Fortis Insurance N.V., the U.S. subsidiary of the Dutch-Belgian Fortis group, has achieved a clear success with the sale of its shares in Assurant. The initial public offering of some 80 million shares, which began last Thursday on the New York Stock Exchange, was enthusiastically received.
The shares, priced initially at $22, quickly rose more than 12 percent to trade in the $24-$25 range, and closed at $24.85 on Friday as one of the NYSE’s most actively traded stocks. Fortis stands to collect around $1.76 billion from the initial sale and a good deal more, as the underwriters announced they will exercise their full over-allotment options.
The additional sale of some 12,000,000 shares of common stock at the initial offering price will raise another $264 million bringing the total proceeds to just over $2 billion. Assurant, however, will not receive any direct benefit from the sale, as the proceeds will go to Fortis. The Group will retain an approximate 35 percent stake in Assurant and will keep two out of five members on the company’s board of directors.
Assurant offers consumer-protection and homeowner’s insurance; individual and group health insurance; group dental, disability and life insurance policies, as well as pre-funded funeral insurance. Following the stock sale, the company plans to raise around $1 billion through the issuance of debt securities, which have been rated “bbb” by A.M. Best.
For the nine months ending Sept. 30, 2003, Assurant reported net income of $263 million and revenue of $5.2 billion, compared with a net loss of $1 billion and revenue of $4.9 billion in the same period of 2002.
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