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Life Health > Life Insurance

Principal Kicks Off IPO

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NU Online News Service, Oct. 23, 11:18 a.m. – Principal Financial Group Inc., Des Moines, Iowa, began executing its demutualization plan today by selling 100 million shares of stock to the public at a price of $18.50 each.

The stock is trading on the New York Stock Exchange under the symbol PFG.

The initial public offering period is scheduled to end Oct. 26. The IPO should raise about $1.8 billion and leave Principal with 700,000 shareholders, the company says.

The IPO will give Principal a “market capitalization value,” or total value for all outstanding stock, of about $6.7 billion.

The Goldman Sachs Group Inc., New York, is leading the underwriting team.

Principal has been doing business as a policyholder-owned mutual life insurer for 122 years.

The company notified the U.S. Securities and Exchange Commission in June that it intended to convert to a stock company charter, sell 109 million shares of stock to the public at a price of about $19 each, then use a combination of policy credits, 261 million additional shares of stock, and cash raised through the IPO to compensate policyholders for their loss of policy-based ownership rights.

Although Principal is raising somewhat less than it had originally estimated, analysts are saying the IPO has gone extremely well, given the weakening of the overall economy since June and the uncertainty caused by the Sept. 11 attacks.

At 11 a.m., Principal shares were selling for $20.80 apiece, 12.4% over the offering price.


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