Prudential’s IPO Hits $3 Billion

Prudential Financial Inc., the No. 2 U.S. life insurer, launched the largest initial public offering ever in the insurance business Wednesday, selling $3 billion in stock to investors.

Newark, N.J.-based Prudential sold 110 million shares, or about 19% of the company, to investors at $27.50 a share, said co-lead underwriter Goldman Sachs & Co. Investment bank Prudential Securities, a unit of Prudential Financial, was the IPO’s co-lead manager.

The final price tag was in line with the anticipated range of $25 to $30 a share.That gives Prudential a market capitalization of about $15.6 billion, based on about 566.3 million shares outstanding.

Prudential’s IPO comes at a time when relatively few companies are proceeding with first-time stock sales, although activity has picked up in recent weeks in tandem with the market’s rebound.

The IPO is the third-largest of the year after Kraft Foods Inc. and Lucent Technologies Inc.’s spinoff of Agere Systems Inc.

Prudential’s IPO is the final stage of the insurer’s shift from a policyholder-owned mutual company to a publicly traded firm.

It follows MetLife and John Hancock Financial Services Inc., which started the demutualization trend.

But Prudential, which postponed its IPO after the Sept. 11 attacks, may be a bit late to fully capitalize on that interest for insurance.

Prudential also became one of the country’s most widely held stocks, as it distributed stock to most of its 11 million policyholders as part of the demutualization.

Prudential’s stock will start trading today on the New York Stock Exchange under the symbol PRU.