Citigroup Travelers IPO to Activate up to $4B

March 6, 2002

Travelers Property Casualty Corp., a subsidiary of Citigroup, Inc., is attempting to raise up to $4 billion in an initial public offering, possibly to become the largest U.S. insurance offering on record, according to Reuters.

Travelers will sell 210 million shares at $16-$19 per share, raising approximately $3.4 to $4 billion, which would beat the $3 billion raised by Prudential Financial in December, as reported by the Securities and Exchange Commission.

Citigroup is attempting to spin off Travelers in an effort to stabilize its earnings growth. They are looking to focus on cost-effective customer banking, Wall Street banking, and credit card businesses.

Citigroup announced in December that it would spin off Travelers, selling 20 percent to the public, and giving the remainder to shareholders. Travelers will have a total market value of about $17 billion to $20 billion, assuming the 210 million shares to be sold represent a 20 percent stake.

Travelers expects to use the net proceeds to pay debts to Citigroup.

The offering is scheduled to take place sometime at the end of the month. Additionally, Travelers is offering $850 million in senior notes due 2007 and purchase contracts to buy shares.

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