NEW YORK -- Metropolitan Life Insurance Co., the nation's second-largest life insurer, plans an initial public offering of stock that could be the largest ever for an American company.
In papers filed Tuesday with the Securities and Exchange Commission, MetLife said it expects to raise more than $6 billion by selling 255 million shares -- a 31 percent stake -- at between $14 and $24 each.That would make it the largest domestic IPO ever.
Given the current healthy appetite for new stock -- especially shares sold by well-known companies with a proven ability to earn money -- MetLife's offering is expected to generate tremendous demand.
"MetLife has very good brand recognition, and it seems to be a very good time for an IPO because stock valuations are at record levels and the economic environment is nice," said Randall Roth, an analyst at Renaissance IPO Fund in Greenwich, Conn.
New York-based MetLife is one of a string of large insurance companies that has either completed or is planning an IPO. Others include the John Hancock Mutual Life Insurance Co., Mutual of New York and Prudential Insurance Co., the nation's largest life insurer.
One reason insurance companies are going public is to create a currency -- publicly traded stock -- that can be used for acquisitions in the wake of recent federal legislation that allows the companies to partner with banks and investment firms to offer numerous investment products insurers had previously been banned from selling.
Privately held mutual insurers are owned by their policy holders. Under the conversion process to a publicly traded company -- known as a demutualization -- existing policy holders receive shares of the new public company.
MetLife estimates that some 10 million of its policy holders will be eligible to receive stock under the conversion plan. After the 255 million shares, representing about 30 percent interest in the company, are sold to new stockholders through the IPO, MetLife's stock will be one of the most widely owned in the U.S.
A MetLife spokeswoman said the company expects to complete the IPO toward the end of March, pending a vote by policy holders and approval by the New York State Superintendent of Insurance.