Lincoln Nat'l selling Dela. Investments for $428M

Shares of Lincoln National Corp. rose today after an Australian financial services firm agreed to buy Lincoln's asset-management unit, Delaware Investments, for $428 million in cash.

In another sign of tough economic times, Radnor-based Lincoln National, which markets itself as Lincoln Financial Group, agreed to sell Delaware Investments to Sydney-based Macquarie Group Ltd. in order to focus on its core insurance and retirement businesses.

Delaware Investments will remain based in Philadelphia.

Delaware president Patrick Coyne will continue to run the firm and oversee a staff of 583 at One Commerce Square in Center City, and in San Francisco and Boston.

Coyne will report to Ben Bruck, executive director of Macquarie Funds Group, who will move to Philadelphia.

"We believe the greatest opportunities for growth and differentiation for Lincoln Financial going forward are centered on our principal insurance and retirement businesses," said Dennis R. Glass, Lincoln Financial president and chief executive.

"This transaction will allow us to focus both management and capital resources on these core businesses."

Lincoln National shares rose 42 cents, or 1.83 percent, to $23.31 in midafternoon trading. Based on yesterday's closing price of $22.89, the share price has increased almost 45 percent since the firm announced in June that it would seek federal bailout money.

Macquarie said the acquisition, subject to regulatory approvals, is part of its strategy to expand its reach and develop global asset management operations.

Delaware Investment clients will continue to be served under the same investment processes, Macquarie said in a statement, but will have opportunities to invest in new Macquarie products.

Macquarie clients will be offered investment choices through Delaware investment managers.

As part of the deal, Delaware will continue to manage Lincoln Financial general account insurance assets under a long-term contract, and will provide additional sub-advisory services.

By the time the deal closes on Dec. 31, Lincoln Financial said, its distribution team for Delaware's funds and separately managed accounts will move from its wholesale distribution arm, Lincoln financial Distributors Inc., to Delaware Investments.

Founded in 1929, Delaware Investments has more than $125 billion assets under management and provides investment services to retail and institutional investors. The combined assets will be more than $300 billion, Macquarie.

To shore up capital due to investment declines in the recession, Lincoln Financial received $950 million in July in a federal bailout from the Troubled Asset Relief Program and has raised more than $2 billion since May.

Lincoln announced in June that it would sell its United Kingdom subsidiary, Lincoln UK, to Sun Life Financial Inc. of Toronto for $280 million to $300 million. That deal will close Sept. 30.

The company cut its February dividend to 21 cents, from 41.5 cents, and slashed its May dividend to 1 cent.

And in January, Lincoln said it was cutting 5 percent of staff, or about 540 jobs, after posting five straight declines in quarterly profit. This followed layoffs of an undisclosed number of employees nationwide in December from Lincoln Financial Distributors, the company's wholesale division that markets and sells variable and fixed annuities, life insurance, and investment-management products.

Proceeds from the sale of Delaware Investments will be used for general corporate purposes, including possibly repaying some of the federal bailout funds, Lincoln said.