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THE EQUITABLE COMPLETES LARGEST DEMUTUALIZATION EVER IN U.S. HISTORY CONCLUDES INITIAL PUBLIC OFFERING AND SIGNIFICANTLY BOOSTS CAPITAL

THE EQUITABLE COMPLETES LARGEST DEMUTUALIZATION EVER IN U.S. HISTORY
 CONCLUDES INITIAL PUBLIC OFFERING AND SIGNIFICANTLY BOOSTS CAPITAL
 NEW YORK, July 22 /PRNewswire/ -- The Equitable Life Assurance Society of the United States today officially concluded its demutualization when its parent, The Equitable Companies Incorporated (NYSE: EQ), completed an initial public offering of 50 million shares of common stock at $9.00 a share for total proceeds of $450 million. The transaction also converts an earlier $1 billion investment by AXA, a large French insurance holding company, into common equity and preferred securities, further augmenting The Equitable's capital.
 The conversion from a mutual to a shareholder-owned company breaks new ground for the insurance industry: it is the largest in the history of the United States and is the first under New York State's demutualization law, passed in 1988. The plan to demutualize was first announced by The Equitable in December 1990.
 "This is a watershed day for The Equitable. Our successful capital- raising program has significantly increased the company's capital base," said Richard H. Jenrette, chairman and chief executive officer of The Equitable. "Our policyholders and shareholders will benefit from Equitable's increased financial strength and from its enhanced competitive position."
 The $1 billion AXA investment will be exchanged for 49 percent of Equitable's outstanding common stock. AXA also receives preferred stock.
 "The exchange with AXA today represents the final handshake in a new global partnership that was forged when we signed the investment agreement in July 1991," Mr. Jenrette said. "Together, The Equitable and AXA now manage a combined total of nearly $200 billion in assets on a global basis, positioning us as a leader among the largest insurance and investment companies in the world."
 DISTRIBUTION OF SHARES TO POLICYHOLDERS
 Certain eligible policyholders will receive policy credits or cash. After these distributions, approximately 16 percent of Equitable's outstanding common stock will be issued to eligible policyholders in return for their membership interest in the former mutual company. Equitable's conversion to a stock company does not change policy values, premiums or guarantees in any way, and dividend-paying policies will continue to receive dividends as declared.
 DISTRIBUTION OF SHARES IN IPO
 43.5 million shares were offered on July 15, 1992 in the United States and in a concurrent international offering. Due to investor demand, the underwriters exercised their option to purchase an additional 6.5 million shares on the first day of trading, bringing the total shares of The Equitable Companies Incorporated common stock in the initial public offering to 50 million.
 DISTRIBUTION OF PROCEEDS
 Net proceeds, after underwriting and other expenses, totaled $416 million. Approximately $67 million is being used to provide cash-out payments and policy credits to eligible policyholders as part of the demutualization plan; $129 million is being used to increase The Equitable Life Assurance Society's statutory surplus; and $220 million has been retained by The Equitable Companies Incorporated for general corporate purposes, including the payment of dividends and expenses. Equitable's surplus has been further enhanced by the conversion of AXA's $750 million in secured notes, which was previously not counted as part of surplus. The balance of AXA's $1 billion investment -- $250 million in surplus notes -- was already counted as part of Equitable's surplus.
 PIONEERING NEW TERRITORY
 Equitable completed its plan of demutualization approximately 18 months after it was initially announced. "We were pioneering new territory, and most observers said it would take far longer to complete," Jenrette stated. "Securing AXA's $1 billion investment a year ago and completing our initial public offering in a difficult environment were major accomplishments. It would not have been possible without a tremendous effort on the part of Equitable people and our advisors, and the hard work of the regulatory authorities, especially the New York State Insurance Department."
 THE EQUITABLE
 The Equitable is a diversified financial services company serving a wide range of insurance, investment management and investment banking customers. The company has, through its four major investment subsidiaries, approximately $150 billion in assets under management, including nearly $100 billion in third party assets for pension and retirement plans, mutual funds and other investors unrelated to the company's life insurance business.
 The company ranks among the world's largest investment management organizations and is one of the nation's largest life insurance companies as measured by statutory admitted assets.
 The Equitable's major investment subsidiaries are: Alliance Capital Management L.P., one of the largest institutional and individual investment advisors in the U.S. with an outstanding record of growth in mutual funds; Donaldson, Lufkin & Jenrette, Inc., a top provider of investment banking and brokerage services, and a leader in underwriting and distributing securities; Equitable Capital Management Corporation, among the largest U.S. investment managers of tax-exempt assets; and Equitable Real Estate Investment Management Inc., which stands out as the largest U.S. manager of tax-exempt assets invested in real estate.
 -0- 7/22/92
 /CONTACT: Media, Nancy M. Amiel, 212-554-4293, or analyst, Greg Wilcox, 212-554-2595, both of The Equitable/
 (EQ) CO: Equitable Life Assurance Society of the United States;
 Equitable Companies Incorporated ST: New York IN: FIN SU:


KD -- NY043 -- 1800 07/22/92 10:53 EDT
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Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Publication:PR Newswire
Date:Jul 22, 1992
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