Kansas City Life Insurance Co. (KCLI)

[Enterprising Investor]

Kansas City Life shareholders approve plan to go private (12/15/15)

by Brian Kaberline

Kansas City Life Insurance Co. took a big step Tuesday in taking the company private.

Shareholders approved a reverse stock split that will convert every 250 shares of stock into 1 share. Holders of fewer than 250 shares will have their stock repurchased by the company.

The aim is to reduce the number of shareholders to fewer than 300, which will allow Kansas City Life to deregister its stock. More important, company officials said, going private will save the time and expense of filing reports with the Securities and Exchange Commission and complying with the Sarbanes-Oxley Act.

In SEC filings, the company estimated that it would save $850,000 a year by going private, not including executive and administrative time spent complying with requirements of publicly traded companies.

The company said in a release that it plans to make the reverse stock split effective 6 p.m. Wednesday. One minute later, the company will do a forward stock split, converting each share to 250 shares.

Kansas City Life then would have to file with the SEC to deregister its stock, which would take effect 90 days afterward.

Although going private will bring savings, Kansas City Life estimated in October that it would pay nearly $31 million to buy out smaller shareholders — at $52.50 a share for more than 573,000 shares — and cover the cost of the stock splits. The company will cover the costs with cash on hand.

Kansas City Life reported a profit of $5.4 million for the quarter that ended Sept. 30, down from $7.9 million for the same period in 2014.

http://www.bizjournals.com/kansascity/news/2015/12/15/kansas-city-life-shareholders-vote-to-go-private.html