ICH Selling All but Its 2 Largest Insurance Units

DALLAS — ICH Corp. said Tuesday that it will sell all but its two largest insurance subsidiaries--including a $495-million deal with a Dallas-based group of investors--in a move to increase its book value, cash flow and earnings.

The investor group, Hicks, Muse & Co. of Dallas, said it will buy operating companies with assets of $2 billion from ICH, which is based in Louisville, Ky. Hicks Muse offered last July to take over all of ICH for $425 million in cash and assumption of $1.69 billion in debt and preferred stock.

The companies are Philadelphia Life, based in Dallas, and the Denver-based firms Massachusetts General Life, Wabash Life, All American Life and Chase National Life. Current management will be retained and ICH President John W. Gardiner will remain as a director, according to Hicks Muse.

ICH also announced that it has signed a letter of intent to sell Great Southern Life to Financial Holding of Kansas City, Mo., for $145 million.

But ICH said it will keep Southwest Life, based in Dallas, and Bankers Life & Casualty, headquartered in Chicago. The two units accounted for 73% of ICH’s assets as of June 30. ICH said it expects to book one-time losses of about $85 million this year because of the deals and the writedowns of assets held by various subsidiaries.

ICH has also said it wants to sell its 20% stake in Los Angeles-based First Executive Corp. to Rosewood Financial, an investment company owned by Dallas oil heiress Caroline Rose Hunt but under a “standstill” agreement must first obtain the insurer’s approval.

Hicks Muse was formed by John R. Muse and Thomas O. Hicks, a founding partner of Hicks & Haas, which included Dr Pepper and 7-Up among its acquisitions. The partnership, which invested $4 billion during its four-year life, broke up May 11, citing philosophical differences.