By Thomas K. Meakin
Travelers, welcome back!
Investors in insurance stocks have missed the opportunity to own and trade in shares of this venerable Connecticut Yankee, established in 1863, since Citigroup took it private two years ago.
For the record, Travelers made Marchs biggest insurance news. The company distributed 210 million shares via an Initial Public Offering at $18.50 a share. This worked out to be the biggest U.S. insurance IPO ever, with a value close to $4 billion. After Travelers, the second and third largest IPOs were Prudential Financial’s raising $3.5 billion last year, and MetLife’s gathering close to $3 billion the year before.
The huge offering was a solid success. The stock of Travelers Property Casualty Corp. was immediately listed on the NYSE. Citigroup plans to distribute most of the shares it still owns to its shareholders before year-end.
There are followers of insurance stocks who believe Citigroup CEO, Sandy Weill, must have hidden reasons for not only reducing his holdings in Travelers, but planning to eliminate them entirely.
That is possible. But I dont believe it. So. Ill go with the major published reasons for Citigroup to jettison Travelers.