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MetLife spinoff may take longer than market expectations, Sandler O'Neill says

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MetLife spinoff may take longer than market expectations, Sandler O'Neill says

Sandler O'Neill analyst John Barnidge on April 12 resumedcoverage of MetLifeInc. with a "hold" rating, noting uncertainty surroundingthe company's plan to separate a substantial portion of its U.S. retail business.

Barnidge said MetLife's plan of spinning off, selling or holding an IPO of muchof its U.S. retail business has generated uncertainty around the success and unlockingof capital as a result of the potential divestiture. The analyst said thecourt's decision ofremoving MetLife's nonbank SIFI tag creates uncertainties regarding whether thecompany will proceed with the spinoff plan. The analyst expects the federalgovernment to ultimately appeal the ruling.

In addition, MetLife, the industry and the U.S. retailsegment are faced with regulatory overhang from the release of the Departmentof Labor's fiduciary standards final rule, Barnidge said. He expects a successful executionof the spinoff plan to reduce the regulatory overhang for the company. There isa possibility that a sale, IPO or spinoff takes a longer time to complete than expectedor is completed at a lower multiple than the expectations of investors, theanalyst said.

The analyst has a price target of $46 on the company'sstock. His EPS estimates are $5.70 for 2016 and $6.00 for 2017.