My first take on the call.
*Arch is taking over the PMI infrastructure and operating platform. Specialized employees will go over to Arch
*The final price can change, it can go up or down based on the performance of the insurance portfolio over time (they said 2 years).
I need to re-listen to the call because it sounds like they are taking over PMI but still the price for the company can go up and down based on performance. Filings say that Arch is buying assets from PMI and PMAC stock. My first impression is that PMI is going to become a holding company with very limited operation, their books will be in run-off but they will have a some kind of a relationship with Arch. In the future we could get a positive cash flow from the old books, but based on this we will not be re-wring new businesses.
The big question is what happens to fee that will be paid for PMI operation over time based on the call? I think PMI will live and the fee will go to PMI over this 2 year period. PMI is though going to be in run-off. Maybe PMI will eventually merge with fully with Arch but we need some court filing regarding that. If this is over than I want to know how is getting the money, my calculation is that 50% of CMG stock and PMI operation platform is valued at 240 million but the final price can change based on CMG/PMI portfolio performance. Because that is the case I think PMI is not dead but still we need to hear what come out of the court hearings on March 15 and March 28 to get clearer pictures. Also PMI management team needs to speak out about this deal.
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