MONY, noting the risk to MONY shareholders if there is no transaction.
Another highly respected analyst, Vanessa Wilson of Deutsche Bank, said as
recently as March 22, 2004 that AXA Financial's proposal is a "fair price for
the MONY Group franchise" and is "in line with recent transactions" in the life
insurance industry, including SAFECO's $1.4 billion sale of its life insurance
business for 78% of book value (announced March 15, 2004). Moreover, she notes
that MONY'S STOCK PRICE COULD FALL SIGNIFICANTLY if there is no transaction with
AXA Financial.
2. WHILE HIGHFIELDS IS TELLING YOU TO VOTE "NO" AND ACCEPT UNCERTAINTY AND
DOWNSIDE RISK, THEY FAILED TO DISCLOSE THAT THEY ENTERED INTO TRADES THAT
WOULD PROFIT IF THE AXA FINANCIAL-MONY MERGER IS NOT COMPLETED
Despite its vigorous public opposition to the AXA Financial-MONY transaction,
Highfields failed to disclose important information regarding its economic
motivations in opposing the transaction until it was forced to do so in recent
court proceedings. During these recent proceedings, it was revealed that
Highfields had a $25-$30 million short position (as of February 17, 2004) in the
convertible bonds ("ORANs") that AXA issued to finance the MONY transaction.
Because of the terms of the ORANs, this means that Highfields would profit from
this short position at the expense of MONY stockholders in the event the AXA
Financial-MONY merger is not completed.
Put differently, we believe other MONY shareholders would lose money if there
were a "No" vote. But we also believe that Highfields would make money on its
ORAN short if the AXA Financial-MONY transaction is not completed and would lose
money on its ORAN short if it were completed. We believe it is possible that
other dissidents may have similar positions in the ORANs, providing them with an
economic incentive to vote against the MONY transaction for reasons that have
nothing to do with the best interests of other MONY shareholders. We believe
that this may explain why at least some of the
dissidents continue to try to thwart the AXA Financial-MONY transaction, while
at the same time conceding that MONY's stock price will likely decline if the
transaction is not approved.
3. MONY'S ALREADY-LOW RATINGS ARE LIKELY TO DROP FURTHER IF THERE IS NO AXA
FINANCIAL-MONY DEAL, AND ADDITIONAL CAPITAL IS NOT A SOLUTION
Since ISS issued its recommendation on February 10, 2004, rating agencies have
continued to suggest that a "No" vote could result in a downgrade of MONY.
Standard & Poor's has already downgraded MONY and said on February 19, 2004 that
MONY's ratings "are likely to be lowered by an additional one or two notches" if
there is no transaction with AXA Financial. On February 23, 2004 Moody's said
that if there is no transaction, there is "the possibility that MONY's ratings
need to be adjusted downward."
A TWO-NOTCH DOWNGRADE BY S&P WOULD MEAN THAT MONY WOULD HAVE A JUNK-BOND DEBT
RATING. Moreover, a one- or two-notch downgrade in MONY's insurance company
ratings could have very drastic implications for its ability to retain customers
and producers.
The dissident shareholders continue to argue that MONY's ratings can be
maintained with more capital. However, the published commentary from the rating
agencies does not suggest that MONY's lower ratings result from a lack of
capital. In fact, S&P writes of MONY's already "very strong" risk-adjusted
capitalization and liquidity. Moody's cites MONY's need to achieve a "higher
level of consistent profitability" and "increased economies of scale and market
presence."
4. NO OTHER BIDDERS HAVE EMERGED FOR MONY DESPITE AN AMPLE OPPORTUNITY TO DO
SO
Despite criticism by ISS and others that MONY failed to follow "an auction
process" - criticism rejected by the Delaware Court of Chancery - other bidders
have had 7 months to come forward with a better offer. None has. This is telling
because the financial services M&A market is too efficient and competitive to
allow below-market bids to stand.
The dissidents and ISS argue that the standard break-up fee and no-shop
provisions in MONY's agreement with us, MONY's inability to provide confidential
due diligence materials to other parties prior to their making an offer, and the
change in control provisions in MONY's senior management employment agreements
have impeded any competing offers. Experience teaches otherwise. AIG acquired
American General after breaking up American General's merger agreement with
Prudential Plc, despite a $600 million break-up fee, non-solicit provisions and
change in control provisions for American General management. Furthermore,
topping bids (such as AIG's bid for American General) are often initially made
based only upon publicly available information. Moreover, the Delaware Court of
Chancery has already ruled that the break-up fee in the merger agreement is well
within the range of reasonableness.
