Axa Equitable Holdings Inc, encompassing the US operations for French insurance giant Axa SA, fell almost US$1 billion short of its targeted share sale in what was still the biggest US initial public offering (IPO) of the year.
The company sold 137.25 million shares at US$20 each on Wednesday to raise US$2.75 billion, well short of the US$3.7 billion it was trying to raise at the high end of the US$24 to US$27 share price range marketed to investors.
The shares were set to begin trading yesterday on the New York Stock Exchange.
The listing, which gives Axa Equitable a market value of about US$11.2 billion, was the world’s second-largest this year.
It was surpassed only by Siemens Healthineers AG’s March IPO in Frankfurt, which raised 4.04 billion euros (US$4.8 billion), according Bloomberg data.
In the US, Pagseguro Digital Ltd sold US$2.6 billion in stock in January and iQiyi Inc (愛奇藝) sold US$2.4 billion in March
For Axa’s parent company, the deal provides a way to unlock capital. The proceeds from listing about 20 percent of Axa Equitable Holdings are to help the French insurer fund its biggest-ever acquisition: a US$15.3 billion takeover of XL Group Ltd.
The maneuver will help Axa shift toward property and casualty insurance while reducing its exposure to savings activities in the US.
Axa’s US business was the third-largest seller of variable annuities in the US last year, according to industry group Limra.
Those products require a lot of capital and can be volatile.
The company has a “relatively high level of market risk,” which could result in a discounted multiple compared with its peers, Bloomberg Intelligence analysts Jeffrey Flynn and Jonathan Adams said.
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