Falcone Insurer Said to Seek $1 Billion Valuation in IPO

Fidelity & Guaranty Life, the insurer controlled by Philip Falcone’s Harbinger Group Inc. (HRG), is seeking a valuation of at least $1 billion in its initial public offering, according to two people involved in the planning.

Fidelity & Guaranty may sell a 10 percent stake for $100 million, said one of the people, who asked for anonymity because plans for the offering are confidential. Proceeds will be used to pay cash to Harbinger and expand operations, according to a prospectus filed yesterday that outlined the stock sale.

The plans listed a sale amount of $100 million, which is typically a placeholder used to calculate registration fees, without saying how many shares would be offered or giving a price. Credit Suisse Group AG (CSGN) is leading the deal.

“FGL is worth over $1 billion,” Manal Mehta, whose Sunesis Capital LLC hedge fund owns Harbinger shares, wrote in an e-mail yesterday. “A public listing of FGL will make that division’s contribution of value to the holding company more apparent.”

Fidelity & Guaranty specializes in life insurance and retirement products with about 700,000 policy holders. For the 12 months ended Sept. 30, profit was $344.1 million on revenue of $1.22 billion. Total equity was $1.29 billion as of June 30.

Pamela Blum, a spokeswoman for Harbinger at Sard Verbinnen & Co., declined to comment, as did Jack Grone at Credit Suisse. New York-based Harbinger rose 1.2 percent to $9.19 at 4:06 p.m.

Falcone, 51, is focused on running Harbinger after the U.S. Securities and Exchange Commission barred him from the hedge-fund industry that made him a billionaire. Harbinger will retain a majority stake in Baltimore-based Fidelity & Guaranty after the offering, according to the filing.

To contact the reporter on this story: Zachary Tracer in New York at ztracer1@bloomberg.net

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net

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