MetLife, one of the nation's largest insurance providers, says it will go public sometime in 1999 as it converts from a policyholder-owned company to a publicly traded one.
The board of MetLife will formulate a 'demutualization' plan, which must then be submitted to the New York department of insurance. If approved, the company's 13 million policyholders would then receive shares in MetLife, which would move to raise money by selling additional stock to the public.
The company needs to convert to compete effectively in the market, said MetLife Chairman and Chief Executive Robert Benmosche. The stock will be used to pursue acquisitions and attract and retain talented management. "When the executives' compensation is tied directly to the performance of the company, that's important to the shareholders," Benmosche said in an interview with CNBC.
Other insurance companies that have announced plans to demutualize include John Hancock Mutual and Prudential.
In the past two years, many insurance companies have done quite well for shareholders, such as Hartford Life (HLI), which has nearly doubled since its May 1997 IPO, and MONY Group (MNY), up about 30 percent since going public in early November.
MetLife, with $351 billion in assets, provides insurance for about 37 million people.
In other IPO news:
- Online advertising agency Modem Media-Poppe Tyson announced it has filed with the Securities & Exchange Commission for an IPO headed by BancBoston Robertson Stephens. ModemMedia and Poppe Tyson, two units of ad giant True North Communications (TNO), merged in late May. True North, which rose 6.8 percent on the news, will retain majority ownership in Modem Media.
- In a sign that demand for IPOs may be spreading beyond Internet stocks, kitchenware retailer Rolling Pin Kitchen Emporium, fresh out of a Chapter 11 bankruptcy, has upped the expected price of its 1.5 million share offering to $6 to $7 a share from the $5-$6 range listed in the company's original IPO filing.
Dan Guilfoile, director of investment banking for lead underwriter Nutmeg Securities, said the deal is expected to price Wednesday or Thursday. Rolling Pin operates 19 company-owned stores and 21 franchised locations, mostly in the Midwest and Southeast.
Written By Darren Chervitz