ING Sells Additional Shares of U.S. Unit
ING Groep NV (INGA) said banks increased the share offering of its U.S. insurance unit by about $146 million (106 million euros) as the Dutch company winds down its ownership to comply with terms of a 2008 bailout.
Underwriters agreed to purchase an additional 4.95 million shares of ING U.S. Inc. at $29.50 each, according to a statement late yesterday from the New York-based business. ING Groep said Oct. 23 that it had sold 33 million shares at the same price. The transactions will reduce the Amsterdam-based company’s ownership to 57 percent and generate proceeds of $1.1 billion.
ING U.S., which will be renamed Voya Financial, has rallied 56 percent from its initial offering price in May, outpacing gains in the Standard & Poor’s 500 Life & Health Insurance Index. The business offers life insurance, savings products and annuities, and had about 13 million customers and 7,000 employees as of June 30, according to a regulatory filing.
“This is a turnaround story that will generally succeed as the company executes its improved strategy and pursues numerous operational improvements,” Keefe, Bruyette & Woods analysts wrote in a note to clients on Oct. 20. “However, we don’t see material upside to our current price target” of $34.
ING Groep agreed with European regulators to divest at least 25 percent of the U.S. unit by the end of 2013, more than half by the end of 2014 and the rest by the end of 2016. It has until the end of 2018 to complete the sale of its global insurance operations.
ING U.S. climbed 3 percent yesterday to $30.50 in New York. The KBW analysts said the prospect of additional share sales could limit gains in the stock.
To contact the reporter on this story: Noah Buhayar in New York at firstname.lastname@example.org.
To contact the editor responsible for this story: Dan Kraut at email@example.com