5. THE DISSENTERS HAVE MADE NO PROGRESS IN PROVIDING CONCRETE ALTERNATIVES TO
OUR TRANSACTION
The dissidents have yet to offer any plans for a realistic alternative to the
AXA Financial-MONY transaction. Seven months is plenty of time to put together
and communicate a concrete action plan but nothing has been done in this
respect.
While the dissidents speak of new management as the solution to MONY's
challenges, it would require a tremendous leap of faith to believe that any
management team could transform a standalone MONY given problems so
fundamentally rooted in lack of scale, deteriorating credit profile and poor
standalone earnings prospects. An even greater leap of faith is the belief that
such a standalone transformation could occur over any reasonable investment
horizon. RECALL THAT DESPITE A 26% INCREASE IN THE S&P 500 IN 2003, MONY ONLY
PRODUCED $5.4 MILLION OF AFTER-TAX GAAP EARNINGS IN 2003 (EXCLUDING NET CAPITAL
GAINS) -- AN ROE OF CLOSE TO 0%.
I agree with the dissidents that the future of MONY is in your hands. However, I
strongly believe that any vote other than a "Yes" vote on May 18th is a vote
that will needlessly put your investment in MONY at risk. AXA Financial urges
you to vote your shares in favor of the transaction.
Sincerely,
Christopher M. Condron
Consent to use the above quotations has neither been sought from, or given by,
the authors.
ABOUT AXA FINANCIAL
AXA Financial, Inc., with approximately $508.3 billion in assets under
management as of December 31, 2003, is one of the world's premier financial
services organizations through its strong brands: The Equitable Life Assurance
Society of the U.S., AXA Advisors, LLC, Alliance Capital Management, L.P.,
Sanford C. Bernstein & Co., and its wholesale distribution company, AXA
Distributors, LLC. AXA Financial is a member of the global AXA Group, a
worldwide leader in financial protection and wealth management.
IMPORTANT LEGAL INFORMATION:
The MONY Group Inc. has filed a revised definitive proxy statement and MONY and
AXA Financial intend to file other documents regarding the proposed acquisition
of MONY by AXA Financial with the Securities and Exchange Commission (the
"SEC"). Before making any voting or investment decision, investors and security
holders of MONY are urged to read the revised proxy statement regarding the
acquisition, carefully in its entirety, because it contains important
information about the proposed transaction. A revised definitive proxy statement
has been sent to the stockholders of MONY seeking their approval of the
transaction. Investors and security holders may obtain free copies of the
revised definitive proxy statement, and other documents filed with, or furnished
to, the SEC by AXA Financial and MONY at the SEC's website at www.sec.gov. The
revised definitive proxy statement and other documents may also be obtained for
free from MONY and AXA Financial by writing to Shareholder Services, MONY, 1740
Broadway, New York, NY 10019; Attn. John MacLane (jmaclane@mony.com), or to AXA
Financial, 1290 Avenue of the Americas, New York, NY 10104, Attn. Robert Walsh
(Robert.Walsh@axa-financial.com).
FORWARD LOOKING STATEMENTS
Certain statements contained herein are forward-looking statements including,
but not limited to, statements that are predictions of or indicate future
events, trends, plans or objectives. Undue reliance should not be placed on such
statements because, by their nature, they are subject to known and unknown risks
and uncertainties, including the risk that the proposed acquisition may not be
consummated. AXA Financial claims the protection afforded by the safe harbor for
forward-looking statements as set forth in the Private Securities Litigation
Reform Act of 1995. Forward-looking statements are subject to many risks and
uncertainties. The following factors, among others, could cause actual results
to differ materially from those described herein or from past results: the
failure of the MONY stockholders to approve the transaction; the risk that the
AXA Financial and MONY businesses will not be integrated successfully; the costs
related to the transaction; inability to obtain, or meet conditions imposed for,
required governmental and regulatory approvals and consents; other economic,
business, legal, competitive and/or regulatory factors affecting AXA Financial's
and MONY's businesses generally; and the risk of future catastrophic events
including possible future terrorist related incidents.
Please refer to AXA Financial's Annual Report on Form 10-K for the year end
December 31, 2003 for a description of certain important factors, risks and
uncertainties that may affect AXA Financial's business.
AXA Financial does not undertake any obligation to publicly update or revise any
of these forward-looking statements, whether to reflect new information, future
events or otherwise.
AXA Financial and MONY file reports and other information with the SEC. You may
read and copy any reports and other information filed by the companies at the
SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549.