ING U.S. Inc., the insurer that had an initial public offering this month, rose 5.4 percent in New York trading after BTIG LLC recommended investors buy the shares and said the company could be taken over.
The insurer, which will be renamed Voya Financial, advanced to $26.26 at 4:15 p.m.. BTIG analyst Mark Palmer set his price target at $31 for the New York-based company. The IPO price was $19.50 a share.
ING Groep sold 25 percent of its U.S. unit this month in an offering that raised about $1.27 billion as the Amsterdam-based parent divests assets as part of the conditions of its 2008 bailout from the Netherlands. The U.S. business, which is also an asset manager, still trades for less than half of book value, a measure of assets minus liabilities. That compares with more than 75 percent of book value at MetLife Inc. and Prudential Financial Inc., the biggest U.S. life insurers.
“We believe Voya is significantly undervalued, and that shares’ steep discount to book value is due in large part to erroneous perceptions of the business attributable to its hybrid nature,” Palmer wrote. “Voya is a legitimate takeover target insofar as its $6.5 billion market capitalization wouldn’t be particularly imposing for most of the firms that would potentially be interested in acquiring it.”
Life insurers may pursue more acquisitions worldwide to add business as capital builds while low bond yields and sluggish economic growth weigh on results, Deloitte Services LP said in January. Dana Ripley, a spokesman for ING U.S., declined to comment on the note.